A Beginner's Guide to ORC-20 Tokens
ORC-20 is an experimental token standard that runs on the Bitcoin blockchain. It attempts to improve flexibility, security, and double-spend protection while remaining compatible with BRC-20, but its practical value, uses, and prospects are not guaranteed.
What is ORC-20?
ORC-20 builds on the Bitcoin Ordinals protocol and the BRC-20 standard. The relevant tokens are represented by JSON files inscribed on satoshis. They can be used to deploy new fungible tokens and also support migrating existing BRC-20 tokens. The design goals include backward compatibility and greater adaptability, scalability, and security.
How it attempts to improve BRC-20
BRC-20 has issues such as double-spend risk and a restricted namespace. ORC-20 addresses these limitations by supporting a wider range of data formats, using a more flexible namespace, and incorporating Bitcoin's unspent transaction output model. These designs are complex, however, and whether they provide a clear advantage remains disputed.
Transfer mechanism and risks
For a transfer, the sender must specify the amount for the recipient and send the remaining amount back to themselves. Once the transaction is complete, the previously recorded balance becomes invalid. Each transaction also contains a random number as a unique identifier, which can be used to cancel a transaction that has not finished processing. ORC-20 remains experimental, and its tokens have no guaranteed value or utility. Research it thoroughly before participating.
Original tutorial
https://www.binance.com/zh-CN/academy/glossary/orc-20-tokens
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