Bitcoin is the largest and most popular cryptocurrency in the world, but it also has some limitations. The base layer of Bitcoin can only handle simple transactions and cannot support complex smart contract computations, leading to a lack of innovation and development in the Bitcoin ecosystem.
However, some developers are trying to change this by creating new token standards on top of Bitcoin, allowing it to have more functionality and flexibility. One of the latest and most interesting attempts is the BRC-20 token, an experimental token standard that allows for the minting and transfer of fungible tokens on the Bitcoin blockchain using the Ordinals protocol.
The Ordinals protocol is a system for numbering satoshis that allows users to attach additional data to the satoshis, a process known as “inscription”. The BRC-20 token uses Ordinals to inscribe JSON (JavaScript Object Notation) data to deploy token contracts, mint and transfer tokens. Currently, the BRC-20 token standard allows for the creation of a BRC-20 token using the deploy function, the minting of a certain number of BRC-20 tokens using the mint function, and the transfer of a certain number of BRC-20 tokens using the transfer function.
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For this attempt to implement more functionality and flexibility on Bitcoin, Vitalik Buterin, co-founder of Ethereum, expressed appreciation and support in a tweet on July 7, 2023. Buterin believes that Ordinals and BRC-20 tokens are reviving Bitcoin’s “builder culture” and are a rejection of the “stagnation” politics in the Bitcoin ecosystem.
Buterin also has his own ideas about how Bitcoin can expand for future users. He believes that the best way is to focus on implementing different types of Layer-2 solutions while looking for ways to make the Bitcoin base layer more efficient. Layer-2 solutions refer to building additional layers on top of the Bitcoin base layer to improve transaction speed and reduce costs. Some Layer-2 solutions have already been developed and used, such as the Lightning Network.
In summary, Buterin has expressed affirmation and encouragement for Ordinals and the BRC-20 standard, believing that they are a manifestation of Bitcoin innovation and development. He also has his own suggestions for how Bitcoin can prepare for the future. His views may spark discussions and feedback from different factions within the Bitcoin community.
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