How Were BRC-20 Tokens Created?

BRC 20 created

In the vast landscape of blockchain technology, the creation of tokens has now become a cornerstone for decentralized applications and various blockchain technologies with Bitcoin being the undisputed king of digital currency. With the secure, decentralized network provided the unparalleled store of value having rigidity as the limited use of fungible token standards: assets such as NFTs (non-fungible tokens and DeFi (decentralized finance) protocols thrive on various blockchains due to their built-in flexibility. One such type is BRC-20 tokens that came into existence, and it is essential to delve into the origins of the Binance Smart Chain and the underlying principles of token creation.  

Binance Smart Chain (BSC) Overview 

BRC-20 tokens are a revolutionary innovation that brought fungibility to the Bitcoin network. Such tokens were launched in March 2023, which has opened door for a new era of possibilities within the Bitcoin ecosystem. But how did these groundbreaking assets appear to be? Let us understand the story of how they are created. 

Let us start with the Binance Smart Chain (BSC) overview and has been introduced by the renowned crypto exchange Binance, in September 2020. It stands as a parallel blockchain to Binance Chain, aiming to provide fast and low-cost substitute for decentralized applications (DApps) and smart contracts. BSC’s compatibility for Ethereum Virtual Machine (EVM) allows developers to easily mitigate their projects from Ethereum to BSC, thus making it a favorable choice for all in the crypto space.  

The Taproot and Ordinals: Seeds of Innovation 

Genesis phase for BRC-20 tokens is traced back to two important developments that took place within the Bitcoin network. 

  • The Taproot Upgrade (November 2021): This upgrade increased the data capacity of Bitcoin blocks. These further paves the way for inscription of complex structures of data. This further laid the foundation for the next crucial step. 
  • Bitcoin Ordinals Protocol (January 2023): This protocol, was started by Casey Rodarmor, a software engineer that enabled the inscription of data directly onto individual satoshis (the smallest units of Bitcoin). This ability to “attach” information to the satoshis opened new doors of some unique and profound abilities. 

Birth of BRC-20 and Domo 

A programmer with his pseudonym Domo, saw this potential in Bitcoin Ordinals and hence recognized the missing pieces- a standard for creation and management of fungible tokens. In March 2023, the introduction of BRC-20 standard, these set of rules and specifications are present for building tokens directly on the Bitcoin blockchain. 

Additionally, BRC-20 tokens are created through the deployment of smart contracts as self-executing contracts within the terms of the agreement directly written in code. These contracts assist in the creation, management, and transfer of BRC-20 tokens.  

EVM Friendliness 

Binance Smart Chain’s compatibility with the Ethereum Virtual Machine streamlines the process of creating BRC-20 tokens. Hence, developers can now leverage the existing Ethereum tools, libraries, and documentation to build the smart contracts and deploy them on BSC. 

Token Standards 

BRC-20 tokens adhere to specific standards that are defined by the Binance Smart Chain. Such standards conform uniformity, wallets enablement, and salient blockchain infrastructure, to recognize and interact with BRC-20 tokens seamlessly. These standards dictate functions such as token transfers, approvals, and some balances.  

Burning and Minting Tokens 

Token minting includes the creation of new tokens, whereas burning refers to the process of permanent removal of the tokens from circulation. Such actions are typically governed by the smart contract’s rules and are a pivotal part of the supply dynamics for BRC-20 tokens.  

How BRC-20 Tokens Leverage Bitcoin Ordinals? 

  • JSON Inscriptions: BRC-20 tokens do not use smart contracts like on other blockchains. Instead, they embed JSON data into ordinal inscriptions. This data includes information such as total token supply, the transfer rules, and some other parameters. 
  • Script Files: For controlling the token’s behavior, creators write script files that contain functions such as deployment, minting, and transfer of tokens. These script files are also inscribed as ordinals.  
  • Native Integration: BRC-20 tokens live directly on the Bitcoin blockchain, leveraging the security and decentralization process. No centralized servers or additional platforms are needed.  

Rise of Tokenized Bitcoin 

With the launch of BRC-20 this sparked a wave of innovation. Numerous tokens, with playful names such as “ORDI,” “SATS,” and “PEPE” have quickly flooded the market. Such tokens demonstrate the diverse possibilities of BRC-20 including: 

  • Decentralized Finance (DeFi): Lending, borrowing, and yield generation protocols are built on Bitcoin, further expanding its financial utility. 
  • Loyalty Programs and Rewards: Some organizations can issue redeemable tokens that incentivize customer engagement.  
  • Voting and Governance: Token holders can now participate in shaping the future of projects utilizing further BRC-20 tokens. 

Controversies and Challenges 

Despite the excitement around Ordinals and BRC-20 tokens there are various challenges. Critics often raise concerns about increased transaction costs such as fees and some potential network congestion due to the large data load on inscribed tokens. Additionally, all the newness of standard creates space for potential technical exposures and vulnerabilities with unforeseen security risks. 

Despite these concerns, the potential for BRC-20 remains an undeniable factor. It gives importance to the paradigm shift of Bitcoin and its expansive use case and promises the coming era of functionality and unlocking a vast array of use cases that were previously a mere idea. 


Who Created BRC-20?  

The exact identity of BRC-20 developer remains unclear, a programmer with the pseudonym of Domo is credited with developing this standard. 

Is BRC-20 totally safe? 

Security of BRC-20 strongly depends on the underlying Bitcoin network and individual token protocols. While the Bitcoin network is highly secure, new token standards have specific vulnerabilities that need thorough testing and community scrutiny. 

What Are the Challenges of BRC-20? 

There are certain challenges associated with BRC-20 such as scalability issues and potential security risks due to the newness of the standard as key concern areas. 


BRC-20 tokens emergence has paved a new road to innovation and further utilization of Bitcoin ecosystem. By unlocking the fungibility factor, it widens the doors of diverse applications and further expands Bitcoin’s reach beyond its original vision. As challenges remain, the potential of BRC-20 is undeniable there is a promising future for Bitcoin and the broader cryptocurrency landscape.  

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