Uncovering the world of Bitcoin ordinals and BRC20 tokens

Abstract

In this chapter, we explore Bitcoin Ordinals and BRC20 tokens and attempt to enhance the understanding of this interesting area. We initially review the history of Non-Fungible Tokens (NFTs) from their early days as Colored Coins to the forms they have evolved into today. Then we discuss recent developments in the Bitcoin protocol, such as the Taproot upgrade and its impact on the development of Bitcoin Ordinals. The latter has the ability to embed digital formats into the smallest denomination of Bitcoin, called Satoshi. Bitcoin Ordinals signify Bitcoin's entrance into NFTs, digital art, and asset representation. This chapter explains various issues associated with Bitcoin Ordinals, such as their rarity before focusing on BRC-20 tokens. BRC-20 is a new method for creating fungible tokens on the Bitcoin network and was influenced by Ethereum's ERC-20 standard. The discussion carried out in this chapter contributes to the body of knowledge and provides a comprehensive understanding of these important developments.