BRC-20 and sUDT
With the continuous development of blockchain technology, various protocols and token standards are emerging. In recent years, the Bitcoin ecosystem has been unable to create a single token standard, until recently the BRC-20 token standard emerged and attracted widespread attention. So what exactly is BRC-20? How is it similar to Ethereum's ERC-20? Also, how does Nervos' sUDT reflect its unique strengths? This article will compare and analyze three token standards: BRC-20, ERC-20 and sUDT, hoping to bring you some inspiration.
BRC-20: A New Starting Point for the Bitcoin Ecosystem
Recently, the Bitcoin ecosystem has attracted a lot of attention, especially the debate about the homogeneous token protocol is out of control. Overnight, Bitcoin seems to have a homogeneous token agreement comparable to Ethereum ERC-20, so what exactly is BRC-20?
We explore this issue from the Ordinals protocol. At the beginning of this year, the small image Bitcoin (NFT) became popular, which is closely related to the Ordinals protocol.
The Ordinals protocol can assign each satoshi a unique identifier, in the order they were minted. This system was inspired by Bitcoin's 2021 Taproot upgrade, which allows Bitcoin users to attach some arbitrary data to each transaction in order to reduce the amount of data stored on the blockchain. Thanks to the Ordinals protocol, users can leave various forms of data (records such as text, images, etc.) in the satoshi, the smallest unit of bitcoin, enabling NFT digital art on the bitcoin chain. In March 2023, someone suggested that since NFTs can be created by recording different information through the smaller satoshi unit, if the same rules are formulated and the same information is recorded, wouldn't it be possible to create homogeneous NFTs on the Bitcoin network? brands; The prototype of the BRC-20 was created.
Since its launch, the BRC-20 token standard has attracted a lot of attention and interest.
Similarities and differences between BRC-20 and ERC-20
Although the names of BRC-20 and ERC-20 differ by only one letter, they are actually very different.
As we all know, ERC-20 is an agreement developed and improved over the years, as a token standard on the Ethereum blockchain, based on the Ethereum smart contract technology. Issuance, transfer and other functions of ERC-20 tokens are all done via smart contracts, enabling a one-click token issuance platform.
In contrast, BRC-20 cannot interact with smart contracts because it is essentially the smallest unit of Bitcoin. Because of this, BRC-20 naturally has a certain value, in stark contrast to the unlimited version of ERC-20.
Some people joke that BRC-20 is like exchanging a small amount of bitcoins for more bitcoins. However, the BRC-20 agreement is still in its infancy and different people may have different views on its future development direction. It is worth noting that the blockchain industry is constantly evolving and it is vital that we adapt and embrace new things, or we risk extinction.
Unique advantages of sUDT
sUDT is a token standard released by Nervos. The full name is user-defined simple token, which is a user-defined simple token. Using this template, developers can create and issue their own tokens on the Nervos layer-1 network.
As a modular blockchain network, Nervos adopts a layered architecture. The single-layer network adopts the PoW consensus mechanism, which is similar to Bitcoin's halving every four years (the first halving is expected to start in November this year). At the same time, the Nervos layer-1 network is known for its flexibility and interoperability. sUDT is characterized by full ownership of its assets. Using the tokens issued by the sUDT standard, users have absolute ownership and control of their assets. Without the user's consent, even everyone, including the creator of the token, cannot modify or understand the token, allowing the user to have full ownership of the digital asset. This also means that the authority of the user is better than the authority of the smart contract that manages it. Even if a loophole is discovered in the smart contract, the attacker will be blocked from the asset itself, which greatly improves security.
sUDT and BRC-20 are somewhat similar in that they both require native tokens that occupy a layer 1 network. When using sUDT, users must lock a certain amount of CKB, Nervos' native token.
BRC-20 is a formal standard based on regular numbers and inscription technology, which uses the security and stability of the Bitcoin network, but lacks the functionality and flexibility of smart contracts. ERC-20 is a standard based on smart contract technology. It has rich features and flexibility, but also faces high transaction costs and network congestion. sUDT is a standard based on smart contract technology that takes into account security and flexibility while ensuring full ownership of assets by users.