The token standard defies Bitcoin’s 4 MB storage limit

On February 1, developer, crypto advocate and founder of Taproot Wizards Udi Wertheimer made history by purposefully orchestrating the largest block and largest transaction in Bitcoin history. Upon striking the first of many future wizards, he reached the absolute maximum BTC block size of 4MB, something many until now thought was impossible.

Just a few months later, on May 22, members of the Spirit DAO — a coalition of collectors dedicated to uplifting the Azuki universe — effectively blew Wertheimer’s record out of the water. By slapping a 6.9 MB strip banner on Bitcoin, the DAO stole the crown, solidifying the piece as the largest file size stored on BTC to date.

But how? Considering that the maximum block size on Bitcoin cannot exceed 4 MB, what kind of wizardry has the Spirit DAO implemented in their performance? Well, it all has to do with BRC-721, a new type of NFT token standard that is revolutionizing something called “Smart Inscriptions” on Bitcoin.

What is BRC-721?

Degens will immediately recognize the acronym name of BRC-721 as being related to ERC-721 – also referred to as the first token standard for Ethereum NFTs. Simply put, BRC-721s are smart contract based NFTs, but on BTC.

But of course there is more than that. BRC-721 is inspired by the experimental BRC-20 token standard created and launched in March 2023 by an anonymous developer Domo. BRC-20 was created to give Bitcoin more advanced NFT functionality, but it was centered around fungibility and was missing one thing: smart contracts.

Instead of smart contracts doing the heavy lifting for NFT makers (as they have been doing on Ethereum for years), BRC-20 lets users script file on Bitcoin, using Ordinals to write JSON data to Satoshi (sats) – Bitcoin’s atomic unit. Instead of going into more detail about that functionality here, you can read more in our full explanation of Ordinals.

What is important to know is that BRC-721 builds on the principles of BRC-20, but aims to expand Bitcoin tokenization capabilities with real non-fungible tokens. To do this, BRC-721 brings the proven smart contract functionality that the NFT space knows and loves from Ethereum to Bitcoin. And it’s all powered by the Trustless Computer protocol.

So unlike Ordinals Inscriptions, which contains metadata attached to information written directly into the Bitcoin blockchain (primarily as text files), the BRC-721 protocol functions as a solid smart contract running on Bitcoin. This means that while metadata is still coined on-chain, BRC-721 operability surpasses that of Ordinals by offering programmability (Smart Inscriptions), larger storage limits, and lower network costs.

Who Uses BRC-721?

There are three important names to know when it comes to understanding the current status of BRC-721. They are New Bitcoin City (NBC), Smart Inscriptions and Trustless NFTs. Essentially, everything comes back to NBC. Billed as a “radical new way to explore Bitcoin beyond just a currency,” the platform is built on the Trustless Computer protocol and acts as a “diverse corner of Web3” where crypto art, DeFi, AI and more facets. of the metaverse converge.

NBC also plays a key role in the BRC-721 ecosystem. On March 29, the platform broke ground with the release of Sudos, a collection of 1,024 penguin-themed fully on-chain collectibles that essentially became the first ever BRC-721 venture.

2/ SUDOS is now tradable on TrustlessNFTs
So now you can:
Buy / sell
List for sale
Make an offer

Discover more BRC-721 collections here: https://t.co/iVVxFsh79N pic.twitter.com/B9F8Qwyhfa

— New Bitcoin City (@NewBitcoinCity) June 9, 2023

Which brings us to Smart Inscriptions, the term coined by NBC to exist in place of “BRC-721”. Essentially, Smart Inscriptions are for BRC-721 like NFTs are for ERC-721. That is, they are a shortened version, parallel to Ordinals Inscriptions, to define the growing categories of NFTs on BTC.

Of course, tokens that cannot be traded are essentially just a consolation prize from the blockchain. So to bring more utility to the BRC-721 ecosystem it created, on June 9, NBC unveiled Trustless NFTs, a marketplace for smart enrollments. To date, over 1,000 Smart Inscriptions have been created and added to the Trustless NFTs platform, including Sudos, Fading Memories, GlixPunks, and more, serving as the first public launch of the BRC-721 collection.

Does BRC-721 catch on?

As with the many other types of new Ethereum and Bitcoin-based tokens popping up recently, only time will tell how important a facet BRC-721 could be. However, given Ordinals’ continued popularity, Smart Inscriptions could easily become another market mover to look out for.

Still, it’s not just the hype cycle that’s got the BRC-721 talked about. On the contrary, the unlimited storage limit and the reduction in fees should both be major concerns for all creators and traders in the Bitcoin NFT ecosystem. And since the Spirit DAO has already staked its claim, more builders are sure to follow suit.