Inscription
Intermediate
What Are Inscriptions in Crypto?
In the blockchain space, the term inscription refers to metadata attached to individual units of cryptocurrency. Inscriptions became popular when the crypto community started attaching pieces of data to satoshis, the smallest units of bitcoin (BTC). They are essentially pieces of information, such as text, images, or code, appended to the transaction outputs on the Bitcoin blockchain.
How Bitcoin Inscriptions Work
When a user makes a Bitcoin transaction, they can include additional data in the form of inscriptions. This metadata becomes a permanent and immutable part of the transaction, stored on the decentralized and public ledger of the Bitcoin blockchain.
The process of inscribing satoshis allows for the creation of unique, non-fungible “digital artifacts”. This is achieved through a numbering system known as the Ordinal Theory. The emergence of blockchain inscriptions is closely related to the Bitcoin Ordinals protocol, which uses Ordinal Theory to assign numbers to each satoshi based on the order in which they were mined.
Bitcoin Ordinals
Bitcoin Ordinals were introduced in 2023 as a method of creating Bitcoin NFTs by attaching information to satoshis. Ordinals in the context of Bitcoin refer to the numbered and inscribed satoshis created through the Ordinals protocol.
BRC-20 Tokens
BRC-20 is an experimental token standard that enables the minting and transferring of fungible tokens via the Ordinals protocol on the Bitcoin blockchain. BRC-20 tokens leverage the simplicity, immutability, and security of Bitcoin. Each token generated using the BRC-20 standard is essentially an inscription on a satoshi.
What Are the Differences Between Inscriptions, Ordinals, and BRC-20?
Inscriptions are metadata added to units of cryptocurrencies. Ordinals were introduced by the Bitcoin Ordinals protocol as an outcome of blockchain inscriptions. It uses Ordinal Theory to assign numbers to satoshis. BRC-20 is an experimental token standard on the Bitcoin blockchain that uses the Ordinals protocol.