The world of blockchain is evolving rapidly, and one of the most talked-about innovations in 2025 is the BRC-20 token standard. Introduced in March 2023 by an anonymous developer known as “Domo,” BRC-20 has sparked a new wave of interest in Bitcoin’s capabilities beyond simple peer-to-peer transactions. While many are familiar with Ethereum’s ERC-20 or BNB Chain’s BEP-20 standards, BRC-20 brings a fresh approach—issuing fungible tokens directly on the Bitcoin blockchain.
This surge in innovation has coincided with the explosive popularity of meme coins like PEPE and PUNK, most of which are built using the BRC-20 framework. Their rapid creation and price surges have drawn both excitement and skepticism. Is BRC-20 a legitimate evolution of Bitcoin’s utility, or just a speculative bubble? Let’s dive into what BRC-20 truly is, how it works, and whether it holds long-term potential.
Understanding the BRC-20 Token Standard
At the time of writing, BRC-20 tokens have approached a market capitalization of $1 billion, with over 14,000 unique tokens minted on the Bitcoin blockchain. This growth has been fueled by increased transaction activity, rising miner fees, and growing developer interest.
👉 Discover how blockchain innovation is reshaping digital assets in 2025.
What Is a BRC-20 Token?
BRC-20 is an experimental token standard inspired by Ethereum’s ERC-20. However, unlike ERC-20, it does not rely on smart contracts. Instead, BRC-20 leverages the Ordinals protocol, which allows users to inscribe data—like text, images, or code—onto individual satoshis (the smallest unit of Bitcoin). These inscriptions form the backbone of BRC-20 tokens.
Each BRC-20 token is created by embedding a small piece of JSON data into a Bitcoin transaction via the Taproot upgrade. This data defines the token’s name, supply, and minting rules. For example, the first BRC-20 token, “ordi,” had a hard cap of 1,000 tokens per mint and a maximum supply of 21 million.
Because these tokens are stored directly on Bitcoin’s base layer, they inherit Bitcoin’s security and decentralization—but also its limitations in terms of scalability and functionality.
How Are BRC-20 Tokens Created?
The creation of BRC-20 tokens relies on two key Bitcoin upgrades:
- SegWit (2017): Separated signature data from transaction data, increasing block capacity.
- Taproot (2021): Enabled more complex scripting and allowed arbitrary data to be embedded in transactions.
Using these upgrades, developers can inscribe JSON code into satoshis, effectively creating a token ledger on-chain. When someone mints a BRC-20 token, they are not deploying a smart contract but rather broadcasting a transaction with specific metadata.
For instance:
{
"p": "brc-20",
"op": "deploy",
"tick": "pepe",
"max": "21000000",
"lim": "1000"
}This JSON snippet deploys a new token named “pepe” with a max supply of 21 million and a limit of 1,000 per mint.
As demand grows, so does network congestion. At its peak, BRC-20 transactions accounted for over 366,000 out of 2.36 million daily Bitcoin transactions, driving up fees and sparking debate about whether this use case aligns with Bitcoin’s original vision.
BRC-20 vs. ERC-20: Key Differences
While both standards enable fungible tokens, their underlying architectures differ significantly.
| Aspect | BRC-20 | ERC-20 |
|---|---|---|
| Blockchain | Bitcoin | Ethereum |
| Smart Contracts | No | Yes |
| Functionality | Limited (no DeFi integration) | High (supports lending, staking, etc.) |
| Data Storage | On-chain via Ordinals | Contract-based |
| Upgradability | Not upgradeable | Upgradeable via new contracts |
Key Takeaways:
- BRC-20 tokens cannot execute smart contracts, meaning they can’t interact with decentralized applications (dApps) or participate in DeFi protocols.
- They are stored directly on satoshis, making them immutable but also inflexible.
- Any future changes to Bitcoin’s consensus rules could potentially invalidate existing BRC-20 tokens.
In contrast, ERC-20 tokens benefit from Ethereum’s robust ecosystem, enabling complex financial operations like yield farming and liquidity provision.
How to Buy and Sell BRC-20 Tokens
Trading BRC-20 tokens requires specialized tools due to their unique structure.
Step-by-Step Guide:
- Get a Taproot-enabled Bitcoin wallet (e.g., UniSat Wallet, Ordinals Wallet).
- Fund your wallet with BTC to cover transaction and inscription fees.
Connect to a marketplace that supports BRC-20:
- Centralized: UniSat Marketplace
- Decentralized: OrdSwap (lower liquidity)
To buy a token like “PEPE,” you’ll need to locate its inscription ID, initiate a transfer, and pay miner fees—often higher during peak congestion.
Selling options include:
- Transferring tokens to another wallet
- Listing them on decentralized exchanges
- Auctioning via NFT-style platforms
- Burning tokens by sending them to an unspendable address
⚠️ Note: There is no universal swap mechanism like Uniswap for BRC-20 tokens. Trades are peer-to-peer and often manual.
👉 Explore secure ways to manage digital assets across blockchains.
Should You Invest in BRC-20 Tokens?
The decision depends heavily on your risk tolerance and investment philosophy.
Potential Upsides:
- High volatility: Some tokens have seen thousands of percent gains in days.
- First-mover advantage: Early adopters of PEPE-like tokens reaped massive returns.
- Bitcoin-native utility: Adds new use cases to the oldest blockchain.
Major Risks:
- Experimental nature: BRC-20 is untested at scale and lacks formal governance.
- No intrinsic utility: Most tokens serve no functional purpose beyond speculation.
- Network strain: Increased usage raises transaction fees for all Bitcoin users.
- Regulatory uncertainty: Could attract scrutiny as unregulated securities.
Some experts compare the BRC-20 trend to CryptoKitties in 2017, which temporarily congested Ethereum but didn’t lead to lasting value for most participants. Similarly, while BRC-20 has introduced novelty to Bitcoin, it may not represent sustainable innovation.
Frequently Asked Questions (FAQ)
Q: Can BRC-20 tokens be used in DeFi protocols?
No. Since BRC-20 lacks smart contract functionality, these tokens cannot be used in lending platforms, DEXs like Uniswap, or yield-generating protocols.
Q: Are BRC-20 tokens considered NFTs?
Not exactly. While both use Ordinals and inscriptions, NFTs are non-fungible (unique), whereas BRC-20 tokens are fungible (interchangeable). However, they share the same technical foundation.
Q: Do I need a special wallet for BRC-20?
Yes. Standard Bitcoin wallets don’t support Taproot inscriptions. You must use wallets like UniSat or Ordinals Wallet that can read and manage ordinal data.
Q: Can I create my own BRC-20 token?
Absolutely. Anyone can deploy a BRC-20 token by inscribing JSON data through a compatible wallet or tool. No approval or coding expertise is strictly required.
Q: What happens if Bitcoin changes its protocol?
Future upgrades to Bitcoin could render current inscription methods obsolete. This poses a real risk to the longevity of BRC-20 tokens.
Q: Is the BRC-20 standard officially supported by Bitcoin Core?
No. The standard was created independently and is not endorsed by Bitcoin’s core developers. It operates in a gray area of acceptable on-chain data usage.
Final Thoughts: Hype or Innovation?
BRC-20 represents a fascinating experiment in pushing Bitcoin beyond its original design. By leveraging Ordinals and Taproot, developers have unlocked new possibilities for tokenization on the world’s most secure blockchain.
However, the current landscape is dominated by meme-driven speculation rather than practical utility. While early investors may profit, long-term sustainability remains questionable—especially given Bitcoin’s emphasis on simplicity, security, and decentralization over feature expansion.
As with any emerging trend, caution is advised. Treat BRC-20 investments as high-risk ventures, conduct thorough research, and never invest more than you can afford to lose.
👉 Stay ahead of the curve with real-time insights into emerging blockchain trends.
Core Keywords:
BRC-20 token, Bitcoin blockchain, Ordinals protocol, fungible tokens, Taproot upgrade, meme coins, token standard, blockchain innovation