If you've been curious about Bitcoin recently, you've probably encountered a whirlwind of new terms like Ordinals, BRC-20, Atomicals, and Pipe. It can be confusing to figure out what they are and how they relate to each other.
This guide breaks down the key developments in simple, straightforward language. We'll walk through the timeline and explain the main ideas behind these protocols without technical jargon. Our goal is to make these concepts clear for everyone—even if you're completely new to the topic.
Understanding Bitcoin’s New Wave of Innovation
Bitcoin, the original cryptocurrency, is experiencing a renaissance. Developers are building new ways to use its robust and secure blockchain for more than just peer-to-peer payments. These new protocols expand what’s possible on Bitcoin, enabling the creation of digital tokens, collectibles, and more—all while leveraging Bitcoin’s unparalleled security and decentralization.
This innovation is driven by Bitcoin’s permissionless nature: anyone can build on it without asking for approval. The results are new digital assets and experiments that are catching the attention of developers and users worldwide.
The Beginning: Ordinals and BRC-20
The recent wave of innovation started with a developer named Casey Rodarmor. In December 2022, he introduced the Ordinals Protocol. This system assigns a unique number to each satoshi (the smallest unit of Bitcoin) and allows users to attach extra data—like text, images, or videos—to them. This turned Bitcoin into a platform for digital artifacts, often called "Bitcoin NFTs."
At first, Ordinals was used mainly for creating and trading these unique digital items. But in March 2023, an anonymous developer known as domo launched BRC-20, a standard for creating fungible tokens on Bitcoin using the Ordinals system. Think of it like creating custom tokens on Bitcoin, similar to how ERC-20 works on Ethereum.
The first token, called Ordi, gained significant attention. Early participants who had the technical know-how to set up a Bitcoin node were able to acquire these tokens at very low cost. As BRC-20 tokens grew in popularity, they started to dominate the activity on Ordinals.
Interestingly, Casey Rodarmor, the creator of Ordinals, wasn’t thrilled with this development. He felt that BRC-20 tokens cluttered the network with what he considered "junk" transactions. This tension highlights the different visions for what Bitcoin should be used for.
The Multi-Protocol Developer: Beny’s Expansive Vision
Following the rise of BRC-20, a developer named Beny became highly active in the space. He launched several interconnected projects:
- LooksOrdinal: An early tool for minting BRC-20 tokens.
- Trac: A BRC-20 token that also serves as a governance token for one of his other projects.
- Tap Protocol: An upgrade to BRC-20 that enables more complex functions, like decentralized finance (DeFi) features on Bitcoin.
- Pipe: A protocol inspired by Casey’s proposed Runes system, designed for creating tokens with greater efficiency.
These projects are interlinked in what some describe as a "nested" governance model. For example, holding Trac might give you a say in Tap Protocol, and holding Tap might influence Pipe. This approach ties the ecosystems together, creating a network of projects that support and govern one another.
One unique aspect is that the main governance token for this ecosystem, called Tap, isn’t yet publicly traded. The plan is to use it for funding, governance, and eventually, distribution to community members through airdrops.
Atomicals: A Thoughtful Alternative
While Ordinals and BRC-20 were gaining traction, another anonymous developer was working on a different approach. After months of development, the Atomicals Protocol was launched in September 2023.
Atomicals differs from Ordinals in several key ways. It uses Bitcoin’s native UTXO model, which aligns more closely with how Bitcoin itself operates. This makes it technically elegant and efficient. Atomicals also includes its own token standard (ARC-20) right from the start, avoiding the need for community-developed additions like BRC-20.
The first token on Atomicals, Atom, was distributed through a CPU mining process, which required more technical setup but was seen as a fairer distribution method. The developer behind Atomicals is known for a methodical and principled approach, earning respect from many in the community.
Casey’s Response: The Upcoming Runes Protocol
Not to be outdone, Casey Rodarmor announced his own fungible token protocol for Bitcoin, called Runes. Like Atomicals, it is designed to use Bitcoin’s UTXO model, making it more efficient than BRC-20.
The announcement came shortly after Atomicals launched, adding to the competitive landscape. Beny, ever the rapid executor, quickly created Pipe based on the early ideas behind Runes.
Casey continues to work on Ordinals improvements while developing Runes. The full launch of Runes is highly anticipated and could bring even more activity to the Bitcoin network.
Key Takeaways for Beginners
- Ordinals started it all by enabling data attachment to satoshis, leading to Bitcoin-based digital collectibles.
- BRC-20 built on Ordinals to allow the creation of custom tokens.
- Atomicals offers a technically refined alternative with built-in token support.
- Runes is Casey Rodarmor’s upcoming response, aiming for a more efficient token protocol.
- Innovation on Bitcoin is accelerating, with multiple approaches competing and coexisting.
This activity shows that Bitcoin is more than just digital gold—it’s becoming a platform for experimentation and innovation. However, it’s essential to remember that these are early-stage experiments with real risks.
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Frequently Asked Questions
What is the difference between Ordinals and BRC-20?
Ordinals is a protocol for attaching unique data to satoshis, often used for NFTs. BRC-20 is a standard built on top of Ordinals that enables the creation of fungible tokens, similar to cryptocurrencies on other blockchains.
How does Atomicals differ from Ordinals?
Atomicals uses Bitcoin’s UTXO model directly, making it more efficient and aligned with Bitcoin’s design. It also has a built-in token standard (ARC-20), whereas Ordinals required BRC-20 to be added separately.
Are these new protocols safe to use?
While innovative, these protocols are experimental. Users should be cautious, understand the risks, and never invest more than they can afford to lose. Always do your own research and use trusted tools.
What is the purpose of these tokens?
Some are used for governance within specific ecosystems, others are experimental currencies, and many are speculative assets. Their utility is still evolving.
Do I need technical skills to participate?
Early participation often required running a Bitcoin node or using command-line tools. However, user-friendly platforms and wallets are emerging to make access easier for everyone.
Why is there so much activity on Bitcoin now?
Bitcoin’s security, decentralization, and permissionless nature make it an attractive foundation for innovation. Developers are exploring new ways to build on its proven network.