Article authors: Peng Yong & Block unicorn
BTC network expansion has always been limited by the network itself. Coupled with BTC maximalists tend to BTC should remain in their original state and avoid excessive modifications to ensure the security and stability of the BTC network. Like Blaji, they will often preach that BTC is the same as gold, BTC a digital gold, emphasizing its superiority in terms of store of value.
A single store of value cannot meet the diverse needs of the BTC ecosystem, and compared with ETH and other blockchains, BTC does have limited capabilities in terms of smart contracts and scaling. While BTC focus on security and decentralization, rather than pursuing fast transaction confirmations or the flexibility of smart contracts.
But the crypto industry is getting bigger, and different communities and factions have different visions and ideas for the future of BTC, and are no longer limited by the ideas of BTC maximizers. The more radical BTC, contrary to BTC fundamentalists, wanted to expand the BTC ecosystem in more possible ways, so that the BTC could have more use cases, and was no longer limited to this, resulting in the easy-to-use Lightning Network (BTC’s layer 2 network), and now BRC 20.
What is BRC 20?
In order to make it easy for more people to understand the BRC 20 and make it easier for everyone to understand the field, let’s explore the BRC 20 in the most popular way and lead you into this exciting track.
In the blockchain space, the way we usually issue tokens is through the issuance of ERC 20 tokens through smart contracts on the ETH network. But in the BTC network, there is no smart contract, and there are only other ways to issue tokens, so @domo (the inventor of BRC 20) invented a protocol that can issue tokens on the BTC network, which is called BRC 20:
1 BTC = 100 million Satoshi / 1 Satoshi (the smallest unit of BTC, 1 Satoshi / 1 Satoshi, consisting of 100 million Satoshi 1 BTC), through the BRC 20 protocol to issue a token or multiple tokens, NFTs, and domain names with 1 Satoshi (1 Satoshi), I will explain the principle of this using popular examples and written language.
Every time we make a transfer in BTC or other blockchain networks, in addition to the amount transferred, you can also fill in the remarks (just like every time you place an order with Meituan, there will be a remarks box, and in the remarks box you can fill in the content you need).
BRC 20 token issuance is also a similar principle, determine the total amount of BRC 20 tokens that need to be issued, deployment, mint (Mint), and transfer, and enter the required information on the remarks box of each satoshi transferred out through the BRC 20 protocol as a marker.
For example, to issue BRC 20 tokens using Unisat or OKX wallets, first set the token name, token supply, and issuance method. We set the token name to AAAA, the total number of tokens is 1000, and the issuance method is deployed. When the user comes to mint AAAA tokens, write in the remarks box: AAAA tokens, with a total issuance of 1,000 tokens, which will be issued in the form of deployment. After the user mints it, they get the BRC 20 token of AAAA, also known as the inscription. The identification information of these BRC 20 tokens can only be identified by indexers, and protocols that support BRC 20 will have their own indexers.
Current BRC 20 Status
On March 8 of this year, anonymous developer Domo launched the BRC 20 protocol, which is based on the Ordinals protocol. The BRC 20 experiment was first launched in the Unisat wallet, setting off a speculative boom, with various copy tokens such as PEPE and DOGE rising wildly, and investors in the crypto community competing for FOMO for fear of missing out on 100 million.
This sentiment continued into May, when OKX, a large organization, issued a statement to enter this unknown and full of opportunities to build the foundation of BRC 20 with everyone. When OKX joined the track, the market suddenly cooled, liquidity shrank, and users and builders rethought whether the track was sustainable. BRC 20, once considered an innovation in the BTC, could not be sustained for too long without value to support MemeCoin, and it came to an end.
People who saw the future first, not frustrated by market speculation and brokenness, continued to build the future, waiting for the wind to come. **
At the end of October and November, the speculative market was still preferential, which rekindled the BRC 20 track, and after several months of construction of Unisat, OKX, Bitgate wallets or infrastructure, it injected new vitality into BRC 20, and users were no longer restricted by transactions in the BRC 20 ecosystem, which stimulated the enthusiasm of investors and developers, and also rekindled the expectation for the future of BRC 20. The new infrastructure upgrade not only improves the performance of the BRC 20 protocol, but also introduces more real-world use cases and features, moving it away from the impression that it is just a speculative tool. Developers are actively exploring new projects to build on BRC 20, and industry leader Unisat has launched the AMM DEX of the BRC 20 protocol, as if seeing the early prototype of ETH DEFI.
There are no practical applications other than wallet applications, indexers, and the DEX infrastructure built by Unisat. The BRC 20 token, which relies on emotional speculation, is still dominating the market, which is also considered to be the scene of early ETH Square ICOs throwing money around.
Future of BRC 20
In the beginning, we did see the emotional hype, we didn’t see the actual value, and speculation didn’t always dominate the market, but it will always exist.
In April ~ May, when Unisat first appeared to serve this market, the entire market foundation was desolate, because users who want to trade BRC 20 tokens need 20 points to buy and sell freely in the Unisat market (which means that users need to mint/mint more than 20 times to buy and sell freely), restricting users’ transactions, and users can’t stay here for too long, on-chain products are hard enough to use, and users in the crypto market will not tolerate products that restrict their free trading.
It was precisely because of the lack of infrastructure in the BRC 20 market that it could not maintain the prosperity of the ecology at that time, so the market was fleeting and was questioned.
After months of setbacks and construction, BRC 20 has taken a turn for the better, getting back on its feet to prove to the market that it hasn’t fallen. With this rise, we see that the OKX wallet accounts for 70% of the BRC 20 trading volume, and there is no limit to user transactions, and the user experience is smooth. At the time of the last cooldown of BRC 20, OKX Wallet announced that it would join the BRC 20 ecosystem for patient construction, focusing on user experience, and getting the best results when the market bloomed.
Conclusion
BRC 20 has experienced a process of decline and rise as a new wave of innovation in BTC networks. With the continuous improvement of Unisat wallet and the addition of large institutions such as OKX and Bitgate, the construction of this ecosystem has been accelerated, and we will see more practical applications in the future - DEX/DEX aggregators, cross-chain aggregators, stablecoins, games, etc.
Finally, in this article, I haven’t talked too much about the BRC 20 token and ecological projects. At this stage, it is mainly MemeCoin that dominates this market, and there is a lack of ecological project construction, there is a high risk, if you want to participate in this market, you can first learn how to mint tokens in Unisat and OKX wallets.
BRC 20 will continue to attract more attention and engagement, witnessing it thrive from concept to ecosystem.
