What are Bitcoin NFTs? Explained for Beginners
BRC-20 tokens are a type of tokens that are stored and issued on the Bitcoin blockchain itself. Unlike other token standards that run with EVM Chains. The BRC20 Token can only store script files in Bitcoin which are used to assign tokens to Sats (Satoshi) which enables these files to move from one user to the other.
What is Ordinals Protocol?
The Ordinals Protocol is what brought BRC20 Tokens into existence. The Bitcoin Taproot upgrade in November 2021 brought about this layer 1 protocol to the crypto world.
The Ordinals protocol enabled Sats to carry additional data over the blockchain, with a data size of approximately 3.9MB per Satoshi.
The method used to add data to Sats is called ‘inscription’. People can use Ordinal Inscriptions of JSON data to deploy token contracts, mint tokens, write messages, digital art, images & videos to Bitcoin. However, smart contracts are a feature that is yet to come to this layer 1 protocol.
What is BRC 20 Blockchain?
The BRC20 token’s blockchain is basically the Bitcoin blockchain. BRC tokens are issued on the Bitcoin blockchain that’s secured by a proof of work mechanism. They are different from the ERC20 Tokens which are issued on the Ethereum blockchain and secured by proof of stake mechanism.
Who created BRC 20 tokens?
BRC-20 Token was launched in March 2023 by a developer called ‘Domo’ who decided to stay anonymous. However the developer is active on Twitter (now X) on his personal id @domodata.
What are Bitcoin NFTs?
Bitcoin NFTs are simply ‘ordinal inscriptions’. These Ordinals are similar to NFTs as they are digital assets that are inscribed on the lowest denomination of a BTC (bitcoin) called Sats (satoshi) which is named after the creator of Bitcoin, Satoshi Nakamoto.
Bitcoin NFTs (Ordinals) vs NFTs: The Difference
Even though both share a similar name they are not even close to being similar. Bitcoin NFTs only exist on-chain and are immutable, which means they can not be altered in any way. As for NFTs, they are not always immutable and can exist off-chain as well.
Another difference between the two is linked with their metadata.
Ordinals store metadata with the witness signature field of the Sats transaction, unlike NFTs which store the metadata separately.
That being said the two main similarities shared by Ordinals and NFTs are that they both are associated with digital art and both of them are Non-fungible.
Is 1000X BRC 20 token a possibility?
In the current crypto scenario only time will tell if this new stir in the Bitcoin world will go to the moon or not. Even though most of the OG Bitcoin believers are not in favour of any changes being made to Satoshi Nakamoto's vision of Bitcoin, the newer generation however believes that Bitcoin needs to evolve and this could be just the right spin needed to kickstart the Bitcoin evolution.
Trade Bitcoin, Ethereum and 200+ other coins with 0 fees* on Zelta.io
Image Credits: Ovex.io; Ordinal Punks.
(Also Read: What are Gas Fees in Web3?)
(Also Read: What are CC0 NFTs?)