What Are BRC-20 Tokens and How Do They Work?

Have you ever heard of BRC-20 tokens? Some would say it's a revolutionary vision for the future of Bitcoin blockchain. But is that so? In this article we’ll guide you through everything you need to know, from what they are and how they work to the most popular ones today. Let's dive in!

What Are BRC-20 Tokens?

BRC-20 is a token standard created in early 2023 to expand Bitcoin’s capabilities beyond simple payments and to make it possible to build a small ecosystem of tokens directly on its network. Basically, it's a way to create and move new coins within the Bitcoin network.

Unlike other token standards, BRC-20 works differently. The process is quite simple: a regular Bitcoin can be split into little parts called Satoshi. The developers created a way to “attach” short text entries (Ordinals) to these Satoshis — for example: “This is a token called HIRO; there are only 21,000,000 of them.” Such a description is stored directly on Bitcoin's blockchain, creating a unique separate token.

That is, Bitcoin's blockchain is a storage of the entries, and the BRC-20 standard is the rules on how to make and read those entries. And all of it works on top of Bitcoin, without a separate network or smart-contracts. So, BRC-20 tokens are non-fungible tokens on the Bitcoin blockchain created and operating using Ordinals inscriptions.

Characteristics of BRC-20 Tokens

Now let's look into the main characteristics of BRC-20 tokens to understand why they exist and how you can use them.

So, BRC-20 tokens are:

1. Based on the Bitcoin network. BRC-20 tokens inherit the reliability and security of Bitcoin itself. It doesn’t only strengthen their tech backing but also ups users’ confidence as the first ever crypto keeps its steady trustworthy position.

2. Highly secure. Since everything is stored on the Bitcoin blockchain, BRC-20 tokens are impossible to fake or delete. They are protected by the same hashrate and network as regular Bitcoin.

3. Backed by the Ordinals protocol. This allows you to attach data to the Satoshis. BRC-20 writes text information (in JSON format) onto those little Bitcoin particles through Ordinals protocol, and this is how tokens are created or transferred.

4. Easy to understand. Everything is done through three simple operations: deploy (creating a new token: setting a name, limit, etc.) mint (release of a certain number of tokens) and transfer (transfer of tokens between users). All this information is written into a Bitcoin transaction in the form of short text.

However, as of now BRC-20 tokens remain an experiment. The standard has not yet been fully established, so there are few tools and supporting services. Because of this, transactions are still inconvenient and can be expensive. Moreover, to interact with BRC-20, you need special wallets that support Ordinals: regular Bitcoin wallets don’t “see” them. And due to the BRC-20’s very simple mechanism with no programmable functions, they cannot automatically perform actions like Ethereum tokens, which support smart contracts.

Pros and Cons of BRC-20 Tokens

For your comfort, we've prepared a handy table describing advantages and disadvantages of BRC-20 tokens.

Most Popular BRC-20 Tokens

Now, let’s look at the real cases of using the BRC-20 standard. Below we’ll describe the top 5 most popular tokens so you can decide whether you want to invest in them or not.

1. ORDI

ORDI is the first and most famous BRC-20 token, created in March 2023 by a developer under the name of Domo. It was ORDI that proved that it’s possible to create your own tokens on the Bitcoin blockchain without smart contracts. It pioneered a whole new direction and remains a benchmark for all following BRC-20 projects. Thanks to this, ORDI is now considered a symbol of a new stage in the development of the Bitcoin ecosystem and may be the most stable entry point into this new market.

2. SATS (1000SATS)

SATS is a token inspired by a minimal Bitcoin particle, Satoshi. It was created to show that it's possible to build simple tokenomics directly on the Bitcoin blockchain using only Ordinals inscriptions without smart contracts. SATS offers a way to participate in a project that directly reflects Bitcoin’s spirit of decentralization and scarcity. Its popularity and active trading volume make it an appealing choice for those who want exposure to the growing BRC-20 sector while staying close to Bitcoin’s fundamentals.

3. trac (Ordinals)

trac (Ordinals) is an infrastructure project within the Bitcoin Ordinals ecosystem that aims to decentralize how Ordinals-based protocols — such as BRC-20 tokens and sats domain names — are tracked and accessed. Created in May 2023 by developer BennyTheDev and managed by Trac Systems, the project represents an early opportunity to back a project that’s not just another meme or speculative token — but a genuine infrastructure layer aiming to make Bitcoin’s Ordinals and BRC-20 ecosystem more functional, transparent, and interconnected.

4. rats (Ordinals)

rats (Ordinals) is a meme-inspired token built within the Bitcoin Ordinals ecosystem — one of many community-driven experiments taking advantage of the BRC-20 standard. While its price and trading volume have been volatile, the project highlights the social and speculative side of Bitcoin-based tokens. It represents a highly speculative asset that reflects the meme-driven energy often seen in early crypto trends.

5. LeverFi (LEVER)

LeverFi (LEVER) is a DeFi ecosystem that brings advanced financial tools to the Bitcoin network through its BRC-20 integration. At the center of this system is LeverPro, a dedicated launchpad for BRC-20 projects that helps new Bitcoin-based tokens and protocols — including those for stablecoins, lending, and automated market makers (AMMs) — enter the market. The platform also operates LeverTrade, a decentralized exchange that offers leveraged trading with up to 10× leverage. So, LeverFi represents a bridge between Bitcoin and DeFi — an opportunity to gain exposure to the growing BRC-20 ecosystem while accessing real financial use cases like lending, trading, and yield generation within Bitcoin’s trusted environment.

So, are BRC-20 tokens a revolutionary vision for the old and trusty Bitcoin network? In many ways — yes. They show that even the world’s first crypto can evolve, opening the door to token creation, experimentation, and innovation directly on Bitcoin’s blockchain. While the technology is still young and imperfect, BRC-20 tokens prove that Bitcoin is no longer just digital gold — it’s becoming a foundation for a new wave of decentralized possibilities built on its legendary security and trust.

What do you think of it? Do you agree that the BRC-20 standard is the future for the Bitcoin network? Why and why not? Let’s chat in the comments below!