What is brc20 blockchain?

BRC-20 tokens exist on the Bitcoin blockchain. In other words, they're assets that exist on the Bitcoin network. They aren't blockchains in and of themselves. These tokens are most comparable to ERC-20 tokens like Shiba Inu (SHIB) or ApeCoin (APE), which exist on Ethereum. However, BRC-20 tokens don't have built-in smart contract capability, while ERC-20 tokens do.

How does BRC 20 work?

BRC-20 tokens work like ERC-20 tokens. You can store and transfer BRC-20 on the Bitcoin network just as you can with ERC-20 tokens on Ethereum. These tokens work thanks to Bitcoin's Taproot upgrade, which occurred in November 2021. The taproot protocol requires a special type of inscription that requires a certain type of address in order to create, send and receive BRC-20 tokens.

What is Ordinals on BTC?

Ordinals on the Bitcoin network are similar to NFTs on the Ethereum network. They were created in January 2023, and over 600,000 had been minted by May 2023. The ordinals protocol enables people who run Bitcoin nodes to inscribe data on the blockchain. That data can include smart contracts that can host an image. This process is similar to how NFTs are hosted on Ethereum, but not exactly the same.

What is the difference between NFT and Ordinals?

A key difference between Ordinals and NFTs is that Ordinals exist on the Bitcoin blockchain, while NFTs exist on Ethereum and other smart contract blockchains. However, there's also a technical difference regarding how both are stored. Ordinals are inscribed directly on-chain, while NFTs are stored off-chain on networks like the Interplanetary File System (IPFS), which is like a decentralized hard drive for the blockchain.

James Edwards

Editor

James Edwards was the global cryptocurrency editor at Finder. He coordinates a distributed team of journalists to help further Finder's mission of helping people make better financial decisions.

He has been using Bitcoin since 2013 and began working in the industry in 2017. He takes pride in boiling down complex topics into language his parents can understand.

His expertise has seen him called on to report at events such as TechCrunch Disrupt, CoinDesk Consensus and IBM Think and has coordinated a vast number of high-profile interviews with the industry's brightest minds.

He is a regular contributor to Nasdaq, The Street and is frequently called upon for market commentary in Australia and abroad.

Education

Bachelor of Psychology (University of Sydney)
User Experience Design (General Assembly)

Featured publications

Regular contributor to NASDAQ and The Street

Is it best to stick with just one exchange?

It's difficult to find one exchange with all the coins and features you want. I spread my trading around several exchanges to make sure I'm getting exactly what I need, while also diversifying my risk, should the exchange get hacked or shut down. To further minimise my risk I use one registered locally, so they are subject to local laws and regulations.

Crypto wallets are difficult – are they really necessary?

Learning to use a crypto wallet is an essential part of your journey, but many people find them difficult to use at first. Go slow, read plenty about how they work and remember that each blockchain is different. Test out transactions with small amounts to prevent big mistakes. If you've got a sizeable investment, then consider using a hardware wallet for the best security.

Who needs a hardware wallet?

A hardware wallet is essential for anyone serious about cryptocurrency. They offer the highest level of security for your long-term investments and can be paired with a Web3 wallet for use with DeFi. I never use crypto without one. After security, the main difference is the number of blockchains supported, so make sure to choose one that suits your portfolio.

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