BRC-20 tokens are fungible token balances defined by a protocol that interprets specially formatted inscriptions recorded through Bitcoin transactions. Originally introduced as an experiment by Domo, BRC-20 uses a token-accounting layer on top of Bitcoin. Its name does not make it an Ethereum ERC-20 contract or a new form of BTC.
Inscriptions and indexing
The core operations are deploy, mint and transfer. Deployment defines token parameters, minting creates balances under those parameters, and transfer operations move balances between owners. Indexers read the ordered inscription activity and apply the protocol’s rules to reconstruct token balances.
In the basic transfer flow, a holder first creates a valid transfer inscription and then sends that inscription to the recipient. Sending an old mint inscription is not equivalent to transferring its originally credited token balance. Individual inscriptions are distinct records, even when the units represented by their accounting are interchangeable.
Bitcoin confirmation is only part of the check
Bitcoin nodes validate the underlying Bitcoin transactions; ordinary Bitcoin consensus does not itself maintain BRC-20 account balances. A confirmed inscription can therefore still contain an invalid token operation under the indexing rules.
Wallet compatibility, accepted protocol versions, available balance and correct inscription handling matter. Fees are paid for the underlying Bitcoin transactions, while token liquidity and value are separate market questions. An inscription or recognizable ticker alone does not guarantee a valid balance, resale demand or investment safety.