Ethereum vs Bitcoin : A Deep Dive into Token Standards: ERC-20 vs. SIP-10 vs. BRC20 vs. STX20
Tags: brc20, stx20, tokenstandards, ethereumvsbitcoin
Published: 2024-02-23 02:17:02

The world of blockchain is vast and ever-evolving, with various platforms offering unique approaches to smart contracts and tokenization.

Among these, token standards play a crucial role in defining how tokens operate within these ecosystems. This blog post explores four prominent token standards: Comparison of ETH Vs BTC token standards.


![Image description](https://dev-to-uploads.s3.amazonaws.com/uploads/articles/89ri0nwfj0lqlmbzwdzs.png)


Ethereum's ERC-20, Stacks' SIP-10, Bitcoins-BRC20, and Stacks-STX20.


Understanding the Basics 🌈

Before diving into specifics, let's understand what a Token standard is. 

![Image description](https://dev-to-uploads.s3.amazonaws.com/uploads/articles/5x8j11u19585dlg6m7zd.gif)


A token standard defines a set of rules and functions that a token contract must implement to ensure interoperability within the blockchain ecosystem.

This includes how tokens are transferred, how transactions are approved, and how users can access token data.


### ERC-20: The Ethereum Token Standard 🌍

Ethereum's ERC-20 is the most widely recognized token standard, serving as a blueprint for creating fungible tokens that can be traded, spent, or gifted. ERC-20 tokens share the same functionalities, making them easily exchangeable and compatible with wallet services and exchanges.


**Key Functions:**
- `transfer(address to, uint256 value)`: Sends a specified amount of tokens to a designated address.
- `approve(address spender, uint256 value)`: Grants permission to another account to withdraw a specified amount of tokens from the caller's account.
- `transferFrom(address from, address to, uint256 value)`: Allows a spender to transfer tokens on behalf of the token owner.

**Example ERC-20 Contract:**
```solidity
pragma solidity ^0.8.0;

interface IERC20 {
    function totalSupply() external view returns (uint256);
    function balanceOf(address account) external view returns (uint256);
    function transfer(address recipient, uint256 amount) external returns (bool);
    // Other functions...
}

contract OurToken is IERC20 {
    mapping(address => uint256) private _balances;
    mapping(address => mapping(address => uint256)) private _allowances;
    uint256 private _totalSupply;

    // Implementations of IERC20 functions...
}
```

## SIP-10  Stacks' Approach to Fungible Tokens 🌳

SIP-10 is a fungible token standard developed for the Stacks blockchain, allowing the creation, minting, and transfer of fungible tokens. This standard is implemented through the Ordinals Protocol, enabling users to deploy token contracts and interact with fungible tokens seamlessly. SIP-10 aims to foster interoperability within the Stacks ecosystem.


![Image description](https://dev-to-uploads.s3.amazonaws.com/uploads/articles/nv1110qhsbzu4ofx72n9.png)


### Key Features

- **Fungibility**: SIP-10 tokens are interchangeable units with equal value, similar to traditional currencies.
- **Ordinals Protocol**: SIP-10 leverages the Ordinals Protocol for token creation and management on the Stacks blockchain.
- **Simplicity**: The standard offers a simplified tokenization mechanism, making it user-friendly and accessible.
- **Security**: SIP-10 tokens benefit from the security features inherent in the Stacks blockchain, ensuring integrity and protection.

### Overview
SIP-10 tokens are designed to unlock new capabilities on the Stacks network, such as their integration into decentralized finance (DeFi) protocols and various blockchain applications. The standard provides a foundation for the development of innovative financial products and services within the Stacks ecosystem.

### Development
SIP-10 was introduced as an experimental standard to explore the potential of fungible tokens on the Stacks blockchain.Its creation aimed to expand the utility and versatility of the Stacks network beyond its primary functions.

**Key Functions:**
- `transfer(uint256 amount, principal sender, principal recipient, memo)`: Transfers tokens from one account to another.
- `get-balance(principal)`: Returns the token balance of a specific account.
- `get-total-supply()`: Returns the total supply of the tokens.


**Example SIP-10 Contract:**
```clarity
(define-fungible-token sip10-token)

(define-public (transfer (amount uint) (sender principal) (recipient principal) (memo (optional (buff 34))))
    (ft-transfer? sip10-token amount sender recipient))
```

### Future Prospects
As more projects adopt the SIP-10 standard, it is expected to foster innovation and drive the growth of decentralized applications (dApps) and financial instruments within the Stacks ecosystem. The continuous evolution of SIP-10 features will likely attract developers and users, enhancing its adoption and utility over time.

### BRC20: Bitcoin's Programmable Tokens 🚀

🚀 BRC-20 tokens are programmable tokens built on the Bitcoin blockchain, introducing new functionalities beyond simple Bitcoin transactions.

## BRC-20 Token Standard 


![Image description](https://dev-to-uploads.s3.amazonaws.com/uploads/articles/r3m72kn37x8fllj56t37.png)


BRC-20 is an experimental token standard developed for the Bitcoin blockchain, enabling the deployment, minting, and transferring of fungible tokens through the Ordinals Protocol. This standard leverages Ordinals inscriptions of JSON data to implement token contracts, allowing users to create, mint, and exchange BRC-20 tokens.

### Key Features

- **Experimental**: BRC-20 is still under development and testing, making predictions about its long-term success uncertain.
- **Fungibility**: Like traditional currencies, BRC-20 tokens are interchangeable and indivisible units.
- **Simplicity**: Compared to other token standards, BRC-20 avoids complex smart contracts, making it simpler to use.
- **Security**: BRC-20 benefits from the robust security measures of the Bitcoin blockchain, such as its decentralized structure, algorithmic technologies, and proof-of-work consensus mechanism.
- **No Smart Contract Functionality**: Unlike other token standards, BRC-20 does not support smart contracts, limiting its capabilities in areas such as automation, transparency, security, and asset management.
- **Limited Interoperability**: BRC-20 tokens do not interact well with other blockchains, reducing their versatility.

### History and Development

Created by an anonymous developer named Domo, BRC-20 was introduced on March 9, 2023. Since then, it has gained traction among various decentralized finance (DeFi) projects and has been adopted by infrastructure providers offering platforms for creating and trading BRC-20 tokens.

### Use Cases

BRC-20 tokens have been utilized in a wide array of applications, including DeFi protocols and blockchain games. They have also been employed in non-fungible token (NFT) markets, where they serve as a means of payment or as part of NFT collections themselves.

### Challenges and Risks

Despite the excitement surrounding BRC-20, the standard faces challenges related to its immature stage, lack of smart contract functionality, and limited interoperability. Investors and users must exercise caution while dealing with BRC-20 tokens until the standard becomes more established and reliable.

In summary, BRC-20 presents an innovative opportunity to expand the functionalities of the Bitcoin blockchain but requires careful consideration given its experimental nature and associated risks.

## STX20: Inscribing the Future on Stacks 🌟

STX20 tokens are a new fungible token standard on the Stacks network, inspired by the BRC20 token standard on Bitcoin. 


![Image description](https://dev-to-uploads.s3.amazonaws.com/uploads/articles/jcy4jt2kujpfujz7k32p.png)


These tokens are created through the STX20 protocol, allowing for the creation and distribution of fungible, on-chain tokens on Stacks by inscribing data onto individual STX tokens.

The STX20 protocol leverages the transaction memo field to provide a more efficient and gas-saving alternative to traditional smart contracts for specific use cases on Stacks.

The STX20 protocol is designed to embed crucial protocol information within the metadata of STX token transfers, enhancing efficiency and making it an attractive choice for developers seeking straightforward solutions for their applications. By optimizing within the 34-symbol limit of the Stacks Blockchain, STX20 sets a new standard for maximizing impact with minimal footprint.

In summary, STX20 tokens represent a significant advancement in creating and sharing digital artifacts on Stacks, with impressive transaction numbers since their launch. The protocol's integration with the Stacks blockchain and commitment to efficiency make it promising for developers seeking practical solutions in decentralized applications around Bitcoin.

References:
[1] https://stacks.org/stx20-bitcoin-l2s
[2] https://www.xverse.app/blog/what-are-stx20-tokens
[3] https://stx20.com
[4] https://www.altcoinbuzz.io/cryptocurrency-news/stx-20-tokens-inscriptions-on-stacks/
[5] https://coingape.com/education/brc-20-know-everything-about-this-new-development-by-bitcoin/
[6] https://academy.binance.com/en/glossary/brc-20-tokens 
[7] https://cointelegraph.com/learn/what-is-a-brc-20-token-standard-an-overview
[8] https://github.com/stacksgov/sips/blob/main/sips/sip-010/sip-010-fungible-token-standard.md