What is a BRC-20 token and how does it work?

BRC-20 is a way to create fungible tokens on Bitcoin, the network that was never designed to hold them. Binance Academy calls it an experimental token standard, created in March 2023 by a developer known as Domo. It sits on top of Ordinals, which lets data be attached to individual satoshis, explained in our guide to Bitcoin Ordinals and Runes.

What is a BRC-20 token, and how does it work?

A BRC-20 token exists as a series of text inscriptions on Bitcoin. Each one is a small piece of JSON, a simple data format, that says what action to take. According to the indexer rules published by Best in Slot, there are three operations:

• Deploy. Sets up a new ticker, its total supply and how many tokens each mint can create. Only the first deploy of a ticker counts.
• Mint. Creates tokens under those limits, in order, until the supply cap is reached.
• Transfer. Moves tokens from one holder to another.

Bitcoin nodes do not read any of this. They just see a normal transaction carrying some data. Software called an indexer scans every inscription, applies the rules and keeps a running ledger of balances. Binance Academy notes that if indexers disagree, they can show different balances for the same wallet.

How do you send a BRC-20 token?

Transfers take two steps. First you inscribe a transfer note for an amount up to your available balance. Then you send that inscription to the recipient, and the indexer moves the balance across. Once sent, the transfer inscription is used up.

Each step is a Bitcoin transaction with its own fee. Binance Academy notes that minting needs a wallet that can handle Ordinals properly, and that a wave of BRC-20 activity in May 2023 helped push Bitcoin fees to a two-year high.

What is the difference between BRC-20 vs ERC-20?

An ERC-20 token is a smart contract on Ethereum. Its specification, EIP-20, defines functions such as transfer and balanceOf, and the network itself enforces every balance.

BRC-20 has no smart contract behind it. The main differences:

• Who keeps balances. Ethereum nodes for ERC-20, offchain indexers for BRC-20.
• Programmability. ERC-20 tokens plug into DeFi apps. Classic BRC-20 tokens can only be deployed, minted and transferred.
• Ticker rules. The Best in Slot rules require a 4-byte ticker for standard BRC-20 tokens, and the first deploy of a name wins.

Has BRC-20 changed since launch?

Yes. Decrypt reported that an upgrade called BRC2.0 went live at Bitcoin block 912,690 on September 1, 2025, adding Ethereum Virtual Machine support to the BRC-20 indexer so developers can deploy smart contracts. It was developed by Best in Slot with Domo and the Layer 1 Foundation. This changed the indexer, not Bitcoin's own rules.

Binance Academy counted more than 244,000 BRC-20 tokens by early 2024, most with no established use. Runes, launched in 2024, offers another way to issue tokens on Bitcoin.

Crypto prices are volatile and a token can lose most of its value.