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Educational Post

What Are ARC-20 Tokens?

ARC-20 tokens are a type of digital asset created using the Atomicals protocol. They are fungible tokens that represent ownership of assets on the Bitcoin network.

ARC-20 represents a method for creating, transferring, and managing digital assets within the Bitcoin ecosystem, leveraging the protocol's capabilities to ensure unique digital ownership.

How Do ARC-20 Tokens Work?

ARC-20 tokens are linked to the value of at least one satoshi, the smallest unit of Bitcoin. This ensures that each ARC-20 token has a minimum value and cannot go below 1 satoshi. The tokens can be used, transferred, and split just like regular units of Bitcoin.
Each ARC-20 token has a built-in ticker and name service, ensuring that each token has a unique identifier. Additionally, each token carries its entire transaction history since its creation, eliminating the need for a centralized indexing service and enhancing transparency and security.

What Is the Atomicals Protocol?

The Atomicals protocol is an open-source system designed for creating digital objects, known as "Atomicals" or "atoms," on Bitcoin and other blockchains that use the UTXO (unspent transaction output) model.
These digital objects can be static or dynamic, including both fungible tokens and non-fungible tokens (NFTs). Atomicals are created through Bitcoin transactions and are compatible with any Bitcoin wallet, eliminating the need for additional chains, layer 2 networks, or third-party services.