Original | Odaily Planet Daily

Editor | 0xAyA

With the rise in coin prices, the Bitcoin ecosystem has recently experienced a major outbreak, and various derivative protocol ecosystems have also heated up. Among them, Ordinals Ordinals Ordinals is a numbering scheme for satoshis, allowing the tracking and transmission of individual sats. These numbers are called Ordinals. Satoshis are numbered in the order they are mined and transferred from transaction inputs to transaction outputs, first in, first out. Both the numbering scheme and the transfer scheme depend on order, with the numbering scheme depending on the order of mining and the transfer scheme depending on the order of transaction inputs and outputs. More attention is paid to protocols and their BRC20 token standards.

However, the influx of a large amount of hot money has also gradually reduced the expected profit space for Ordinals. For players eager to obtain alpha returns (excess returns), the risk-reward ratio is also gradually deteriorating. Within the Bitcoin derivative ecosystem, are there more worthwhile tracks to bet on? This article will briefly introduce the "more authentic" Atomicals protocol and its ARC-20.

Introduction

The ARC-20 token standard is provided by the Atomicals protocol, based on BTC's UTXO for minting and transfer. Its basic unit "atom" is composed of the smallest unit of Bitcoin, sat, which means that each unit of ARC-20 token is always backed by 1 sat, i.e. 1 Token = 1 sat. At the same time, ARC-20 is also the first token protocol to be minted through POW, which means that participants can mine inscriptions/NFTs directly, just like mining Bitcoin in the past.

1 Token = 1 sat has many benefits. First of all, by definition, the value of each token will never be less than 1 sat, equivalent to sat serving as a "digital gold anchor" supporting the token's value; furthermore, when verifying transactions, it only requires querying the UTXO corresponding to sat itself; moreover, unlike BRC 20, which requires recording ledger states off-chain and requires two-step transactions through a third-party sorter, all operations of ARC-20 can be completed using the BTC network without the need for additional steps; finally, thanks to the composability of UTXO, in theory, the direct swap between ARC-20 tokens and BTC is achievable, and this underlying design advantage will enable ARC-20 to have better liquidity after related tools emerge in the future.

The Atomicals protocol also provides a prefix parameter setting for Bitwork Mining for ARC-20, where the issuer of the token can choose a special prefix, and users who want to mint the token must calculate the matching prefix through CPU mining to qualify for minting this ARC-20 token. Here, the subject participating in minting has actually changed from a wallet to a CPU, a concept that coincides with the "one CPU, one vote" philosophy of Bitcoin OGs.

ARC-20 faithfully adheres to the "Not your keys, not your coins" principle advocated by Bitcoin OGs, and is closer to BTC fundamentalism in both principle and actual participation. It can be said that ARC-20 tokens are Bitcoin itself.

Differences from other protocols

Due to its underlying design characteristics, ARC-20 tokens have significant differences from other protocol tokens, as can be seen in the table below:

From the table, it can be seen that the ARC-20 token standard, benefiting from the UTXO binding design of the Atomicals protocol, cleverly avoids the complexity faced by the BRC-20 standard (such as double sorting, adding useless transactions, etc.), and is more in line with the native characteristics of Bitcoin as a whole, also leaving space for possible NFT/domain extensions in the future. More importantly, ARC-20 is more likely to receive support from the core community than the Ordinals ecosystem due to its overall adherence to the philosophy of Bitcoin OGs.

Ecosystem

Due to the current imperfect construction of tools and protocols, there are few tokens issued based on ARC-20, with most of the funds concentrated on the first token, ATOM. Specific token data can be found here.

Currently, there are two markets that support ARC-20 token trading, namely SatsX @SatsXio and Atomicals Market @atomicalsmarket.

Due to the characteristics of ARC-20, tokens purchased may be treated as ordinary sats and consumed as fees, so be sure to create a separate wallet to receive assets related to the Atomicals protocol, which can be done using Atom Wallet or Wizz Wallet.

Conclusion

With the vigorous development of the Bitcoin ecosystem, more opportunities are emerging.

Compared to the bustling Ordinals ecosystem, the more authentic Atomicals protocol and its ARC-20, which are more in line with Bitcoin fundamentalism, have huge untapped potential, and may provide investors with more choices and opportunities.

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