After BRC-20, what is BRC-721?

2023-05-25 10:23

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Source: #BRC-721 (@real_BRC721)

BRC-20 is similar to ERC-20 on Ethereum, used for issuing homogeneous tokens, while BRC-721 is used for issuing non-homogeneous tokens (NFTs). The article explores the basic principles and advantages of these standards, as well as the differences from native Ordinals NFTs, and discusses the market prospects and challenges of BTC NFTs.

BRC-20 is what?

BRC-20 is an experimental format standard for issuing homogeneous tokens on the Bitcoin network, similar to ERC-20 on Ethereum.

Before understanding BRC-20, it is necessary to understand two concepts.

1. SATS: Satoshis, the smallest unit of Bitcoin. 1 BTC equals 100 million SATS.

2、Ordinals Protocol: A protocol for numbering each SATS.

Originally, the SATS of each unit were indistinguishable, but through the Ordinals protocol, these SATS can be arranged in a certain order and attached with specific information, making each originally homogeneous SATS into a unique NFT.

These pieces of information can be text, images, or code, and the information attached to SATS is called "Inscriptions".

It can be seen that the Ordinals protocol was originally designed to serve the issuance of NFTs on the Bitcoin network.

BRC-20 can be understood as a special type of Ordinals NFT. By setting the inscription to a unified JSON data format (text), it specifies Token information including the name, symbol, total amount, decimal places, etc. Developers can issue homogeneous Tokens by following the standard.

BRC-721 is what?

BRC-721 is an experimental standard for issuing non-fungible tokens (NFTs) on the Bitcoin network. It draws on the principles and concepts of BRC-20, and provides more functionality and flexibility by addressing the limitations of native Ordinals NFTs.

Using the BRC-721 standard, users can easily create, mint, transfer, and update unique digital assets suitable for a wide range of applications, including digital art, collectibles, and virtual goods. The standard defines a set of operations such as deployment, minting, transfer, and metadata updates, with each Token being assigned a unique identifier to ensure the uniqueness of each NFT, making it impossible to exchange one-to-one with other NFTs.

What is the difference between BRC-721 and native Ordinals NFTs?

1. Data Storage

Native Ordinals require each inscription to save an image, which can lead to high Mint costs and occupy a large amount of Bitcoin network space; while BRC-721 only needs to specify image and other information when deployed, and Mint operation does not need to save images, so it can greatly save Mint costs and Bitcoin network space;

BRC-721 can support saving images in chain-based services such as IPFS. This not only saves Bitcoin space, but also provides flexible attribute information for each token.

Native Ordinals NFTs cannot effectively index Collections, while BRC-721 enables effective indexing and searching of NFTs within the same Collection by providing a JSON specification similar to BRC-20.

2、BRC Protocol Compatibility

BRC-721 uses a protocol format similar to BRC-20, defining different functions through JSON content, greatly improving the flexibility of NFTs. For example, the Reveal function can be implemented through the Update operation, and the Tick field can effectively index the NFTs of a Collection.

3、NFT ecosystem compatibility

ERC-721 standard NFTs are more popular in the current market. The Token URI and Metadata specifications used by BRC-721 are consistent with ERC-721, making it easy to adapt to the existing NFT ecosystem. Additionally, native Ordinals do not support fields such as Traits, while BRC-721 can support defining NFT attributes and rarity information.

Therefore, compared to the native Ordinals NFT, using the BRC-721 protocol can achieve more complex functions, introduce external resources into Ordinals, have stronger scalability, richer application scenarios, and be more developer-friendly.

BTC NFT 的前景与挑战

translates to

The Prospects and Challenges of BTC NFT

in English.

The emergence of BTC NFT provides people with an opportunity to further explore the value diversity of Bitcoin. Through the Ordinals protocol, SATS can be transformed into unique NFTs, making the Bitcoin network more flexible and free.

However, to achieve the widespread adoption of BTC NFTs like Ethereum NFTs, there are still some challenges. One major issue is capacity limitations, with a maximum limit of 4MB for an Ordinals file, making it difficult to showcase some artwork on the Bitcoin network.

Additionally, native BTC NFTs are fully on-chain, which leads to very high storage costs. Currently, it may not be possible to achieve large-scale adoption and popularity.

However, the market prospects for BTC NFT are still very attractive. The introduction of the BRC-721 standard has brought more flexibility and scalability to BTC NFT. By storing the Metadata of NFT in IPFS or other off-chain services, it saves space on the Bitcoin network, reduces user costs, and provides more attribute information for each NFT, increasing the playability and application scenarios of BTC NFT.

I hope that over time, BTC NFT can be more widely adopted and contribute more possibilities and innovations to the development of the Bitcoin network.