What Are Bitcoin’s BRC-20 Tokens & Should You Invest in Them?

If you are in any way familiar with the ERC-20, understanding BRC-20 will be super easy for you. On expanding, BRC literally means Bitcoin Request for Comment, a Bitcoin equivalent to the Ethereum Request for Comment.

The basic difference between the BRC-20 and ERC-20 coins is the blockchain they are based on. The BRC-20 coins follow the technologies and security offered by Bitcoin’s blockchain. 

Whereas Ethereum’s $420 billion is easily beaten by Bitcoin’s $1.3 trillion market cap, they collectively dominate the sector with over 70% share of the global market. Also, learn about Difference Between XMR Versus FIRO by reading this article.

However, it is still not a justifiable answer whether BRC-20 is an investable option or not. So, read this write-up till the end to find your answer and find the best wallet for BRC-20.

What is BRC-20, And What Does It Do?

To put it out in the simplest way possible, BRC-20 lets you build a cryptocurrency over Bitcoin’s blockchain model for business or for personal use. If compared to Ethereum’s blockchain model, everything is pretty much the same in both of them, with some minute differences.

At its core, the BRC-20 is all about providing a platform to create new digital assets. As per the resources from the internet, the Bitcoin blockchain got its initial push from the NFTs. Since the NFT game was primarily focused on the Ethereum blockchain, they were at the same time non-fungible assets.

On the contrary to those points, BRC-20 are made as fungible tokens. Hence, they can be interchanged with new types of tokens.

What Are the Features of BRC-20?

Being developed by one of the most sophisticated technologies, BRC-20 holds some captivating features. The following is the list of those features: 

• Compatibility: Being developed on Bitcoin’s blockchain infrastructure, any digital currency based on BRC-20 can easily be integrated with Bitcoin.
  
• Simplicity: The reason BRC-20 does not offer simple contracts is also to promote simplicity across the operations. Thanks to the tokenization method, the minting and transferring process is easier than ever.
  
• Security: The most obvious feature that BRC-20 holds is security. Being supported by blockchain technology, which too developed by Bitcoin, can easily win the trust for security. Admitting the advanced security system offered by Bitcoin, BRC-20 sets a standard in this aspect for future digital currencies.

What Are Some Challenges With BRC-20?

Admitting the fact that BRC-20 is modern and all, still, there are still some challenges to overcome. The following is the list that mentions all of them:

• Complex User Experience: Unfortunately, BRC-20 is still a bit complex at some stages. These stages include deploying, minting, and transferring tokens, etc.
  
• Still in Experimental Stages: Various aspects regarding BRC-20 are still in the experimental stage, therefore, you must be aware of the moves you are making over the period of time.
  
• Lack of Versatility: Many features of the BRC-20 are limited in nature. Missing features like smart contracts, limited transfers, and token minting can result in a lack of versatility.

What Are the Uses of BRC-20 Tokens?

Thanks to its advanced and modern development, BRC-20-based tokens can be used in numerous aspects. The list below may give you an idea:

The primary or basic role of transferring amounts is to go for Peer to Peer transfer. Just working as a payment method, you may send BRC-20-based tokens from one wallet to another. Also, it doesn’t matter at what location these wallets are, BRC-20’s decentralized network takes care of it all. 

Thanks to DeFi, BRC-20-based coins are generally more flexible than Bitcoin itself. With decentralized finances, BRC-20 tokens can be integrated into leading protocols, yield farming, etc. 

When speaking of our regular currencies like dollars, rupees, yen, etc., they are mainly based or pegged with a real commodity such as gold. Although several ideas are introduced where currencies do not need to be supported by any commodity, still, the older option is still preferred. 

That is why, BRC-20 has sought help from the JSON code to define the commodity on which they need to be tokenized. 

Final Words — Should You Invest in BRC-20 Coins?

With the recent hype of NFTs and top cryptocurrencies, BRC-20 coins have undoubtedly become quite popular in the space. Thanks to all the hype and the promotion through word of mouth, there were a number of tokens that were developed such as MEME, PEPE, etc.

However, investing your money just because of the hype is not a wise decision. So, it is advised to run a thorough research first. As per our take on this question, since the technology is still experimental and lacks in versatility, it’s a big NO to invest in such technology. 

Investing in BRC-20 at this stage would be like investing in a commodity with no proven utility and placing bets on a future that cannot be predicted.

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