Brc 20
BRC-20, or Bitcoin Request for Comment 20, is a token standard modeled after the Ethereum protocol’s ERC-20 (Ethereum Request for Comment 20). It was introduced in March 2023 by an anonymous developer known as Domo. BRC-20 tokens are essentially Bitcoin’s version of ERC-20 tokens, with some key differences.
Here’s how BRC-20 works and why it’s controversial:
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Similar to ERC-20: Just like ERC-20 tokens on Ethereum, BRC-20 tokens allow developers to create tokens that are compatible with the broader Bitcoin network. These tokens can represent a wide range of transferable assets, rights, or even other cryptocurrencies.
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Ordinals Inscriptions: BRC-20 tokens are made possible due to Bitcoin’s November 2021 Taproot upgrade, which introduced ordinal inscriptions. These inscriptions assign a serial number to a satoshi, the smallest unit of Bitcoin. The serial number, along with other data, is included in a part of a Bitcoin transaction called the witness signature field.
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Controversy: BRC-20 tokens have sparked controversy because they diverge from Bitcoin’s original purpose as a simple digital currency. Some argue that introducing tokens on the Bitcoin blockchain dilutes its core value proposition. Additionally, there’s concern about potential security risks and regulatory implications.
In summary, BRC-20 tokens are an experiment in minting and transferring fungible tokens on the Bitcoin blockchain. While they offer new possibilities, they also raise questions about the fundamental nature of Bitcoin itself¹²³. 🌟