BRC-20 Tokens: A Guide to New Opportunities in the Bitcoin Ecosystem

Why Did BRC-20 Tokens Suddenly Explode in Popularity

At the beginning of 2023, the crypto market faced severe challenges, but in this environment, an unexpected winner emerged—BRC-20 tokens. These tokens built on the Bitcoin blockchain quickly became the market focus, breaking the traditional perception that Bitcoin is only used for payments.

Data speaks: By the end of 2023, over 55,000+ BRC-20 tokens had been created. During the peak in May this year, BRC-20 transaction volume on the Bitcoin network reached an astonishing 400,000 per day, with total transaction counts surpassing 40 million. The total market capitalization of the entire BRC-20 market has exceeded $451 million, with daily trading volume over $145 million.

What do these numbers reflect? They indicate the market’s desire for diversification within the Bitcoin ecosystem.

BRC-20 and Bitcoin Ordinals: Two Complementary Innovations

Many people tend to confuse BRC-20 tokens with Bitcoin Ordinals. In fact, they are two different directions in the field of Bitcoin tokenization:

BRC-20 Tokens: Used to represent fungible assets (like USDT, which can be exchanged)
Ordinals: Used to represent non-fungible assets (like unique artworks)

These two technologies jointly expand Bitcoin’s functional boundaries, moving beyond simple value transfer to open doors for DeFi, digital art, and asset tokenization.

What Bitcoin Ordinals Bring

Ordinals create unique digital assets similar to NFTs by numbering each smallest unit of Bitcoin (satoshi). Since its launch, this technology has generated over 45 million Ordinal inscriptions, and the Bitcoin NFT market trading volume has surpassed $200 million in just three months.

This demonstrates how strong the demand is for digital collectibles on Bitcoin, the “veteran public chain.”

7 Major Use Cases for BRC-20 Tokens

The versatility of BRC-20 opens up a world of possibilities for investors and builders:

1. Tokenization of Real Assets
Real estate, artworks, commodities can be converted into BRC-20 tokens, enabling liquidity and transfer on the Bitcoin network, improving asset divisibility and liquidity.

2. On-Chain Lending and Yield Farming
DeFi ecosystems are thriving on Bitcoin. BRC-20 tokens can be used in lending protocols, liquidity mining, and other financial activities, allowing Bitcoin holders to earn additional yields.

3. Gaming and Virtual Economies
Game developers can create in-game currencies and item systems with BRC-20, providing players with true on-chain ownership.

4. Identity and Credentials
Digital identity verification, educational credentials, and more can be implemented using BRC-20 standards, ensuring security and immutability.

5. Loyalty and Rewards Programs
Businesses can issue BRC-20 tokens as membership rewards or points, building blockchain-based loyalty systems.

6. Decentralized Governance
DAOs and decentralized communities can use BRC-20 tokens for voting and decision-making rights.

7. Cross-Chain Bridging
BRC-20 can serve as a value bridge between Bitcoin and other blockchains, promoting ecosystem interoperability.

How to Obtain BRC-20 Tokens

Now that you understand the potential of BRC-20, the next step is naturally to participate. There are mainly two ways to acquire BRC-20 tokens:

Method 1: Through Centralized Exchanges

Major exchanges have started listing BRC-20 tokens. Taking the three most popular tokens currently as examples:

ORDI (Ordinals) - Current price $4.16, 24h increase +2.69%, Market Cap $87.38M
SATS - Current price $0.00, 24h change -3.24%, Market Cap $31.88M

On exchanges supporting these tokens, you can directly purchase with USDT or other stablecoins, with a simple and quick process.

Method 2: Via Web3 Platforms and Self-Custody Wallets

If you want to acquire smaller tokens or BRC-20 tokens not listed on exchanges, Web3 platforms are a better choice:

Step 1: Prepare a BRC-20 compatible wallet, such as Ordinals Wallet, Unisat, or Xverse, ensuring compatibility with the Bitcoin network.

Step 2: Purchase Bitcoin as the base asset for transactions and fees. Currently, BTC is around $87.3K. Considering Bitcoin’s security, this is a necessary capital for participating in the BRC-20 ecosystem.

Step 3: Transfer BTC into your self-custody wallet.

Step 4: Connect your wallet to a Web3 trading platform that supports BRC-20.

Step 5: Select the desired BRC-20 token on the platform and place an order.

Step 6: After purchasing, store the tokens directly in your wallet. If the amount is large, consider transferring to a hardware wallet for further security.

This method involves more steps but gives you full control over your assets and more token options.

Risks to Know When Investing in BRC-20

BRC-20 tokens represent a new direction in the Bitcoin ecosystem but also come with higher risks:

• Market is still in early stages: Many tokens exist, but most have yet to find real use cases.
• Liquidity varies greatly: Different tokens have different trading depths; small tokens are prone to slippage.
• Regulatory uncertainty: Regulatory attitudes toward tokenized assets are still evolving in various regions.

Important Reminder: Before purchasing any BRC-20 tokens, conduct thorough research. Understand the project fundamentals, team background, and technical solutions. Avoid blindly chasing trends. If you are not familiar with this field, consult a professional financial advisor.

Summary

BRC-20 tokens, Ordinals, and Bitcoin NFTs mark a new era in the crypto asset space. Bitcoin is no longer just “digital gold” but a complete tokenization ecosystem. There are opportunities for investors, creators, and tech enthusiasts alike.

But opportunities always come with risks. When participating in this emerging ecosystem, maintaining rational judgment, managing risks, and continuous learning are key to success.