DeutschORC-20 was announced in 2023 as the technically superior successor to BRC-20. The standard was intended to fix the weaknesses of its predecessor and take user-generated tokens on Bitcoin to a new level. In the end, a different protocol prevailed.
What is ORC-20?
ORC-20 is a standard for user-generated tokens on the Bitcoin blockchain. The project was introduced on April 30, 2023, by the Twitter channel OrcDAO. It is a technical improvement of the rudimentary BRC-20 standard, which was created in early March 2023 based on the Ordinals protocol. Its name is in turn derived from Ethereum’s successful ERC-20, which serves as a model.
BRC-20 started as a fun project. The developers of ORC-20, on the other hand, wanted to create a serious version with their new token standard that fixes the technical shortcomings of BRC-20.
Better adaptability, scalability, and security were the goals. ORC-20 is compatible with BRC-20. The basic functionality of both Bitcoin tokens is the same: data in the form of a JSON file is attached to the smallest unit of a Bitcoin, a satoshi. The special characteristics of the satoshi are stored in this file.
Existing BRC-20 tokens had the option to migrate to the ORC-20 standard. The native Bitcoin stablecoin Stably USD was one of the projects that pursued this plan.
ORC-20 vs. BRC-20: Technical Improvements
ORC-20 was intended to be the first proper token standard on Bitcoin. Within the world’s largest crypto network, it would have made it possible to create native tokens with specific properties, such as stablecoins. The standard primarily addressed a weakness of the older BRC-20: vulnerability to double-spending attacks. This gap was to be closed through the use of UTXOs.
Furthermore, the standard promised more transparency, allowing users to track the exact circulating supply of a specific token themselves to prevent fraud. Other technical bottlenecks were to be eliminated. BRC-20 uses a naming system that only allows four characters. ORC-20 allows completely free choice of names. Transfers of ORC-20 tokens can also be partially canceled. In addition, subsequent upgrades are possible, while BRC-20 only allows static tokens.
Users can bundle payments to different recipients into a single transaction. Furthermore, the BRC-20 ecosystem relied heavily on centralized indices and was therefore not secure against manipulation.
Despite all the innovations, using the tokens within smart contracts, as with competitor Ethereum, was not possible. In Ethereum’s case, this feature accounts for a significant part of its success.
Why ORC-20 didn’t catch on
Despite its technical advantages, ORC-20 remained a niche project. There were several reasons for this. The standard never found a broad developer community, the critical mass of projects failed to materialize, and major marketplaces and wallets were hesitant or failed to integrate ORC-20 altogether.
However, another factor was decisive: in April 2024, Casey Rodarmor, the creator of the Ordinals protocol, released the successor standard Runes. This protocol was written from scratch, is not based on Ordinals, and consistently uses the UTXO model. This allows Runes to solve exactly the problems that ORC-20 wanted to address, but with the credibility and reach of the Ordinals creator behind it.
The result: Runes has established itself as the dominant standard for fungible tokens on Bitcoin, while ORC-20 has become practically meaningless. Most new projects today choose Runes, while some established tokens stay with BRC-20. There was little room left for ORC-20.
Conclusion: ORC-20 today
ORC-20 remains an interesting footnote in the history of Bitcoin token standards. The technical ideas were sound, and the motivation was justified. The standard did not fail because of its technology, but because of timing and lack of momentum. Anyone interested in tokens on Bitcoin today will find Runes to be the more practical and widely used alternative.
