Are you looking to dive into the world of cryptocurrencies? Then, you might want to check out BRC-20 tokens. These experimental tokens on the Bitcoin blockchain have been gaining popularity lately, particularly with the rise of memecoins. But what exactly are they and how do they differ from ERC-20 tokens?
Created in March by a pseudonymous on-chain analyst called Domo, BRC-20 tokens allow fungible tokens to be issued and transferred on the Bitcoin blockchain, without the use of smart contracts. This sets them apart from ERC-20 tokens, which are built on the Ethereum blockchain and rely on smart contracts.
Despite being relatively new, the BRC-20 token market has seen explosive growth in recent months, with a market capitalization of $928.44 million and over 13,530 tokens in circulation. Some popular BRC-20 tokens include ordi, pepe, piza, meme, and moon.
What are Ordinals?
So, you know how Ethereum is famous for supporting NFTs? Well, Bitcoin is a bit more old-fashioned and hasn't really supported any crypto assets other than Bitcoin itself. Some people like it that way, but others think it's holding Bitcoin back. That's where Ordinals come in!
This little protocol uses satoshis, which are basically like teeny tiny fractions of a Bitcoin. There are a hundred million of them in each BTC coin, so they're pretty small. Basically, the Ordinals protocol lets you scribble some extra data onto a satoshi before it gets added to a transaction. And once it's got that extra data, it becomes an Ordinal!
Now, the really cool thing about Ordinals is that they're non-fungible. That means each one is unique and can't be swapped out for another one. BRC-20 tokens, on the other hand, are totally interchangeable.
But that's why BRC-20 tokens are so useful! With this standard, you can create and mint your very own Bitcoin-based tokens using the Ordinals protocol. It's kind of like how Ethereum users can make their own tokens using the ERC-20 standard. Pretty nifty, huh?
BRC-20.io says that the BRC-20 market has been going wild lately, with over three million dollars worth of trading going on in just one day. And get this: there are already more than 8,000 BRC-20 tokens that have been minted. That's a lot of crypto enthusiasts getting in on the action!
Why BRC-20 is in the news?
So why are these tokens so hot right now? Well, some folks think it's all thanks to Pepe Coin (PEPE). This BRC-20 token is based on the Pepe the Frog meme, which is pretty popular on the internet. And get this: at the time of writing, Pepe Coin had a 24-hour trading volume of over half a million bucks. Not too shabby for a memecoin, huh?
BRC-20 vs ERC20
Okay, let's talk about the difference between BRC-20 and ERC-20 tokens.
First off, BRC-20 and ERC-20 exist on totally different blockchains. BRC-20 is all about Bitcoin, while ERC-20 is all about Ethereum. And because they're on different blockchains, they use different ways of verifying transactions.
For example, Ethereum uses proof of stake, which means that validators stake some ETH to secure the network. But Bitcoin uses proof of work, which means that miners solve complex computational problems to verify transactions.
Another big difference is that ERC-20 tokens use smart contracts to execute transactions, while BRC-20 tokens use inscriptions within the Ordinals protocol. Basically, smart contracts are like little programs that can trigger transactions automatically if certain conditions are met. But with BRC-20 tokens, the inscriptions within the Ordinals protocol are what make everything happen.
It's worth noting that if you want to get in on the BRC-20 action, you'll need your own Bitcoin wallet to mint or trade the tokens. And right now, ERC-20 tokens might be the better bet for some folks, especially if you're really into smart contracts. But hey, different strokes for different folks, right?
The rise of BRC-20 tokens has also impacted the Bitcoin ecosystem, with BRC-20 transactions outperforming Bitcoin transactions and generating additional revenue for miners through increased transaction fees.
If you're interested in minting and trading BRC-20 tokens, you'll need a Bitcoin wallet compatible with the BRC-20 standard. And while the future outlook for BRC-20 tokens is uncertain, the recent growth in market capitalization and transaction volume suggests strong interest in the memecoin sector.
So, are BRC-20 tokens the next big thing in the crypto world? Only time will tell. But for now, they are definitely worth keeping an eye on.