ARC-20: A Beginner's Guide
ARC-20 is a form of fungible token based on the Atomicals protocol and operating on the Bitcoin network. It can be used to create, transfer, and manage digital assets. Key points include its value linkage to satoshis, issuance methods, and use of the UTXO model.
What Is ARC-20?
An ARC-20 token is created through the Atomicals protocol and represents ownership of a digital asset on the Bitcoin network. It is fungible and can be transferred and divided like a Bitcoin unit. The evidence says that each token is linked to at least 1 satoshi, the smallest unit of Bitcoin.
How Atomicals Supports It
Atomicals is an open-source protocol for UTXO blockchains such as Bitcoin. It can create static or dynamic digital objects, including fungible tokens and NFTs. These objects are generated through Bitcoin transactions without an additional blockchain or Layer 2 network, and the evidence also says that they can be compatible with Bitcoin wallets.
Two Issuance Methods
Decentralized issuance allows conditions such as total supply and reward per round to be set in advance, with participants joining the issuance progressively under predefined parameters. Direct issuance creates the entire supply in a single transaction output and lets the creator control distribution, but requires an advance commitment of satoshis equal to the planned supply.
Uses and Protocol Differences
ARC-20 can be used for digital collectibles, gaming assets, digital identities, peer-to-peer exchanges, virtual property rights, and other applications. Compared with the Ordinals protocol, the evidence says Atomicals can store multiple files, uses P2TR addresses only during issuance and updates, and includes a coded naming service.
Original Tutorial
https://www.binance.com/zh-CN/academy/glossary/arc-20
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