It has been a crazy week as so many things were weighing heavy on the minds of the market and insane volatility in the crypto market.
The banking crisis started with First Republic Bank falling to pieces. Then, the most aggressive rate hike cycle. And we all know what will happen next, recession.
But Bitcoin doesn’t skip a beat. In fact, it is putting a new ATH (All Time High) regardless.
The thing is it hit the new ATH at the time First Republic Bank collapsed.
It all goes down to one thing, Ordinals.
If you’re not familiar with Bitcoin Ordinals, let’s rewind for a moment.
What are Ordinals?
Ordinals refer to the scheme of numbers associated with the Satoshis – the individual unit that makes up Bitcoin.
These numbers are categorized into two use cases:
- the numbering scheme relies on the order in which individual sats are mined
- the transfer scheme relies on the order of transaction inputs and outputs
Ordinals store images, texts, SCG, or HTML on-chain, and they can be stored, purchased, and gifted. The information added to the Bitcoin blockchain using ordinals must adhere to a 4MB limit.
In blockchain, they are actual files of the whitepaper, and videos, which are permanent and must be downloaded by all full nodes.
What are Ordinals Protocol?
The protocol allows users to connect that ‘satoshi’ to a digital file and transmit it to the Bitcoin blockchain.
In other words, ordinals are means of creating Bitcoin NFTs by attaching data such as images, videos, etc. to an individual satoshi on the Bitcoin blockchain.
Ordinals Protocol consists of 2 concepts:
- Ordinals
- Inscriptions
Ordinals
Ordinals are based on the ordinal theory, which is a way of numbering a sequence of things.
Since ordinals use existing infrastructure available on Bitcoin, it doesn’t necessarily require a token or a blockchain.
The file might be then hosted on a cloud service of the minting tool like Opensea. And in the NFT implementation on various blockchains, the file and the NFT live in separate environments.
Inscriptions
The process of adding assets to individual satoshis is called inscription. Once the NFTs are complete minting, the inscription is stored in the Bitcoin transaction’s signature.
By inscribing satoshis with arbitrary content, inscriptions can create unique digital artifacts that are native to the Bitcoin ecosystem.
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What are the differences between Ordinals and NFTs?
Now to be simple, Bitcoin Ordinals are like NFTs on the Bitcoin chain. But it’s more like storing an NFT or data on each satoshi.
Regardless of where the ordinals file is stored, the reference to that file’s path can be added in the NFT.
However, if the file is corrupted, the NFt would no longer reference the file.
When Ordinals and Inscriptions are saved on the Bitcoin base chain, it will generate a token called BRC-20.
What are BRC-20 Tokens?
BRC-20 is a token standard referring to experimental fungible tokens created using Ordinals and inscriptions on Bitcoin.
To deploy token contracts, mint, and transfer tokens, it utilizes Ordinals inscription of the JSON data.
It’s not the token standard that you’ve used with EVM chains, which creates smart contracts that manage the tokens.
Simply, it is a way to store a script file in Bitcoin.
What is BRC-20 originated from?
BRC-20 was created by a Twitter user @domodata on March 8th, 2023.
The name originated from Ethereum’s ERC-20 token standard, but it doesn’t interact with smart contracts like the EVM standard.
Even though the creator has emphasized that it’s just an experiment, speculators may see it differently
https://twitter.com/domodata/status/1633828036943704068?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1633828036943704068%7Ctwgr%5E5862952fdab2e6dbe9c054a859c92b7a3ee37ce1%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fthebitcoinmanual.com%2Farticles%2Fbrc-20-tokens%2F
The Term “BRC-20” can be confusing
While this may drive demand for Bitcoin to pay fees and Bitcoin Ordinals reached an ATH surge according to the analytics data, the term can be confusing, making unsuspecting investors purchase useless metadata.
The creator noted that:
“These will be worthless. Please don’t waste money mass minting”
In addition, the name itself may raise some confusion. There’s another forked smart contract token called Bitgert BRC-20. Bitgert has $BRISE as the native token, and any tokens built on this chain are referred to as BRC-20 tokens.
But in the end, it doesn’t really matter.
What are some possibilities of BRC-20?
These days we’ve seen BRC-20 tokens or any coins built on the Bitcoin blockchain gaining huge momentum.
Within just 2 months of launch, they have reached hundreds of millions in the market cap. Ordinal marketplaces have seen a big volume, with a great number of traders and users.
The most popular are ORDI, PEPE, PIZA, MEME, MOON, PUNK, DOMO, OSHI, XING, and SHIB.
The BRC-20 market has grown rapidly.
A potential use case of BRC-20 is decentralized finance (DeFi), where BRC-20 tokens could play a key role.
ORDI – a freshly launched BRC-20 token – was recently listed on Bitget.
It is among the top innovative cryptocurrencies, offering users with unique investment experience.
The popular exchange Bitget decided to list ORDI to test its potential and growing popularity within the crypto community.
What can we do with BRC-20 Tokens?
Create a BRC-20 Wallet
- Download and create a wallet https://ordinalswallet.com/
- Click on your wallet profile
- Click ‘Receive’
- Copy the wallet address
- Go to any supported exchanges and withdraw some BTC to this address (Binance, Bybit, etc.)
You can choose to create Xverse wallet or Unisat wallet.
Buy BRC-20 Tokens
- On your wallet browser, click on the ‘BRC-20‘ tab, and choose any tokens from the list
- Now check the number of tokens, per token price
- Click on ‘Buy Now‘
- Confirm password
- Click on ‘Buy Now‘ and confirm the transaction
Free Mint BRC-20 Tokens
- Go to the BRC-20 list and look for the progress bar under the supply of each token. (If the progress bar is not 100%, then you can mint that token)
- Click on token>> check details >> Mint
- Set fees >> Inscribe
- Confirm the transaction
Inscribe your Own BRC-20 Tokens
- Go to the “Inscribe” section.
- Choose “BRC-20” enter the ticker name (4 letters), & the amount, & click “Submit“
- Select the network fee & click on “Inscribe“.
Summary
As the market for BRC-20 tokens grows, we will be likely to see more interesting use cases emerging.
It should not be considered an attack on Bitcoin, but a chance to enhance the use cases of the blockchain. And please note that this technology is relatively new, so try it with a load of money you can afford to lose.
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