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BRC-20
The BRC-20 standard enables the implementation of new use cases in the Bitcoin network, along with the release of the Ordinals protocol, on which BRC-20 relies. It was launched as an experiment that allowed JSON data to be written into satoshis (minimum units of Bitcoin). This opened the door to new uses of the ecosystem, similar to those allowed by the ERC-20 (Ethereum) or BEP-20 (Binance Smart Chain) standard. Albeit with certain limitations, as the BRC-20 standard does not support the use of smart contracts.
- Positive factors: the BRC-20 tokens are easy to create and enhance Bitcoin’s presence in DeFi space. The BRC-20 standard expands the versatility of the Bitcoin ecosystem and can be used to tokenize physical assets.
- Negative factors: BRC-20 tokens are alien to the Bitcoin system itself, as they are exchanged on a secondary market. In addition, they tend to saturate the network and increase fees, and there are few wallets compatible with them.