What is Token ORC-20 ?

The ORC-20 token operates on the Bitcoin blockchain and is represented in JSON (JavaScript Object Notation) format, recorded on the Satoshi with ordinal serial numbers, similar to the BRC-20 token. Created after the BRC-20 standard, ORC-20 aims to address certain limitations of BRC-20 by improving security and enhancing flexibility.

The ORC-20 expands the scope of BRC-20 by supporting more data formats and leveraging the Unspent Transaction Output (UTXO) model of Bitcoin to avoid the issue of double spending, which is a significant concern for some BRC-20 tokens.

What is the ORC-20 standard?

The ORC-20 standard is an open standard designed to improve upon BRC-20 on the Bitcoin network. The goal of the ORC-20 standard is to maintain backward compatibility with BRC-20 while enhancing adaptability, scalability, and security.

BRC-20 is an experimental token standard that allows users to mint and transfer interchangeable tokens through the Ordinals protocol on the Bitcoin blockchain.

The ORC-20 improves upon the BRC-20 standard in the following ways:

1. Acceptance of Ordinals: The ORC-20 protocol is built on Ordinals and the BRC-20 token standard. Its main goal is to promote the acceptance of Ordinals, which are digital works capable of carrying various types of data on the Bitcoin network. This allows users to deploy new ORC-20 tokens and move existing BRC-20 tokens.

2. Overcoming Limitations: The current limitations of the BRC-20 standard, such as double spending and restricted naming space, have created a need for improvement. The ORC-20 protocol introduces several upgrades, such as UTXO and flexible naming space, to address these limitations.

BRC-20 is an experimental token standard on the Bitcoin blockchain named after Ethereum’s ERC-20. It allows developers to create and transfer interchangeable tokens through the Ordinals protocol. BRC-20 has gained popularity in the cryptocurrency ecosystem, particularly after the rapid advancements of various memecoins like Pepe (PEPE) in May 2023.

ORC-20 prevents double spending through its transaction model based on the UTXO (Unspent Transaction Output) model of Bitcoin. When transferring funds, the sender specifies the amount that the recipient will receive and designates the remaining balance to be sent back to themselves, simplifying the transaction process.

In the UTXO model, the previously recorded balance becomes invalid after each transaction is completed, adhering to the UTXO principle. Each “send” event of an ORC-20 token can include a nonce. This allows the sender to include a unique identifier for the transaction, which can be used to cancel a portion of the transaction if needed. By specifying the nonce, the sender can undo and reverse partially processed transactions.

Risks of Token ORC-20 

Those who intend to invest in ORC-20 tokens should first understand that ORC-20 is an experimental project, and there is no guarantee of value or usefulness of tokens produced under this standard. Although ORC-20 has the potential to improve token standards on the Bitcoin network, it has received criticism for being complex and not providing significant advantages compared to existing standards.

The fate of ORC-20 depends on the community’s reaction and its ability to address these concerns. Users should be cautious and conduct thorough research before interacting with ORC-20.”