With the growing popularity of fungible tokens in the cryptocurrency space, BRC-20 tokens have become a game-changer for Bitcoin users. They expand the possibilities of the Bitcoin blockchain beyond its role as a digital currency, enabling tokenization and the creation of digital assets.
The Bitcoin community has and continues to debate as to whether Bitcoin should support more sophisticated functionality beyond being 'digital gold'. This debate was sparked by the introduction of ordinal NFTs, which led to the experimentation of using the Bitcoin network as a way to store immutable data. Ordinals enable the inscribing of data into individual satoshis on the Bitcoin blockchain, using an ordering system called ordinal theory. BRC-20 tokens leverage ordinal inscriptions to create semi-fungible tokens by embedding specific types of text into satoshis.
BRC-20 is an experimental token standard that utilizes ordinal inscriptions. It was launched by an anonymous developer named Domo on March 9, 2023. Unlike popular token standards on EVM blockchains, BRC-20 does not rely on smart contracts. Instead, it allows users to store a script file on Bitcoin, associating tokens with specific satoshis. BRC-20 tokens can be deployed, minted, and transferred by embedding JSON data into ordinal inscriptions.