Bitcoin's blockchain has evolved beyond simple transactions, introducing groundbreaking applications like ARC-20 and Atomicals. These protocols redefine asset management and tokenization on Bitcoin, leveraging its security and decentralization. Below, we explore their functionalities,铸造 processes, and comparisons with existing standards like Ordinals.
Understanding ARC-20: Bitcoin’s Homogeneous Token Standard
What is ARC-20?
ARC-20 is a fungible token standard on Bitcoin’s blockchain, where each token is backed by a satoshi (BTC’s smallest unit). This ensures:
- Inherent value: 1 ARC-20 token = 1 satoshi.
- Compatibility: Seamless integration with Bitcoin wallets (e.g., Sparrow Wallet).
- Flexibility: Tokens can be split/merged like BTC.
Key Features
- Digital Gold Appeal: Satoshi-backing provides stability.
- Decentralized/Direct Minting: Two铸造 options (detailed later).
- Unique Numbering: Global naming system to prevent duplicates.
👉 Explore how ARC-20 enhances Bitcoin’s utility
How ARC-20 Tokens Work: The铸造 Process
Backed by Satoshis
Each ARC-20 token derives value from a satoshi, ensuring minimum value security and transparency.
Minting Methods
Decentralized Minting
- Customizable: Set parameters (rewards, total supply, block height).
- Command:
npm run cli init-dft metadata.json. - Use Case: Gradual distribution (e.g., community rewards).
Direct Minting
- One-Step Process: Create total supply in one output.
- Security: Requires BTC collateral to prevent fraud.
- Command:
npm run cli mint-ft metadata.json. - Use Case: Full control (e.g., corporate token issuance).
Decentralized ARC-20 Minting: Step-by-Step
Stage 1: Initialization
- Setup: Define ticker, rewards, supply, and metadata.
- CLI Command:
npm run cli init-dft metadata.json. - Flags: Optional (e.g.,
--satsbyte=for fees). - Metadata: Add descriptions/images for clarity.
Stage 2: Minting
- Execute:
npm run cli mint-dft. - Block Height: Starts at predefined
start_height.
Ordinals vs. Atomics: Key Differences
| Feature | Ordinals | Atomics (ARC-20) |
|---|---|---|
| Purpose | NFTs (inscriptions on satoshis) | Fungible tokens (satoshi-backed) |
| Protocol | BRC-20 | ARC-20 |
| Use Case | Digital art, collectibles | Asset tokenization, DeFi |
| Address Type | Any Bitcoin address | Taproot for creation/transfer |
👉 Learn more about Bitcoin’s NFT potential
FAQs
1. Is ARC-20 compatible with all Bitcoin wallets?
Yes, if the wallet supports satoshis (e.g., Sparrow Wallet).
2. Can ARC-20 tokens be exchanged for BTC?
Indirectly—each token represents a satoshi, redeemable through protocols.
3. What’s the advantage of Atomics over Ordinals?
Atomicals enable fungible assets, expanding Bitcoin’s DeFi utility.
Conclusion
ARC-20 and Atomics unlock new possibilities for Bitcoin:
- Asset Management: Satoshi-backed tokens with intrinsic value.
- Innovation: From NFTs (Ordinals) to DeFi-ready tokens (ARC-20).
As Bitcoin matures, these protocols could reshape its role in Web3 economies. Stay tuned for 2024 developments!