Main TakeawaysIn this ongoing blog series, we offer concise summaries of our research team’s findings, inviting you to take a deeper dive into the original reports. This article previews the recent Binance Research report discussing BRC-20, an experimental token standard enabling fungible tokens on the Bitcoin blockchain. The emergence of BRC-20 has been met with mixed responses. We are still in the early stages and have yet to see whether it is sustainable in the long run.Thanks to Binance Research, you can take advantage of industry-grade analyses of the processes that shape Web3. By sharing these insights, we hope to empower our community with the latest knowledge from the field of crypto research. For a deeper dive, the full reports are available on the Binance Research website.In 2023, the Bitcoin ecosystem has seen a resurgence of innovation with the development of so-called ordinals. The Ordinals protocol went live at the start of the year, enabling new entities like “inscriptions” – often called “Bitcoin NFTs” – to start gaining prominence with the crypto community. BRC-20 tokens are the latest innovation of this Ordinals-driven movement and have been a hot topic of discussion in recent months. Many are excited by the new energy this innovation is bringing, while others see it as a deviation from Bitcoin’s original purposes and are less satisfied with its impacts.Today, we will investigate the rise of BRC-20 by exploring its background and the community’s response. We will also discuss the risks and challenges that BRC-20 tokens currently pose, giving insight into what could be improved in the future. BackgroundBRC-20 is an experimental token standard that was first conceptualized in March 2023. It enables the deployment, minting, and transferring of fungible tokens on the Bitcoin blockchain. This latest Ordinals-driven innovation means that both fungible and non-fungible tokens (NFTs) have become part of the Bitcoin ecosystem.It should be noted that BRC-20 tokens are extremely risky and in a very early stage of development. The creators themselves have been explicit about the risks of their experimental nature. This aspect should be kept in mind when reading, and this material is not intended to endorse or advise, only to educate.
