What are BRC-20 Tokens?
BRC-20 tokens are a novel standard on the Bitcoin blockchain, BRC-20 tokens were inspired by Ethereum’s ERC-20. Like Ethereum’s ERC-20 strands for Ethereum Request for Comment, BRC-20 also strands for Bitcoin Request for Comment.
BRC-20 tokens allow the creation, minting, trading, and transfer of fungible tokens or assets on the Bitcoin blockchain through the Ordinals protocol. The Bitcoin Ordinals protocol is a numbering system that allows users to attach extra data to satoshis, the smallest unit of Bitcoin.
The process of attaching extra data to satoshis is called inscription, BRC-20 tokens do not need smart contracts to execute transactions as ERC-20 tokens do, their transactions are done through JSON inscriptions on satoshis through Bitcoin Ordinals.
Differences And Comparison Between BRC-20 And ERC-20
Ethereum’s ERC-20 might have inspired the creation of BRC-20 on the Bitcoin blockchain, but make no mistake, they are not the same, and we are going to explore that in this section of this article.
Operation: One of the key differences between BRC-20 and ERC-20 is that BRC-20 tokens find their home within the Bitcoin blockchain while ERC-20 operates on the Ethereum blockchain.
Implementation: BRC-20 and ERC-20 are both implemented differently; however, BRC-20 is experimental, meaning it has not undergone the BIP process. It only implements changes in the Bitcoin protocol, while ERC-20 has undergone the EIP process, which was approved by the Ethereum community before implementation after being scrutinized.
Security: They are both secure as they are both secure by the top two blockchains in the crypto space, but BRC-20 is secured by the Bitcoin blockchain and ERC-20 is secured by the Ethereum blockchain.
High Gas Fee Or Transaction Fees: They both have high gas fees if you are trading on decentralized exchanges (DEXs).
Wallets: Their wallets are different, you can store your BRC-20 token on wallets that support the Bitcoin Taproot upgrade like Unisat, Xverse, CoinW, and Alex. While ERC-20 tokens are stored on Ethereum-supported wallets like Metamask, Exodus, Trust wallet, Atomic, MyEtherWallet, and all EVM compactable wallets
Smart Contract functionality: BRC-20 tokens do not rely on smart contracts to execute transactions, but ERC-20 tokens do.
Token Value Drive: BRC-20 tokens are token values driven by inscriptions, and ERC-20 token values are driven by utilities and…
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