SATS is a token based on the BRC-20 standard, which uses the Ordinals protocol on the Bitcoin network to facilitate token creation and management.^[1][2]

Overview

SATS, introduced in March 2023, is a token developed under the BRC-20 standard and utilizes the ordinals protocol on the Bitcoin network. This protocol assigns unique IDs to satoshis, enabling the creation of interchangeable tokens.

The BRC-20 standard facilitates the processes of deploying, minting, and transferring these tokens, with network fees that vary based on Bitcoin’s fee rate. Unlike ERC-20 tokens, BRC-20 tokens, including SATS, do not support smart contracts. However, they are being explored for uses such as microtransactions and decentralized finance. SATS are derived from "Satoshis," the smallest unit of Bitcoin.^[1][2][3]

Deploying and Minting SATS

Deploying SATS BRC-20 tokens involves recording their metadata onto the Bitcoin blockchain in JSON format. This metadata typically includes details such as the protocol type, operational functions, token symbol, supply limits, minting limits, and decimal places.

The minting process aims to generate a specified number of tokens through JSON inscriptions. Once the network verifies these inscriptions, the tokens are assigned to the creator's address, similar to how transactions are processed.^[2]

Transferring SATS

Transferring SATS tokens requires generating a new inscription with the 'transfer' operation and specifying the amount to be sent. This inscription is processed as a standard Bitcoin transaction, which moves the tokens from one address to another. The Bitcoin network treats this as a regular transaction and does not interpret the embedded BRC-20 token data.

The introduction of SATS BRC-20 tokens has prompted discussions regarding increased transaction fees and concerns about deviations from Bitcoin's original peer-to-peer purpose, reflecting both the new functionalities and challenges associated with these tokens.^[2]