What is BRC-20 and How do you Buy Them?

Introduction

The Bitcoin ecosystem is ever-changing, with new standards and innovations continually emerging to improve the functionality and versatility of digital assets. As a recent innovation, BRC-20 tokens have expanded possibilities and challenged traditional views of Bitcoin's capabilities. This blog will delve into what BRC-20 tokens are and provide a comprehensive guide on how to buy these tokens.

What is BRC-20?

BRC-20, or Bitcoin Request for Comment 20, is an experimental token standard designed for the Bitcoin blockchain. Introduced in March 2023 by an anonymous developer known as Domo, BRC-20 leverages the Ordinals protocol, which inscribes data onto individual satoshis (the smallest units of Bitcoin), to create and transfer fungible tokens.

How do BRC-20 Tokens Work?

BRC-20 tokens are created by inscribing JSON data onto satoshis using the Ordinals protocol, enabled by the Taproot upgrade of November 2021. This process allows for the deployment, minting, and transfer of tokens without the need for smart contracts, which are commonly used in other blockchain ecosystems like Ethereum's ERC-20 standard.

How to Buy BRC-20 Tokens

Step 1: Set Up a Bitcoin Wallet

To buy BRC-20 tokens, you need a Bitcoin wallet that supports these tokens. Here are some popular options:

• Xverse Wallet: Known for its user-friendly interface and multi-currency support, like Runes, BRC-20’s and SIP-10 tokens.

• Ordinals Wallet: A specialized wallet for Bitcoin and its tokens, particularly useful for managing BRC-20 tokens.

• OKX Wallet: A versatile wallet that supports multiple Blockchains, including Bitcoin and its associated token standards.

Step 2: Acquire Bitcoin (BTC)

You need Bitcoin to buy BRC-20 tokens. You can purchase Bitcoin on various exchanges:

• Coinbase

• Binance

• Kraken

• Gemini

Step 3: Connect to a Decentralized Exchange (DEX)

BRC-20 tokens are typically traded on decentralized exchanges that support Bitcoin and its token standards:

• Ordinals Wallet

• UniSat

Step 4: Find and Purchase the BRC-20 Token You Want

Use the search function on the DEX to find the specific BRC-20 token you wish to purchase. Ensure you have the correct token ticker, as contract addresses like those on Ethereum do not exist for BRC-20 tokens.

Liquidium, the leading platform for peer-to-peer Bitcoin borrowing and lending, is now working on adding BRC-20 to their app and website. Currently in development but soon to be implemented, you will be able to borrow Bitcoin against BRC-20 tokens used as collateral.

Developments on BRC-20

The BRC-20 standard is constantly evolving, with BRC-20 2.0 introducing new features and improvements. These developments aim to enhance the functionality, security, and scalability of BRC-20 tokens, making them even more attractive for developers and investors. Some notable advancements include:

• Improved Smart Contract Capabilities: Allowing more complex and versatile applications.

• Enhanced Security Features: Implementing better security protocols to protect users' assets.

• Scalability Solutions: Addressing the scalability issues inherent in blockchain technology to ensure smoother and faster transactions.