Recently, BRC20 tokens have been extremely popular, especially the ORDI project. Since its launch last March, the story has indeed attracted a lot of attention. I’ve noticed many discussions about this new narrative, so today I want to talk about what exactly BRC20 is and how ordinary people can participate.

First, the conclusion: BRC20 is indeed an interesting innovation, but currently most are speculative projects, so investing requires extra caution.

What is BRC20? Simply put, it is a standard for issuing fungible tokens on the Bitcoin network. In March last year, Twitter user @domodata created the BRC20 standard based on the Ordinal protocol, similar to Ethereum’s ERC20. But because Bitcoin does not support smart contracts, BRC20 is implemented by using the Ordinal protocol to set inscriptions as JSON data format.

So what is Ordinal? In simple terms, it is a system for numbering the smallest unit of Bitcoin, the satoshi. Originally, each satoshi was identical, but through the Ordinals protocol, each satoshi can be assigned a unique number and identity. Users can attach images, text, code, and other information to satoshis, turning them into Bitcoin NFTs. BRC20, then, is about attaching standardized JSON text data to satoshis, forming tradable fungible tokens.

Issuing BRC20 tokens involves three standard steps: Deploy, Mint, and Transfer. Developers can create and issue tokens following this standard. @domodata’s first experimental BRC20 token, ORDI, was created this way, with a total supply of 21 million. Early users could mint tokens simply by paying on-chain gas fees.

Regarding ORDI, some people did profit from early minting. For example, if someone minted 1,000 ORDI in early March, based on the latest price, that could be a significant gain. However, note that ORDI’s current price is $4.89, with a market cap of about $102.79 million, and there are 26,815 addresses holding it. These figures are constantly changing.

To participate in BRC20, first, you need to install the Unisat wallet and transfer BTC from an exchange to your Unisat address. For new tokens that haven’t been fully minted yet, users only need to pay gas fees to mint. But be aware that during periods of network congestion, actual gas fees are often higher than shown, as miners prioritize transactions with higher fees.

If you want to buy already minted BRC20 tokens, you can do so through Unisat’s trading marketplace or OTC trades. However, Unisat’s marketplace has a threshold: you need 20 Unisat points to access, and earning these 20 points requires minting 20 inscriptions, which at current gas prices costs roughly $160.

Currently, over 14,000 types of BRC20 tokens have been issued, with a total market value in the billions of dollars. Besides ORDI, most of the top tokens are meme coins, such as MEME, PEPE, PIZA, etc. These tokens are mainly speculative, with no real underlying value. Also, looking at the number of holder addresses, ORDI has just over 26,000 addresses, indicating that the BRC20 community remains quite small, and liquidity is generally poor.

Why does BRC20 attract so many people? Mainly because its issuance method is fair and transparent. All minting users are treated equally; project teams cannot reserve or mint additional tokens, and even the issuers must participate in minting from the start just like ordinary users. This indeed creates a relatively equal participation environment.

But there’s a problem: right now, BRC20 is just tokens without real use cases, and the future is still uncertain. Moreover, the influx of many BRC20 tokens has made the Bitcoin network more congested, which has also drawn opposition from the original Bitcoin community.

From another perspective, BRC20 has indeed brought new use cases to Bitcoin, attracting new users and developers, and increasing demand for Bitcoin. The biggest beneficiaries are miners, who have earned a lot of transaction fees due to the surge in BRC20 transactions.

Overall, BRC20 is a noteworthy new narrative, but investment must be very cautious. Most BRC20 tokens lack real value and practical applications, and liquidity is poor, making the risks quite high. If you want to participate, make sure to do your homework, control your risks, and never get carried away by the myth of quick riches.