Overview of the BRC-20 Token Standard
BRC-20 is an experimental standard for issuing fungible tokens on the Bitcoin blockchain.Created by the anonymous developer Domo on March 9, 2023, its core mechanism utilizes the Ordinals protocol to inscribe JSON-formatted data onto the smallest unit of the Bitcoin—the satoshi—thereby enabling token deployment, minting, and transfer.
Key Advantages of BRC-20
- High Security: BRC-20 tokens are directly built on the Bitcoin blockchain and inherit its inherent robust security features, including decentralization, strong algorithmic encryption, and the Proof-of-Work (PoW) consensus mechanism, thereby providing a high level of protection against hacking and fraud.
- Simplified Token Creation: Compared to token standards on other blockchains that require complex smart contracts, BRC-20 streamlines the tokenization process. Users can create and transfer tokens relatively easily without in-depth programming knowledge.
- Native Bitcoin Integration: BRC-20 tokens work seamlessly with the underlying blockchain of Bitcoin, effectively expanding the functionality of the Bitcoin network and enabling it to support a wider variety of assets.
- Decentralized Design: By fully leveraging the decentralized nature of the Bitcoin network, transparency and security in token operations are ensured, while the risk of a single point of failure is avoided.
- Fungibility: BRC-20 tokens are fungible, meaning each token unit has the same attributes and value, making them interchangeable and suitable for scenarios such as payments and trading.
- No Smart Contract Risks: Unlike standards such as Ethereum ERC-20 that rely on smart contracts, BRC-20 does not use smart contracts to execute token logic, thereby avoiding potential code vulnerabilities and security risks associated with smart contracts.
- Developers Cannot Reserve Tokens: Once the tokens are deployed, all tokens are available for users to mint according to the rules; developers cannot reserve large quantities of tokens as in traditional Initial Coin Offerings (ICOs), making the process theoretically more equitable.
How to Use BRC-20 Tokens
Understanding How It Works
BRC-20 tokens operate via the Ordinals protocol, which allows JSON data defining the token name, total supply, minting limits, and other information to be inscribed onto the smallest unit of Bitcoin—the satoshi. These inscriptions are immutable and permanently stored on the Bitcoin blockchain.
Choosing a Compatible Wallet
To manage BRC-20 tokens, you need a wallet that specifically supports the Ordinals protocol and BRC-20 tokens.Common options include UniSat Wallet or the OKX Web3 Wallet. When creating or importing a wallet, be sure to select a Taproot address—typically starting with “bc1p”—as only this address type supports Ordinals inscriptions and BRC-20 tokens.
Main Process
- Deployment: Users use a compatible wallet (such as UniSat) to inscribe a JSON data string that defines the name, total supply, and minting limit per transaction for the new BRC-20 token. This is the first step in creating a new BRC-20 token.
- Mint: Other users can mint (or “claim”) tokens by engraving a minting instruction according to the rules set during deployment. This process requires paying transaction fees (gas fees) on the Bitcoin network; the amount depends on network congestion.
- Transfer: Transferring BRC-20 tokens requires two steps: First, create a transfer instruction in a compatible wallet, specifying the number of tokens to be transferred; then, send the amount of satoshis containing that transfer instruction to the destination address. This incurs two Bitcoin network transaction fees.
Trading BRC-20 Tokens
BRC-20 tokens can be bought and sold on specific trading platforms or marketplaces. For example, both the UniSat Marketplace and the Ordinals market in the OKX Web3 wallet provide access to trading BRC-20 tokens.
- Buying: Select the BRC-20 inscription you wish to purchase on the marketplace. After confirming the price and quantity, you can buy it directly.
- Selling: Before selling BRC-20 tokens, you must first generate a “transfer inscription” specifying the quantity of tokens to be sold. Once this inscription is confirmed on-chain, you can list the tokens for sale on the marketplace. BRC-20 tokens are typically bought and sold in batches.
Current Status and Outlook for BRC-20
Since its launch in March 2023, the BRC-20 standard has attracted widespread attention from the crypto community. Although it remains in the experimental stage, its innovation has opened up new possibilities for the Bitcoin ecosystem.For example, as of April 2025, the market capitalization of ORDI, the first BRC-20 token, reached approximately $164 million. However, please note that these figures are subject to change over time and are provided for reference only; the latest situation may have changed.
The future development and use cases of BRC-20 remain a subject of debate within the Bitcoin community. Some view it as a significant innovation that expands the functionality of Bitcoin, while others worry that it may place unnecessary strain on the network, leading to congestion and higher transaction costs.Additionally, BRC-20’s lack of programmability and the fact that transactions may consume significant block space present challenges.
Key Stakeholders
- Domo (@domodata): Creator of the BRC-20 token standard.
- UniSat Wallet: A popular BRC-20 wallet and trading marketplace that offers features such as deployment, minting, and trading.
- OKX Web3 Wallet: Supports viewing, sending, and trading BRC-20 assets.
