Topic: What's the advantage of BRC20 compared to other Bitcoin token mechanisms? (Read 250 times)

That should be right. All BRC-20 operation (deploy, mint and transfer) require 2 transaction since all of them use witness data to store details of the operations.

Exactly. "The token transfer" is the inscription. There's nothing more. And if ETFBitcoin is right, you need 2 transactions to transfer the tokens ...

Due to BRC20's disadvantages, which may cause lots of people lose money soon, I've written a warning about BRC-20 in the newbie forum. (Any feedback and/or occasional bumps are appreciated.)

@nutildah: Wasn't aware of the Omni "rollback", thanks for posting that. Yep, I think also that Counterparty may be the superior protocol but I believed wrongly Omni had a bigger user base (although it's possible that if RGB catches on it may be the future gold standard due to its very efficient, lightning-friendly approach, just in April a new update was posted.).

Hardly anybody uses Omni outside of Tether, which has largely migrated elsewhere. Some years back Tether forced a fork so they could perform rollbacks if need be and Omni went along with it. Since then, its been terribly unpopular.

https://tether.to/en/tether-critical-announcement/

In terms of tx volume, Counterparty is by far the more popular tokenization protocol for BTC, and it will be once again after the Ordinals fad dies down.

Ordinals are dead and were flawed from the start: https://twitter.com/super_testnet/status/1654212346171064328 tell your friends.

In the original Ordinals, the inscription of the desired data (as in image, GIF, text message) was directly inserted into the transaction output.

Here, there's just metadata. And judging by what you just wrote about BRC-20, there doesn't appear to be any inscription of that kind at all, but rather, the transaction for a shitcoin.

Blockchain pruning will no doubt take care of that, but it's going to be an eye-opener for us to find solutions that prevent transaction speed from getting throttled.

Well, it seems that everybody is as clueless as I am why this format is so popular. odolvlobo is completely right that the witness discount doesn't compensate the overhead.

I also don't understand why so much data is needed for simply transfering tokens. In older token protocols, you only need the ID of the token and the amount and a very short identification string. Here you have the "p" and "op" parameters which look like they are occupying much more space than they should. Most other token protocols use less than 5 bytes for that "identification" of token and operation.

What do you mean with "the real inscription"? AFAIK the JSON data are describing a token issuance/transfer completely, and there's no other inscription they point at. The ord software (perhaps with a brc-20 extension) then takes care to assign token balances processing these JSON files, block by block. I guess you misunderstand something or please clarify

Hmm looks like it was me who was lacking to explain own words anyway, Sir I didn't mean that JSON metadata is real inscription I was trying to say that most of the time people don't care about the metadata inscription they just ignore it but it can be useful for the historians and analysts for particular purposes. From the metadata, the location of the source can also be obtained Im not sure about the case in BRC 20 standard because I don't have proper information about it.

Secondly the reason behind its popularity so in my view, there is no such strong reason, it's just hype. This standard is experimental and most of the hype for this standard is because of the meme coins as pepe.

With tiny size of JSON data, witness discount is negligible compared to various overhead to create an Ordinal inscription. By overhead, i mean 2 TX which usually has multiple input/output.

I might sound dumb for asking this but how is anyone supposed to get the real inscription from the JSON metadata?

Well, most people don't care about it (Meta-data) but still there can be the utility of the inscription for search purposes. As far as it's not storing the whole content. 

Of course they're not rendered as an image. Inscriptions can be any data format you want.

Am I the only one who doesn't understand how this is supposed to store an Ordinal in any way?

To me, it just looks like a (no offence) useless JSON file. I said useless because it is so small and doesn't appear to contain any useful data, let alone the contents of the inscription itself. So it makes me question why has this format become so popular, if image renderings of a JSON dictionary are the kinds of inscriptions you'll be showing to otbher people.

The problem with these things is that they do not need to exist, you need an alternate network to verify them. So by that logic said alternate network could simply inscribe its logic into a commitment to a hash of a Bitcoin transaction and achieve cheaper, less spammy/cloggy, and more practical utility from the base layer.

While witness data costs much less, a more efficient encoding in the witness data is still cheaper, so your point of using a more efficient encoding is still valid.

I'm a bit surprised by the success of the BRC-20 token protocol which is clogging the blockchain right now. BRC-20 seems to be a way to create and transfer fungible tokens storing a small JSON file in an Ordinal inscription.

That's how a BRC-20 inscription looks like:


Most readers of this subforum will know that there are already dozens of protocols allowing tokens on Bitcoin, the oldest probably being EPOBC (2012). Most are now based on data storage via OP_RETURN. The most popular - until BRC20 emerged - was were Omni (2013) and Counterparty (2014) which seem to be continuosly updated and improved. And there are advanced protocols with very efficient mechanisms like RGB and Taro (which can be used for much more things than tokens).

What I'm interested in is to know if BRC-20 has any advantage respect to the OP_RETURN based systems. Yes, a JSON file seems quite "elegant" or easy to create. But it's also terribly inefficient to store a dictionary of the needed data (i.e. token type, name, quantity of the transaction etc.) as a JSON text instead of storing only the values in an OP_RETURN string, for example using Protocol Buffers. It may not be a big advantage (a dozen or two of bytes, perhaps) but technically you'll still pay higher fees occupy more space with BRC-20 than even with the simplest OP_RETURN based approaches.

Someone knows if there's any advantage to use this method? My own interpretation is that it's simply popular "because Ordinals is popular". But is there more?

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PS: I've made a small correction and it may be already answering my question: It's possible that while you occupy more space on the blockchain with BRC20, the witness discount is enough to counter any real space efficiency advantage and thus leading to equal or even less fees.