What is BRC-20 tokens and how they works?

[Learn Bitcoin]

Hey everyone!
We all know there is a massive spike in transaction fees, and you probably know when and why it's started. Taproot development on the bitcoin network allowed developers to create tokens and release them on the Bitcoin network which have been identified as BRC-20 tokens. BRC-20 token developers mint their tokens on the network but they are using the same Bitcoin network. Bitcoin mempool has been congested for a couple of months now due to these massive transactions. Even though I am not a coder or developer, I would love to know more about how these things work. Why they are doing these massive spam transactions? Sometimes I feel like why those stupid weirdos spending 30K sat to send 1K sats? Does it make sense?

[Faisal2202]

Hey everyone!
We all know there is a massive spike in transaction fees, and you probably know when and why it's started. Taproot development on the bitcoin network allowed developers to create tokens and release them on the Bitcoin network which have been identified as BRC-20 tokens. BRC-20 token developers mint their tokens on the network but they are using the same Bitcoin network. Bitcoin mempool has been congested for a couple of months now due to these massive transactions. Even though I am not a coder or developer, I would love to know more about how these things work. Why they are doing these massive spam transactions? Sometimes I feel like why those stupid weirdos spending 30K sat to send 1K sats? Does it make sense?

I am quite shocked to see this question after that long because we already had discussed this issue on BTT so many times but hey here we go again, when all this started for the first time I created a topic on BTT, and due to Ordinals, the fee touches the all-time high of $32 per TX. I prefer you to read that thread of mine if you don't mind.

• Why BTC Transactions Fees are Skyrocketing?

In this thread, I mention the reason which caused the creation of these new shit tokens, and that was not due to the taproot upgrade, instead, it was due to a bug in ordinals To know more about Ordinals I prefer you should read this:

• https://chain.link/education-hub/ordinals-bitcoin-nfts

According to the latest update of V27, developers has stated that, in near future we won't see any new inscription of token as this update will unable this feature of creating BRC-20 Tokens. (source)

[Learn Bitcoin]

I am quite shocked to see this question after that long because we already had discussed this issue on BTT

You should not be shocked. Either I missed your thread, or I didn't pay too much attention because there are a lot of spammy threads every day and people are focusing on their signature requirements. Sometimes I do not check the Bitcoin discussion section for a while and I participate in a discussion that I have already commented on before.

In this thread, I mention the reason which caused the creation of these new shit tokens, and that was not due to the taproot upgrade, instead, it was due to a bug in ordinals To know more about Ordinals I prefer you should read this:

• https://chain.link/education-hub/ordinals-bitcoin-nfts

According to the latest update of V27, developers has stated that, in near future we won't see any new inscription of token as this update will unable this feature of creating BRC-20 Tokens. (source)

Thanks for the info. That was useful. I have read both articles and it's nice to know in detail. I am glad to know that devs also thinking to stop this shit. If they want to do such bullshit inscription, they should use a different blockchain like BSC or other cheap chains. These shit developer ruining Bitcoiners life. Only miners are profitable at this moment.

[examplens]

I am quite shocked to see this question after that long because we already had discussed this issue on BTT

You should not be shocked. Either I missed your thread, or I didn't pay too much attention because there are a lot of spammy threads every day and people are focusing on their signature requirements. Sometimes I do not check the Bitcoin discussion section for a while and I participate in a discussion that I have already commented on before.

It is entirely possible that there are users here who do not visit Bitcointalk or find this forum more user-friendly and find it easier to navigate here than on BTT. So this discussion may have some sympathetic answers. Especially if we know that users here are more in favor of altcoins, and I would guess that Ordinals are some kind of that, right?

Here's an example, I'm still looking for the right answer, what exactly gives value to ordinals? Why does someone pay huge sums for a pixelated image, which a skilled designer can make in 5 minutes?

[jeraldskie11]

In other words, BRC20 tokens are the cryptocurrencies that use the Bitcoin blockchain.

They are the same as erc20 tokens that use the Ethereum blockchain. They are called tokens because they do not have their own blockchain.

They will be only called coins if they create their own blockchain.

[ABCbits]

Taproot development on the bitcoin network allowed developers to create tokens and release them on the Bitcoin network which have been identified as BRC-20 tokens.

That's not true. BRC-20 which created with Ordinals use witness data which have 10000 bytes for SegWit and no bytes limit for Taproot[1]. And before SegWit exist, USDT token already exist on Bitcoin.

BRC-20 token developers mint their tokens on the network but they are using the same Bitcoin network.

Actually anyone with wallet which support BRC-20 and willing to pay some TX fee can mint BRC-20 based token, even when they're not the one who deploy that[2].

[1] https://github.com/bitcoin/bips/blob/master/bip-0342.mediawiki#resource-limits
[2] https://www.xverse.app/blog/how-to-mint-brc-20-tokens under section "How Does Minting BRC-20 Tokens Work?".

[Aanuoluwatofunmi]

Sometimes I feel like why those stupid weirdos spending 30K sat to send 1K sats? Does it make sense?

Don't you think they have their own plan and target which they are running after and not minding the cost towards the fulfilment of what they are running after, on a normal reasoning, no one could have done such, paying more than what you're sending, but when there's hidden agenda attached, thing like this happens, we will have to keep and eye on the whole show to see what gets unfold next with them and their tokens, just that many would have been massively affected using the bitcoin network as bitcoiners.

[Gurujebs]

Hey everyone!
We all know there is a massive spike in transaction fees, and you probably know when and why it's started. Taproot development on the bitcoin network allowed developers to create tokens and release them on the Bitcoin network which have been identified as BRC-20 tokens. BRC-20 token developers mint their tokens on the network but they are using the same Bitcoin network. Bitcoin mempool has been congested for a couple of months now due to these massive transactions. Even though I am not a coder or developer, I would love to know more about how these things work. Why they are doing these massive spam transactions? Sometimes I feel like why those stupid weirdos spending 30K sat to send 1K sats? Does it make sense?

I'm not a developer but logically, I know how this works. BRC20 tokens also known as ordinals are inscription made on each sats of transactions and this inscription is unique from one another making it look like NFTs that we have on other networks. This inscription are made on each meta of bitcoin and this is possible because the developers are intentionally allowed it to be so. When people make this metadata transactions, it makes the transaction weight to be heavy and hence they need high sats to make it go through the mempool without having to wait for long.

Now this BRC20 tokens are high in demand and there is profit because of the intense trend and fear of missing out, so they pay high transaction to make it quick for the transaction to be included in the next block which is affecting other typical transaction on the bitcoin network.

This looks like an attack but since the developers allowed it to be exploited by people that like it, they let it be because the miners of course are been compensated with high fees but I don't see the use since bitcoin price is high enough for them for profit.

[Nheer]

I am quite shocked to see this question after that long because we already had discussed this issue on BTT so many times but hey here we go again, when all this started for the first time I created a topic on BTT, and due to Ordinals, the fee touches the all-time high of $32 per TX. I prefer you to read that thread of mine if you don't mind.

• Why BTC Transactions Fees are Skyrocketing?

In this thread, I mention the reason which caused the creation of these new shit tokens, and that was not due to the taproot upgrade, instead, it was due to a bug in ordinals To know more about Ordinals I prefer you should read this:

• https://chain.link/education-hub/ordinals-bitcoin-nfts

According to the latest update of V27, developers has stated that, in near future we won't see any new inscription of token as this update will unable this feature of creating BRC-20 Tokens. (source)

I also missed your thread in Btt and due to one or two reasons and like OP mentioned there are more spam threads there than the usual that makes people miss some important threads but visiting this forum have educated me more about the cause of high transaction fees and Ordinals by reading your post that directed me to the other forum to read your post.

You mentioned that the creation of the BRC20 token was due to a bug in the ordinals, does that mean that we should worry about bitcoin is such can happen and challenge its existence?

I hope they are working towards a possible solution to eliminate the bug in the Ordinal and also eliminate all the tokens created on the bitcoin network because if nothing is done sooner some other developers might create more tokens in the network which will lead to more congestion in the mempool.

[Hamza2424]

We all know there is a massive spike in transaction fees, and you probably know when and why it's started. Taproot development on the bitcoin network allowed developers to create tokens and release them on the Bitcoin network which have been identified as BRC-20 tokens. BRC-20 token developers mint their tokens on the network but they are using the same Bitcoin network. Bitcoin mempool has been congested for a couple of months now due to these massive transactions. Even though I am not a coder or developer, I would love to know more about how these things work. Why they are doing these massive spam transactions? Sometimes I feel like why those stupid weirdos spending 30K sat to send 1K sats? Does it make sense?

BRC-20 tokens are those tokens which are based on BTC blockchain, they are actually not tokens but mostly behave as NFTs because we can't list token on BTC blockchain like we can list on Ethereum blockchain or any other blockchain that allows us. A person by the name of lightning I think (don't know the name for sure) was poking around with ordinals theory.

And he found a bug, which made him able to inscribe any data, into the BC blockchain, the data could be of an image, video, text, media etc. This data then becomes a part of BTC blockchain. This inscription method became famous as it helped people to earn millions of dollars in no time. More and more people started to inscribe BTC which result in high congestion and more fee. Now, in my opinion, authorities are the ones who are dusting the BTC blockchain, because they want BTC to give a bad fame.

[ABCbits]

This inscription are made on each meta of bitcoin and this is possible because the developers are intentionally allowed it to be so.

I don't think developer intentionally allow it. IMO it's more accurate to say developer didn't expect people would try creating token on Bitcoin again since old token (such as USDT) on Bitcoin isn't popular.

[Learn Bitcoin]

Now, in my opinion, authorities are the ones who are dusting the BTC blockchain, because they want BTC to give a bad fame.

No. I don't think it's the authority who is doing that. It is the people who are minting tokens in the Bitcoin network. A few days ago I noticed some unusual fee bumping and posted it on Bitcointalk, and then Nutildah came up with a response that shows those transactions were made by a few users who were minting their tokens.

Several platforms released tokens using BRC-20 and a lot of start up planning to launch their token on this network. One of the project is Farcana game which will release their token $FAR soon and it will be on BRC-20 network. They have created a huge hype already.

[Hamza2424]

No. I don't think it's the authority who is doing that. It is the people who are minting tokens in the Bitcoin network. A few days ago I noticed some unusual fee bumping and posted it on Bitcointalk, and then Nutildah came up with a response that shows those transactions were made by a few users who were minting their tokens.

Several platforms released tokens using BRC-20 and a lot of start up planning to launch their token on this network. One of the project is Farcana game which will release their token $FAR soon and it will be on BRC-20 network. They have created a huge hype already.

You are right, I can't disagree with you because users are minting new BRC-20 tokens in the hope of making thousands, because past experiences of those who adopted BRC-20 tokens motivates them as they also made thousands of dollars. I did not had clear idea about Farcana token that its a BRC-20. I did heard about it and tried to join its campaign which I think is going to end in 48 hours.

Government alone can't dust the network, users minting tokens, making transactions of these tokens, even miners can be involved in this because the most of the benefit of this congestion is to miners only. I just shared my opinion that government might be causing this dust too because they don't like BTC as they have to allow its ETF according to the rule book of USA.

[joniboini]

Government alone can't dust the network, users minting tokens, making transactions of these tokens, even miners can be involved in this because the most of the benefit of this congestion is to miners only. I just shared my opinion that government might be causing this dust too because they don't like BTC as they have to allow its ETF according to the rule book of USA.

Is there any reason for them to do that though? Let's say they don't like BTC and want it dead, why would they approve ETF since they can simply cite manipulation, etc as a reason for the rejection? Is there any law preventing them do this? Wouldn't it be easier and faster to just reject and try to control the market if that was the case instead of spending time making dust transactions? If they truly want to do that, I'm sure they can spend a hundred million or so to hire or run a bot to spam the network easily. It sounds counterintuitive considering how many times the media calls BTC is related to crime etc if they opt to spam the network and BRC20 just to annoy people imo.

[Learn Bitcoin]

Government alone can't dust the network, users minting tokens, making transactions of these tokens, even miners can be involved in this because the most of the benefit of this congestion is to miners only. I just shared my opinion that government might be causing this dust too because they don't like BTC as they have to allow its ETF according to the rule book of USA.

I don't think the Government is involved in something like that. There was a time when the government tried to limit Bitcoin in many ways, but they were unable to do anything. Once they understood that they could not stop Bitcoin, they started to adopt it as well. If you talk about banks, some banks still consider crypto users like criminals. Some of them accept Bitcoin, yet they treat their customers like they are criminals. There will be a time when all of them will try to collaborate with Bitcoiners. About dust transactions, some stupid miners could do it. But, I am not sure. But the fact we all know is, these massive congestion is happened because of the Ordinals.