What is BRC20

In order to make it easier for more people to understand BRC20 and facilitate a deeper understanding of this field, let's explore BRC20 in the most popular way and lead everyone into this exciting track.

In the field of blockchain, we usually issue tokens through the Ethereum network's smart contracts to issue ERC20 tokens. However, in the Bitcoin network, there are no smart contracts, and tokens can only be issued through other means. Therefore, @domo (the inventor of BRC20) invented a protocol that can issue tokens on the Bitcoin network, called BRC20:

1 Bitcoin = 100 million satoshis (the smallest unit of Bitcoin, 1 satoshi, composed of 100 million satoshis to make 1 Bitcoin). Tokens can be issued through the BRC20 protocol with 1 satoshi issuing one or more tokens, NFTs, domain names. Below, I will use simple examples and language to explain its principles.

Every time we transfer on the Bitcoin or other blockchain networks, we can also fill in a memo in addition to the transfer amount.

The issuance of BRC20 tokens follows a similar principle, determining the total amount of BRC20 tokens to be issued, deployment, minting, transfer, and entering the required information in the memo box of each satoshi when using the BRC20 protocol, as a label.

For example, if we set the token name as AA, the total quantity of tokens as 1000, and the issuance method as deployment. When a user mints AA tokens and writes in the memo box: AA tokens, total issuance of 1000, issued by deployment. After the minting is completed, the user obtains the BRC20 tokens for AA, also known as an inscription. The identifying information of these BRC20 tokens can only be distinguished through an indexer, and protocols that support BRC20 will come with their own indexers.

The Future of BRC20

The infrastructure's new upgrade not only improves the performance of the BRC20 protocol but also introduces more practical use cases and functions, gradually moving away from the impression of being just a speculative tool. Developers are actively exploring new projects built on the BRC20, and industry leader Unisat has already launched the AMM DEX of the BRC20 protocol, seemingly seeing the early form of Ethereum DEFI.

Currently, apart from wallet applications, indexers, and the DEX infrastructure built by Unisat, there are no other practical applications. BRC20 tokens that rely on emotional speculative fervor still dominate the market, which is also considered to be reminiscent of the early Ethereum ICO frenzy.

ORDI #SATS #RATS Welcome to add more information.

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