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What are BRC-20 Tokens?

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What are BRC-20 Tokens?

Video by Crypto Tips via YouTube

What are BRC-20 Tokens?

BRC-20 tokens are fungible digital assets created on the Bitcoin blockchain. These tokens are unique because they are inscribed directly onto Bitcoin’s satoshis using JSON code, making them distinct from traditional tokens on platforms like Ethereum. The BRC-20 standard offers a new way to utilize Bitcoin, allowing for the creation and transfer of tokens within the Bitcoin ecosystem​​​​​​.

To generate BRC-20 tokens, a person needs to start by crafting a script file that holds vital information about the token. This info includes details like the token’s name, symbol, and total supply. After that, they need to put the necessary amount of Bitcoin into a special address on the bitcoin blockchain, which goes by the name “ordinals registry.”

Origin and Development of BRC-20 Tokens
The BRC-20 token standard was created in early March 2023 by Domo, an enigmatic blockchain analyst. Nevertheless, the genesis of BRC-20 tokens can be traced back to Bitcoin’s Taproot upgrade in November 2021, which increased the data capacity within Bitcoin blocks. This upgrade paved the way for the development of the Bitcoin Ordinals protocol, which enabled the inscription of information onto individual satoshis.

Utilizing this protocol, BRC-20 tokens are inscribed with JSON data, providing additional functionalities like token deployment, minting, and transfer on the Bitcoin network​​​​. The standard supports the creation and transfer of fungible tokens via the ordinals protocol. Ordi, Vmpx and Pepe are examples of popular tokens on the BRC-20 token list.

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