After BRC-20, what is BRC-721?

Original source: #BRC-721; (@real_BRC;721;)

BRC-20 is similar to ERC-20 on Ethereum; it is used to issue homogeneous Token, while BRC-721 is used to issue non-homogeneous Token (NFT). The article explores the rationale, advantages, and differences from native Ordinals NFTs of these standards, and discusses the market prospects and challenges of BTC NFTs.

What is BRC-20?

BRC-20 is an experimental format standard for issuing homogeneous Tokens on the Bitcoin network, similar to ERC-20 on Ethereum;

Before understanding BRC-20, we must first understand two concepts.

1. SATS: Satoshi, the smallest unit on Bitcoin; 1 BTC is equal to 100 million SATS;

2. Ordinals protocol: a protocol for numbering each SATS.

Originally, the Satoshi SATS of each unit is indistinguishable, but through the Ordinals protocol, these SATS can be arranged in a certain order, and specific information can be attached to them, so that each original homogeneous SATS becomes a unique NFT .

These information can be text, pictures or codes, etc., and the information attached to SATS is called "Inscriptions".

It can be seen that the Ordinals protocol was originally used to issue NFT on the Bitcoin network.

BRC-20 can be understood as a special Ordinals NFT, which specifies Token information including Token name, symbol, total amount, decimal places, etc. by setting the inscription in a unified JSON data format (text), Developers can complete the issuance of homogeneous Tokens by following the standards.

What is BRC-721?

BRC-721 is an experimental standard for issuing non-homogeneous Token (NFT) on the Bitcoin network. It draws on the ideas and principles of BRC-20 and provides more functions and flexibility.

Using the BRC-721 standard, users can easily create, mint, transfer and update unique digital assets for a wide range of application scenarios, including digital art, collectibles and virtual goods, etc. The standard defines a series of operations, such as deploying, minting, transferring, and updating metadata, and each Token is given a unique identifier to ensure the uniqueness of each NFT so that it cannot be exchanged one-to-one with other NFTs.

How is BRC-721 different from native Ordinals NFT?

1. Data storage

Native Ordinals need to save pictures for each inscription, which will lead to problems such as high Mint fees and occupying a lot of Bitcoin network space; while BRC-721 only needs to specify pictures and other information when deploying, and Mint operations do not need to save pictures, so it can be greatly improved Save Mint fees and Bitcoin network space;

BRC-721 can support storing pictures in off-chain services such as IPFS, which not only saves Bitcoin space, but also provides flexible attribute information for each Token;

Native Ordinals NFT cannot be effectively indexed for Collection, and BRC-721 can effectively index and find the NFT of the same Collection by providing a JSON specification similar to BRC-20.

2. Compatibility of BRC protocol

BRC-721 adopts a protocol format similar to BRC-20, and defines different functions through JSON content, which greatly improves the flexibility of NFT. For example, the Reveal function can be realized through the Update operation; the NFT of a Collection can be effectively indexed through the Tick field.

3. Compatibility of NFT ecology

The NFT of the ERC-721 standard is more popular in the current market. The Token URI and Metadata specifications adopted by BRC-721 are consistent with ERC-721, and can be quickly adapted to the existing NFT ecosystem. At the same time, native Ordinals do not support fields such as Trait, while BRC-721 can support defining information such as NFT attributes and rarity.

Therefore, compared with the original Ordinals NFT, using the BRC-721 protocol can achieve more complex functions, introducing external resources into Ordinals, which has stronger scalability, richer application scenarios, and is more friendly to developers.

Prospects and challenges of BTC NFT

The emergence of BTC NFT provides people with the opportunity to further explore the value diversity of Bitcoin. Through the Ordinals protocol, SATS is transformed into a unique NFT, making the Bitcoin network more flexible and free.

However, there are still some challenges for BTC NFTs to achieve mass user adoption like Ethereum NFTs. A major issue is capacity limitations, with an Ordinals file having a maximum limit of 4;MB, which makes it difficult for some artworks to be displayed on the Bitcoin network.

In addition, the original BTC NFT is completely chained, which leads to very high storage costs, and it may not be able to achieve large-scale application and popularization at present.

However, the market prospect of BTC NFT is still very attractive, and the introduction of the BRC-721 standard brings more flexibility and scalability to BTC NFT. By saving the NFT's Metadata in IPFS or other off-chain services, it saves the space of the Bitcoin network, reduces the user's cost of use, and provides more attribute information for each NFT, increasing the playing methods and functions of BTC NFT. Application scenarios.

Hopefully, over time, BTC NFTs will gain wider adoption and contribute more possibilities and innovations to the growth of the Bitcoin network.