BRC 20 and ERC 20

 

BRC-20 and ERC-20

 

Source: makeuseof.com 

To read this post, I would like you to first read about ordinals and inscriptions through https://immtalimm.blogspot.com/2023/08/what-are-ordinals-and-inscriptions.html. BRC-20 (Bitcoin Request for Comment) is an experimental fungible token standard that operates on Bitcoin network. BRC-20 leverage the power of ordinals and inscriptions to create fungible tokens natively on Bitcoin. On the other hand, ERC-20 (Ethereum Request for Comment) rely on smart contracts for their functionality. BRC-20 token uses inscriptions to embed JSON data into satoshis, enabling users to deploy, mind, and transfer tokens.

BRC-20 tokens were introduced on March, 9, 2023, by an anonymous developer named domo. Since then, the application of Bitcoin has surpassed its traditional purpose i.e., digital currency only, to a rise in demand for BRC-20 development companies, as businesses and individuals look to leverage this innovative technology.

ERC-20 was first put forward in 2015 by Fabian Fogelsteller in the 20^th comment of a Github post. The core focus of ERC-20 is to give tokens the ability to use smart contracts, a key attribute of the Ethereum blockchain as a whole. Smart contracts can automatically execute agreements when a set of specific conditions are met, eliminating the need for a middleman or third party. Read more about smart contracts at https://immtalimm.blogspot.com/2023/08/what-is-smart-contracts.html

ERC-20 is an incredibly popular token used by all fungible tokens created on Ethereum blockchain. Each token must have the same value for the tokens to be fungible. For example, shiba Inu, Tether, USD Coin, Chainlink, Uniswap, BNB Coin, and Wrapped Bitcoin are some of the biggest tokens in the crypto world using the ERC-20 standard.

Apart from enabling smart contracts, ERC-20 enables other features such as transferring tokens, using tokens on other platforms, and finding out the token balance of a given account or wallet. ERC-20 tokens are no available to trade on big exchanges like Binance, Coinbase, and Kraken.

In the whelm of competition, Bitcoin also launched BRC-20 to enable developers to create tokens on the Bitcoin blockchain. BRC-20 uses the ordinals protocol to function and was launched in Jan, 2023 – two months before the BRC-20, addressing the inability of the Bitcoin blockchain to host NFTs. However, NFTs are non-fungible and cannot be directly exchanged with another to make a trade.

It is also to be noted that NFTs were not available in Bitcoin blockchain until the launch of Ordinals. With the inception of Ordinals, data can be inscribed onto Satoshi, during a transaction, effectively creating an NFT. With the birth of BRC-20 token standard, fungible assets can be created and minted on the Bitcoin blockchain. Some of the notable BRC-20 tokens for example are ORDI, PEPE, MEME, BAYC, and RARE.

Difference between BRC-20 and ERC-20

BRC-20	ERC-20
Uses inscriptions to store script file on the bitcoin network, enabling users to attribute tokens to individual satoshis.	Use smart contracts for their functionality
Created on Bitcoin Network	Created on Ethereum blockchain
Semi-fungible, as they can be exchanged in set increments	Fully fungible, as they can be traded in any quantity.