Chapter Content
In the previous session, we reviewed the history of Bitcoin asset issuance and the technical background of inscriptions. In this session, we’ll illustrate the specific procedures and underlying principles of inscriptions, using BRC-20 as an example.

Core Principles of Inscriptions

Using the Bitcoin blockchain as an example, during transactions (such as transfers) on the Bitcoin chain, traders can enter their desired text into a specific field. This text will be packaged by blockchain nodes along with the transaction and ultimately become part of the chain. “Inscription” is the process of entering data into a transaction. However, to generate inscriptions that are recognized by the market, certain rules must be followed when “inscribing.” These rules are different inscription protocols. In the case of the popular BRC-20 inscription protocol Ordi on Bitcoin, the inscription content is as shown below. Participants can only obtain Ordi inscriptions by inscribing according to this content.

Information on Ordi Inscriptions (Source: BRC-20 Doc)

The example above is the genesis transaction for the deployment of the Ordi inscription. The transaction contract at the time was: b61b0172d95e266c18aea0c624db987e971a5d6d4ebc2aaed85da4642d635735. We can query its transaction details using the Bitcoin browser Blockchain.com. The result is as shown below:

A string of hexadecimal characters has been written into the witness field of the transaction (the part highlighted in blue above). When we use a converter to turn these hexadecimal strings into English characters, we can find:

How to Deploy, Mint, and Transfer Inscriptions

After understanding the basic principles of inscriptions, we need to learn about fundamental inscription operations. There are many inscription protocols, such as BRC-20, ARC-20 (Atomical protocol), Runes Protocol, and Tap Protocol. However, these inscription protocols all share basic commands:

• Deploy: Deploys the inscription on the blockchain and defines the asset’s basic information, such as total supply, used protocol, and minting method.
• Mint: “Creates” the inscription and sends it to your address and wallet.
• Transfer: Transfers the inscription asset to another address.

These basic commands also need to follow the protocol’s specified format. Take BRC-20 as an example. There are six key protocol fields, as shown below. Each field has its respective meaning:

Source: BRC-20 Doc

• “p”: Protocol Type. A mandatory keyword that defines the operation as based on the BRC-20 protocol, helping other systems identify and process BRC-20 events.
• “op”: Event Type. A mandatory keyword that defines the event type, whether it’s deployment (“Deploy”), minting (“Mint”), or transfer (“Transfer”). Here, the content of “op” is “transfer,” signifying the event type as a transfer.
• “tick”: BRC-20 Token Identifier. A mandatory keyword that defines the BRC-20 token name, consisting of four letters. Here, the content of “tick” is “ordi,” indicating the transferred BRC-20 token is $ordi.
• “amt”: Amount of Transferred BRC-20 Tokens. A mandatory keyword that defines the number of BRC-20 tokens to be transferred.
• “max”: Maximum Supply. A mandatory keyword that defines the maximum supply of the BRC-20 token.
• “lim”: Maximum Number of BRC-20 Tokens Per Inscription. An optional keyword that defines the maximum number of BRC-20 tokens a user can obtain by minting a single inscription. If this is set to 1000, then minting a single inscription can grant a maximum of 1000 BRC-20 tokens.
• “dec”: Decimal Precision. An optional keyword that defines the decimal precision of the BRC-20 token, with a default of 18.
• “to”: Transfer Destination. An optional keyword that defines the receiving address for the transfer. If left empty, the default receiving address is correct. Currently, this keyword is only used for Dune Analytics dashboard data tracking tests.
• “fee”: Transfer Fee. An optional keyword that defines the transfer fee amount. Presently, this keyword is only used for Dune Analytics dashboard data tracking tests (in the absence of Taproot data).

The relevant protocol base instructions are commands with each field arranged according to the specifications. The deployment instruction is as follows (using Ordi inscription as an example): \
{

“p”: “brc-20”,

“op”: “deploy”,

“tick”: “ordi”,

“max”: “21000000”,

“lim”: “1000”

}

This JSON-formatted text describes using the BRC-20 protocol to mint an asset named “ordi” with a maximum supply of 21,000,000 and a minting quantity of 1000 per mint. The minting instruction is as follows:

{

“p”: “brc-20”,

“op”: “mint”,

“tick”: “ordi”,

“amt”: “1000”

}

This JSON text indicates that you want to mint 1000 BRC-20 inscriptions named “ordi.” The transfer instruction is also relatively simple:

{

“p”: “brc-20”,

“op”: “transfer”,

“tick”: “ordi”,

“amt”: “100”

}

Similar to BRC-20, other inscriptions operate on a similar principle. Deployment involves uploading specific information to the transaction or the blockchain’s architecture itself. Different protocols have distinct protocol specifications and fields. Some only modify the “p” field in the protocol specifications mentioned above, while others change it to a different protocol format and add corresponding fields to expand functionality.

Inscriptions vs. Tokens

The inscriptions presented above primarily generate inscriptions that resemble assets like tokens. Additionally, there are asset protocols like Ordinals Protocol and Atomicals Protocol that can generate assets similar to “NFTs.” The common characteristic of these inscriptions is that all information is stored on the chain. Due to their highly public nature, they cannot currently be controlled by contracts compared to tokens. They can only be used to name some basic token information, such as total supply and name. Common features like token unlocking, staking contracts, and initial distribution are not yet possible.

Crypto researcher CaptainZ, in his article “The Essence of Inscriptions is SFT,” argued that inscriptions are actually a third type of asset called SFT (Semi-Fungible Token) beyond the common fungible tokens (ordinary tokens) and non-fungible tokens (NFTs). SFTs are intermediate between FTs and NFTs, meaning they can be split and calculated while also having uniqueness.

While this argument has not gained widespread community acceptance, it has sparked some discussion. Undoubtedly, inscriptions are a new way to issue assets, and this type of asset is different from existing asset types. In common Turing-complete blockchains like Ethereum, Solana, and Near, tokens and NFT assets are more popular, and most dApps and infrastructure are designed based on this.

However, in non-Turing-complete blockchains like Bitcoin, tokens and NFTs cannot exist. Inscriptions have become one of the few asset issuance solutions, and with the wealth effect and the influx of developers, inscription infrastructure has continued to emerge. Inscription users and liquidity have both improved significantly. Inscriptions are becoming a mainstream asset issuance method on public chains like Bitcoin and Dogechain.

Using Tools for Quick Operations

As can be seen from the principles above, the main operations of inscriptions involve multiple on-chain operations, some of which even require running nodes to “inscribe.” Therefore, many excellent developers and teams have developed simple operating tools, like Unisat navigation tool, where users only need to input basic data such as the name and quantity of the inscription and submit the Gas Fee to inscribe.

Unisat Inscribing Page. Source：https://unisat.io/inscribe

In addition, there are various tools that can help users view inscription data and assist investment decisions, such as the navigation page and Launcpad set up by Gate.io. These tools will be discussed in detail in Chapter 4.

Inscription Page of Gate.io. Source：https://www.gate.io/web3/inscription-market/bitcoin/brc-20

Chapter Summary

• The core principle of inscription involves inscribing information on the blockchain.
• There are various inscription protocols in the market, including Ordinals Protocol, BRC-20, ARC-20 (Atomical Protocol), Runes Protocol, and Tap Protocol. However, all these inscriptions have the following basic commands:
• Deployment: The inscription is deployed on the blockchain, defining basic information about the asset, such as total quantity, the protocol used, and the method of minting.
• Minting: The inscription is “created” and placed in one’s address and wallet.
• Transfer: The inscription asset is transferred to another address.