BRC-20 wallet

Tokens in the BRC-20 token standard use Ordinal inscriptions of JSON (JavaScript Object Notation) data to deploy token contracts, mint tokens, and facilitate token transfers.

The Ordinals protocol is used to number satoshis and allows users to associate additional data with these satoshis, a process known as “Ordinal inscriptions.” To be more specific, Sats are given a “serial number” based on the order in which they are mined on the Bitcoin blockchain. This gives each Satoshi an ordinal number, which is also how the protocol got its name.

In short, the ordinals protocol simplified the process of attaching additional data (such as text, images, or audio) to a single Satoshi, a process known as inscription. Simply satoshis inscribed with information. BRC-20 tokens are exactly that: a type of ordinals Inscription.

First and foremost, ERC-20 tokens are found on the Ethereum blockchain, whereas BRC-20 tokens are inherent to the Bitcoin network.

In addition, the functionality of BRC-20 coins is limited because they do not use smart contracts. On the other hand, ERC-20 tokens can communicate with many protocols and applications, enabling a wide range of functions, such as borrowing and lending.

Lastly, ERC-20 surpasses BRC-20 in terms of maturity. ERC-20 tokens were created in 2015 and gained official recognition in 2017, demonstrating their durability and usefulness in cryptocurrency. BRC-20 tokens, on the other hand, are new to the market and their future is still unknown. We will have to wait and watch how they change over time.

ERC-20 tokens on the Ethereum network inspire the concept of BRC-20 but come with unique mechanics and functions.

This innovative BRC-20 standard enables users to create and exchange fungible tokens on the Bitcoin network.

The Bitcoin network allows users to transfer BRC-20 tokens to one another. To transfer BRC-20 tokens, the sender must specify the recipient’s address and the number of tokens to be transferred, and sign the transaction. The tokens can then be redeemed by the receiver using their wallet.

However, it is critical to note that transferring your ordinals carries a risk of loss, and only experienced users with knowledge of UTXO management should attempt it. It’s best to avoid transferring your ordinals if you’re not confident in managing UTXOs.

Not all Bitcoin wallets support BRC-20 tokens. The wallet needs to have the functionality to display the Ordinals scripts.

With a Ledger crypto wallet, you can store BRC-20 tokens.

Sending ordinals with Ledger Live is not supported for the moment. Instead, please connect your Ledger account to Sparrow Wallet to manage your ordinals.

The BRC-20 token standard was developed as a “fun experimental standard” to show that digital tokens might be minted on Bitcoin, however, it is still in its early stages of development. To put it another way, investing in BRC-20 tokens is very risky, so be sure to do research before committing to buy any BRC-20 tokens.

Finally, the user’s wallet security and how they manage private keys have a major impact on the security of BRC-20 tokens. BRC-20 tokens are safe if the user follows the recommended practices for key management and the wallet is secure.

When you first buy coin, you’re issued with two keys: public and private.

• A public key serves as an address that can be shared with other parties to perform transactions.
• A private key represents a randomly generated number that signs transactions and protects your assets from malicious attacks. If it gets compromised or lost, you won’t be able to access your cold wallet to spend, withdraw, or transfer your coins.

To safeguard and keep track of your keys, you can use online or offline wallets. Online wallets, also known as hot wallets, store private keys on systems or devices that are connected to the internet. Hot wallets are easy and convenient to use, however, they come with several drawbacks. Besides being susceptible to attacks and a honeypot for hackers, with hot wallets, the custody of private keys is often entrusted to a third party such as a crypto exchange, which means you never have full control over your funds. The safer choice is specialized hardware wallets that store private keys offline. Stealing private keys from a hardware wallet would require physical access to the wallet and the corresponding PIN or the recovery phrase. What’s more, with a hardware wallet, you don’t need to rely on third-party custodians.

Ledger Nano is the industry-leading hardware wallet. With more than five million customers, Ledger Nano wallets have several layers of security that protect private keys, and hence your assets:

• Your private keys are stored on secure element chips.
• A PIN code and a 24-word recovery phrase are required to access the wallet.
• Ledger Nano cryptocurrency wallets have been built using highly durable materials for protection against physical damage.

With full isolation between private keys and your computer/mobile, Ledger Nano cold wallets keep your keys secure and give you complete control over your cryptos.