# BRC-20 Explained

### What is a BRC-20 ?  

BRC-20 is modeled after Ethereum’s ERC-20 token standard and was proposed in Bitcoin Request for Comment 20 by Anonymous developer Domo in March 2023. The BRC-20 is a token standard that uses ordinal inscriptions to enable the minting and transfer facilities of fungible tokens on the Bitcoin blockchain. The process is varies significantly to the ERC-20 standard. The ERC-20 standard utilises smart contracts where as the BRC-20 utilises the inscription method.

The BRC-21 Proposal aims to enable minting and redeeming fully decentralized, cross-chain BRC-20 tokens on Bitcoin. It would allow tokens created on other blockchains like Ethereum and Polkadot to be minted on Bitcoin.

<figure><img src="https://2072194108-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FSetxD2MaUHMOgl5BoiDk%2Fuploads%2FURTs8RqwfMQgSzsNKhPz%2Fcb519cc778db597cfa9013c35a2eb51e.jpg?alt=media&#x26;token=5202ce9e-578e-44cf-8e3c-fe2688532f6d" alt=""><figcaption><p>Process for BRC-20</p></figcaption></figure>

### What are Ordinals ? &#x20;

The Ordinal protocol is a way for users to inscribe data such as text, images, videos, and smart contracts directly on the Bitcoin blockchain. This data is then inscribed in satoshis on the bitcoin network. To put it simply, each ordinal is simply a satoshi that has been assigned a unique number, i.e. TokenID. This is how we could utilise the BRC-20 protocol to launch projects.\
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This makes Ordinals not limited to just art or NFT's but also could be used to inscribe tokens aswell. The way this is conducted is by minting the token under a pack and then being able to unrwap it to give you the token. \
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Nearly anything can be minted on Bitcoin with Ordinals inscription and new kinds of cross-chain transactions are being conceptualized. It will also be a huge benefit if high non-fungible and fungible BRC-20 transaction volumes force scalability solutions.


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