What are BRC20 tokens?

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The BRC-20, which is often referred to as a “token standard,” is a type of fungible token. It’s developed using Ordinals and Inscriptions and is stored on the Bitcoin base chain. This standard enables the deployment of token contracts, the minting of tokens, and the transfer of tokens via Ordinal inscriptions of JSON data.

Contrary to what the term “token standard” might suggest, especially in the context of EVM chains where smart contracts manage the token standard and its various rules, BRC-20 is essentially a method of storing a script file in Bitcoin. This file attributes tokens to satoshis and facilitates their movement between users.

Lately, there has been a surge in demand for BRC-20 tokens, leading to a rise in transaction costs due to increased token activity. This heightened activity, coupled with the growing popularity of BRC-20 tokens, has resulted in congestion on the Bitcoin chain.

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