Step into the world of BRC-20 tokens, where the fusion of Ethereum’s renowned ERC-20 token standard with the Bitcoin blockchain is causing ripples in the realm of cryptocurrencies. This article is your comprehensive guide to BRC-20 tokens, offering a deep dive into their functionality, operational principles, and their wide range of applications. Not only will we explore the nuances that set BRC-20 tokens apart from ERC-20 tokens, but we’ll also present you with an exclusive list of the top 5 BRC-20 tokens to keep an eye on. Get ready to immerse yourself in the captivating universe of BRC-20 tokens and unlock a world of possibilities!
What is a BRC-20 Token?
BRC-20 Token is a token standard proposed in Bitcoin Request for Comment 20 (BRC-20) by an anonymous developer named Domo in March 2023. It is designed as an emulation of Ethereum’s popular ERC-20 token standard. While ERC-20 tokens operate on the Ethereum blockchain, BRC-20 tokens aim to bring similar functionality to the Bitcoin blockchain.
How does BRC-20 Token work?
The development of BRC-20 tokens became possible with the introduction of the Bitcoin Taproot upgrade in 2021. This upgrade expanded the capabilities of the Bitcoin blockchain, allowing for the attachment of additional data through the ordinal protocol. By leveraging this functionality, BRC-20 tokens can be deployed, minted, and transferred on the Bitcoin network.
What are the use cases of BRC-20 Tokens?
Here are 7 use cases of BRC-20 Tokens:
- Peer-to-Peer Transfers: Similar to Bitcoin, BRC-20 tokens enable users to engage in direct transactions between wallets on the network. Transactions on the BRC-20 blockchain incur Bitcoin transaction fees.
- Tokenization: Through further advancements, BRC-20 tokens can be utilized to create crypto assets that represent other commodities such as fiat currency, gold, and more. Users can define token characteristics and properties using JSON code, including supply, minting, and issuance mechanisms.
- Decentralized Finance (DeFi): Bitcoin’s simple and inflexible design has limited the growth of decentralized protocols and applications on its network. BRC-20 tokens present an exciting opportunity to foster expansion and liquidity on the Bitcoin blockchain. These tokens can be integrated with DeFi exchanges, yield farming protocols, and GameFi by incorporating additional features.
- Cross-Chain Interoperability: BRC-20 tokens can facilitate cross-chain interoperability, allowing them to be seamlessly transferred and utilized on other blockchain networks. This opens up possibilities for integrating BRC-20 tokens with different decentralized applications (DApps) and protocols across various blockchain ecosystems.
- Decentralized Exchanges (DEXs): BRC-20 tokens can be listed and traded on decentralized exchanges, providing users with the ability to engage in trustless and secure peer-to-peer trading. This enables efficient and transparent token swaps without relying on traditional centralized intermediaries.
- Tokenized Assets and Securities: BRC-20 tokens can represent ownership or shares in real-world assets, such as real estate properties, company stocks, or investment funds. By tokenizing these assets, BRC-20 tokens make it easier to fractionalize ownership, enhance liquidity, and enable efficient transfer and trading of traditionally illiquid assets.
- Governance and Voting: BRC-20 tokens can serve as a means for decentralized governance and voting within blockchain-based systems. Token holders can participate in decision-making processes, propose and vote on protocol upgrades or changes, and shape the future direction of the ecosystem through a transparent and democratic governance framework.
What is the difference between BRC-20 Token and ERC-20 Token?
BRC-20 tokens and ERC-20 tokens are both types of digital tokens, but they operate on different blockchain networks and have distinct characteristics. Here are the key differences between BRC-20 tokens and ERC-20 tokens:
- Network: BRC-20 tokens operate on the Bitcoin blockchain, whereas ERC-20 tokens operate on the Ethereum blockchain. The choice of network impacts the underlying infrastructure and features available to the tokens.
- Token Standard: BRC-20 tokens follow the BRC-20 experimental standard, which may imply that they are still undergoing testing or development. On the other hand, ERC-20 tokens adhere to the well-established ERC-20 token standard, which has been widely adopted in the Ethereum ecosystem.
- Creation Method: BRC-20 tokens are created through ordinal inscriptions, a process that may involve custom development and implementation. ERC-20 tokens, on the other hand, are created through smart contracts, which are self-executing agreements running on the Ethereum blockchain.
- Consensus Mechanism: BRC-20 tokens are built on the Bitcoin blockchain, which utilizes the Proof of Work (PoW) consensus mechanism. In contrast, ERC-20 tokens reside on the Ethereum blockchain, which is transitioning from Proof of Work (PoW) to Proof of Stake (PoS). This means that the consensus mechanism securing BRC-20 tokens involves mining, while ERC-20 tokens rely on staking.
- Working: BRC-20 tokens operate in parallel to the Bitcoin network, leveraging the existing Bitcoin infrastructure. ERC-20 tokens, on the other hand, work in resonance with the Ethereum network, taking advantage of its features and capabilities.
- Gas Fees: BRC-20 tokens generally have lower gas fees compared to ERC-20 tokens. Gas fees are the transaction fees required to execute operations on the respective blockchain networks. The Ethereum network, where ERC-20 tokens reside, is known for higher gas fees due to network congestion and demand.
- Block Verification Speed: BRC-20 tokens have a block verification speed of approximately 10 minutes, which is the average block time on the Bitcoin blockchain. ERC-20 tokens, operating on the Ethereum blockchain, have a faster block verification speed of around 15 seconds.
Top 5 BRC-20 Tokens
Here are top 5 BRC-20 tokens:
- ORDI: ORDI is a BRC-20 token that has gained significant attention in the amusement and meme coin space. Currently priced at $10.20, ORDI boasts a market cap of $214.05 million. With a circulating supply of 21 million tokens, it has reached its maximum supply as well. ORDI has experienced considerable volatility, as evidenced by its 7-day change of -39.6%. In the last 24 hours, the token has seen a trading volume of $75.35 million, indicating active trading and investor interest.
- VMPX: VMPX is another BRC-20 token known for its amusement and meme coin nature. Its current price is $0.085, and it holds a market cap of $9.40 million. The circulating supply stands at 108.62 million tokens, matching its maximum supply. VMPX has encountered a significant decrease in value over the past week, with a change of -53%. Despite its comparatively lower price, the token has still managed to generate a trading volume of $4.21 million in the last 24 hours.
- PEPE: PEPE is a BRC-20 token that has gained popularity within the amusement and meme coin community. It is currently priced at $0.13, with a market cap of $5.91 million. The circulating supply of PEPE stands at 42.07 million tokens, the same as its maximum supply. However, PEPE has experienced a substantial decline in value, with a 7-day change of -63.4%. The trading volume in the last 24 hours amounts to $593,675, suggesting moderate activity within the market.
- PIZA: PIZA is a BRC-20 token that falls under the category of amusement and meme coins. Priced at $0.19, PIZA has a market cap of $4.17 million. The circulating supply and maximum supply of PIZA are both 21 million tokens. Similar to other tokens in this list, PIZA has faced a notable decline in value over the past week, with a 7-day change of -44%. In the last 24 hours, the trading volume has reached $4.64 million, indicating a fair amount of trading activity.
- MEME: MEME is a prominent BRC-20 token known for its amusement and meme coin characteristics. Priced at $58.37, MEME has the highest market cap among the top 5 tokens, standing at $5.43 million. With a circulating supply of 99,999 tokens, it has reached its maximum supply. MEME has also experienced a significant drop in value over the past week, with a 7-day change of -50.4%. However, despite its relatively high price, it has managed to generate a trading volume of $1.10 million in the last 24 hours.
How to buy BRC-20 tokens?
There are two ways to trade BRC-20 tokens:
1. Listed Exchanges
BRC-20 tokens can be bought or sold through centralized exchanges where they are listed. These exchanges, such as Binance, OKX, Deepcoin, Bitrue, and CoinW, facilitate the trading of BRC-20 tokens. After purchasing the tokens, you can store them in compatible wallets supported by these exchanges.
2. Ordinal Exchange
To trade on the ordinal exchange, you will need an ordinal wallet. Follow these steps to get started:
Step 1: Visit ordinalswallet.com and create an ordinal wallet. It is important to securely back up your secret phrase during the wallet creation process.
Step 2: Once your wallet is set up, navigate to the BRC-20 section on the platform. This will provide you with a comprehensive list of all the BRC-20 tokens available for trading.
Step 3: Select the specific token you want to buy from the provided list. This will display the tokens available for sale. Simply click on the “Buy Now” option to proceed with the purchase of the desired token.
By following these steps, you can engage in trading BRC-20 tokens either through established exchanges or the ordinal exchange with the use of an ordinal wallet.
In conclusion, BRC-20 tokens present a significant development in the realm of digital tokens, bridging the functionalities of ERC-20 tokens with the Bitcoin blockchain. With their use cases ranging from peer-to-peer transfers to decentralized finance and tokenized assets, BRC-20 tokens offer exciting possibilities for innovation and expansion. Whether you choose to trade them on listed exchanges or explore the ordinal exchange, BRC-20 tokens are an intriguing avenue for those interested in leveraging the potential of blockchain technology within the Bitcoin ecosystem.
What is the main difference between BRC-20 tokens and ERC-20 tokens?
BRC-20 tokens operate on the Bitcoin blockchain, while ERC-20 tokens operate on the Ethereum blockchain. This difference impacts the underlying infrastructure, features available, and the consensus mechanisms used by these tokens.
Can BRC-20 tokens be used for decentralized finance (DeFi) purposes?
Yes, BRC-20 tokens can be integrated into DeFi protocols, such as exchanges and yield farming platforms, similar to ERC-20 tokens. They offer opportunities for liquidity provision, yield generation, and participation in various DeFi applications within the Bitcoin ecosystem.
How can I purchase BRC-20 tokens?
You can buy BRC-20 tokens either through listed exchanges, where they are traded, or by using an ordinal wallet to participate in the ordinal exchange. Listed exchanges like Binance, OKX, and CoinW offer trading options, while the ordinal exchange requires an ordinal wallet for direct trading.
Are BRC-20 tokens compatible with other blockchain networks?
BRC-20 tokens can facilitate cross-chain interoperability, enabling seamless transfers and utilization on other blockchain networks. This allows integration with different DApps and protocols across various blockchain ecosystems, expanding the potential reach and functionality of BRC-20 tokens.