Thread by @theharristheory

I've been seeing a lot on #BRC20
and #Bitcoin Ordinals and I'll be honest, I don't have a clue what these were. So I decided to change that.

Let's talk about it! 🧵

Understanding BRC-20 Tokens and Bitcoin Ordinals 🟠🟢

#crypto #cryptothread

BRC-20 tokens are a new experimental standard for creating and transferring tokens on the #Bitcoin blockchain. They work similarly to Ethereum's ERC-20 tokens but with some differences. However, it's important to note that BRC-20 tokens are still in the experimental stage.

BRC-20 tokens were made possible through the Ordinals protocol, which allows for the inscription of data on individual satoshis (the smallest unit of Bitcoin). This enables the creation of fungible tokens on the Bitcoin network. #Ordinals #Bitcoin

To create BRC-20 tokens, a pseudonymous programmer named Domo developed the BRC-20 token standards in March 2023. The first BRC-20 token, called "ordi," was deployed, and other tokens, including meme tokens, followed suit. #BRC20 #Bitcoin

BRC-20 tokens utilize the ordi protocol by inscribing JSON data on satoshis to deploy token contracts, mint tokens & transfer them. It's worth noting that the process of deploying, minting, & transferring BRC-20 tokens is not user-friendly, tooling & support services are limited.

While BRC-20 tokens share similarities with Ethereum's ERC-20 tokens, there are important differences. BRC-20 tokens exist on the Bitcoin network and do not use smart contracts, resulting in fewer functionalities compared to ERC-20 tokens. #BRC20 #ERC20

ERC-20 tokens have been widely adopted and proven to function stably since their inception in 2015. In contrast, BRC-20 tokens are still in the experimental stage, and their future is uncertain. Exercise caution and conduct thorough research before engaging with BRC-20 tokens.

It's crucial to understand that BRC-20 tokens carry certain risks & currently have limited utility & ease of minting, which could lead to many tokens becoming worthless. Users & investors should approach BRC-20 tokens with caution & be mindful of the experimental nature.

Bitcoin Ordinals, the underlying protocol for BRC-20 tokens, introduced a new way to generate Bitcoin NFTs by attaching information to individual satoshis through inscription. This expands the possibilities of the Bitcoin blockchain beyond simple value transfers. #Bitcoin

Ordinals work by numbering satoshis and tracking them across transactions, providing stable identifiers for data attached to sats. Ordinals have their advantages, such as simplicity, immutability, security, and durability. #Ordinals #Bitcoin

Ordinals have sparked controversy within the Bitcoin community due to increased network fees and the debate between preserving Bitcoin's simplicity and embracing new features. However, Ordinals have brought innovation to the Bitcoin space, adding new utility and use cases.

Creating a Bitcoin NFT using Ordinals is still a technical process that requires specific knowledge and tools. Minting an ordinal NFT involves steps like running a full Bitcoin node and using a Taproot-compatible wallet. Be prepared for technical complexity and transaction fees.

In conclusion, BRC-20 tokens and Bitcoin Ordinals are experimental developments in the crypto space. While they offer new possibilities, it's important to approach them with caution, conduct thorough research, and be mindful of the risks involved. Stay informed and stay safe!

References:
forbes.com/sites/digital-…

ambcrypto.com/bitcoin-why-or…

cointelegraph.com/explained/what…

academy.binance.com/en/articles/wh…

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