# BRC20 ( ARHCIVED ) ## Whats BRC-20 ? BRC-20 is an experimental token standard that enables the minting and transferring of fungible tokens via the Ordinals protocol on the Bitcoin blockchain. Taking a cue from Ethereum's [ERC-20 tokens](https://academy.binance.com/en/articles/an-introduction-to-erc-20-tokens), BRC-20 tokens feature different mechanisms and functions. Despite gaining massive popularity during the first half of 2023, BRC-20 tokens are still experimental, and users should exercise extreme caution. BRC-20 tokens are interoperable with other Bitcoin-based assets. It can be traded directly to Bitcoin on BitX and vice-versa. BRC-20 tokens inherit the security properties of the Bitcoin network, including its resistance to double-spending, also known as the 51% network attack. ### How Were BRC-20 Tokens Created? After the Bitcoin [Ordinals](https://academy.binance.com/en/articles/what-are-ordinals-an-overview-of-bitcoin-nfts) protocol launched in January 2023, enabling NFTs (non-fungible tokens) to be inscribed on satoshis (sats), there has been curiosity about whether fungible tokens could be created on Bitcoin. BRC-20 token standards were created in March 2023 by a pseudonymous programmer named Domo to make minting fungible tokens on Bitcoin possible. The first BRC-20 token deployed was called "ordi." Bitcoin wallets quickly deployed tooling to support BRC-20 tokens. Numerous other BRC-20 tokens, many of which are [meme tokens](https://academy.binance.com/en/articles/what-are-meme-coins), were launched in the months after. As of May 2023, some BRC-20 tokens have experienced astronomical price increases and obtained significant market caps. The demand for BRC-20 tokens caused Bitcoin transaction fees to surge and caused significant congestion on the Bitcoin network. ### How Do BRC-20 Tokens Work? It's important to know how Bitcoin Ordinals work to better understand BRC-20 tokens. The Ordinals protocol is a system for numbering satoshis and allows users to attach extra data to [satoshis](https://academy.binance.com/en/glossary/satoshi) in a process known as "inscription." BRC-20 tokens utilize Ordinals inscriptions of JSON (JavaScript Object Notation) data to deploy token contracts, mint, and transfer tokens. Currently, the BRC-20 token standard allows creating a BRC-20 token with the deploy function, minting an amount of BRC-20 tokens with the mint function, and transferring an amount of BRC-20 tokens via the transfer function. The BRC-20 token standard is new and the process of deploying, minting, and transferring BRC-20 tokens isn't user-friendly. There are also a limited number of tooling and supporting services. ### Differences Between BRC-20 and ERC-20 Tokens Despite the similarity in their names, there are significant differences between the two tokens. BRC-20 tokens exist on the Bitcoin network, while ERC-20 is a standard on the Ethereum network. BRC-20 tokens don't use [smart contracts](https://academy.binance.com/en/articles/what-are-smart-contracts) and, therefore, have much less functionality. On the contrary, ERC-20 tokens can interact with other protocols and applications to enable a wide range of services, including borrowing and lending. ERC-20 is a mature token standard with a massive number of ERC-20 tokens already created and widely used. Conceived in 2015 and officially recognized in 2017, ERC-20 tokens have been battle-tested and proven to function stably. That's not the case with BRC-20 tokens, whose future has a high degree of uncertainty. ### Risks of BRC-20 Tokens The BRC-20 token standard is currently an experiment by programmers to facilitate fungibility on the Bitcoin blockchain. As it's still being tested, many things could go wrong. Despite the hype, BRC-20 tokens have little utility at present. The outlook is also highly questionable. Due to the ease of minting BRC-20 tokens, it's possible that most could end up being worthless. Users and investors should be cautious and conduct proper research before engaging with this new token type. --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://docs.bxdx.io/brc20-arhcived.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.