Glossary / Protocol & upgrades
BRC-20
- Definition
- BRC-20 is an experimental token standard that writes JSON text into ordinal inscriptions and leaves every balance to be computed by off-chain indexers rather than by bitcoin.
Three verbs written as text files: deploy, mint, and transfer. A pseudonymous developer known as Domo published the idea on March 8, 2023, described it openly as an experiment, and said the resulting tokens should be considered worthless. Bitcoin validates none of the accounting, which is the single most important fact to carry into any decision about buying one.
How it works
A BRC-20 token is a series of short JSON documents inscribed one after another, and the rules for reading them live entirely in software that anyone is free to write.
Deploying means inscribing something in the shape of {"p":"brc-20","op":"deploy","tick":"ordi","max":"21000000","lim":"1000"}. The p field names the protocol, tick is a four character ticker, max sets the total supply and lim caps how much a single mint may claim. The first token to use it, ordi, chose a maximum of 21,000,000 units in an obvious nod, releasing 1,000 at a time.
Minting means inscribing an op of mint until the declared cap is reached. First come, first served: an indexer counts mints in block order and stops honouring them past the maximum, so the closing mints of a popular token become a public race decided by fee rate.
Transferring is the awkward part. You inscribe a transfer instruction, which produces an inscription representing that amount, then send that inscription to the recipient in a second transaction. Two on-chain events per payment, both of them ordinary bitcoin transactions paying ordinary fees.
None of the above is enforced anywhere. A bitcoin node sees inscriptions and does not read them. Balances exist only inside indexers, and where two indexers disagree there is no rule, no chain, and no vote to settle it. That is a different security model from bitcoin, not a smaller version of the same one.
Where you see it
BRC-20 turns up in marketplace listings and in specialist wallets, not in the software most people use to buy bitcoin.
Exchanges list a handful of the larger tickers and ignore the thousands of others, and the ones they skip are usually the ones with no buyers at all. The mint mechanic is the part with consequences for everybody else: an open mint is a public race, thousands of people broadcast near identical transactions inside a few minutes, and the fee rate everyone pays climbs with them. Savers withdrawing during one of those windows pay several times the going rate for a transaction that has nothing to do with tokens.
A scam pattern rides alongside it. A token with no issuer, no obligation, and a supply defined by whichever indexer you happen to trust is very easy to promote and very easy to abandon, which is why these launches recur in the wreckage we catalogue elsewhere on this site.
BRC-20 vs Runes
BRC-20 and Runes are both fungible token schemes on bitcoin from the same broad community, and they store their state in opposite places. BRC-20 keeps a running balance per address inside an indexer, reconstructed by replaying every inscription in order, and it needs at least two transactions to move anything. Runes attaches balances to unspent outputs and encodes its instructions in a single OP_RETURN, which nodes discard from the set of live coins instead of carrying forever. Runes was designed after BRC-20 and largely in reaction to it, by the author of ordinal theory himself, which tells you what he made of the original.