Introduction

In December 2022, developer Casey Rodarmor invented the Ordinals protocol, which assigns unique sequence numbers to each Satoshi and tracks them in transactions. Anyone can append additional data, including text, pictures, and videos, to the Taproot script in UTXO via Ordinals. These text, pictures, videos, and other data must be “inscribed” into a transaction’s script. After uploading, a tool called Indexer tracks and recognizes these “inscriptions,” a term not widely known at this time. In the following March, an anonymous user named Domo on X (formerly Twitter) announced that they had created a fungible token standard based on the Ordinals protocol called BRC-20. Users only need to follow the format and write standardized text into the transaction to issue the corresponding token. Developers later developed an “Inscription” tool that simplified the operation. Users only need to enter the name and quantity to deploy, mint, and transfer BRC-20 tokens.

A significant wealth effect was created with meme tokens like ORDI and SATS (BRC-20) being listed on exchanges. This has redirected market attention to the Bitcoin ecosystem. The emergence of various asset issuance protocols, such as Atomicals Protocol and RGB Protocol, has followed this shift. The Broadcast Token Naming System (BTNS) is one such protocol. Although BTNS was proposed at the end of 2023, its origins can be traced back to the Counterparty protocol of January 2014.

What is Broadcast Token Naming System?

BTNS is a cutting-edge experimental protocol that can issue Token assets on Bitcoin and other blockchains. This project was established by a well-known Bitcoin OG and developer, J-Dog, who proposed the Bitcoin transport layer protocol CounterParty. Currently, he is the founder and developer of a crypto tech service company called CoinDady, which also provides services for the BTNS official website.

From Github, it can be seen that the wallet (FreeWallet) and Decoder related to BTNS were developed by him. Currently, in addition to J-Dog, there is another developer named Javier (detailed information not found) who is maintaining BTNS. Javier was also one of the core contributors to the previous Counterparty and Dogeparty protocols.

Core Principles

BTNS currently uses the broadcast feature of the Counterparty platform to encode BTNS transactions in various ways (OP_RETURN, multi-sig, P2SH, etc.). Counterparty is a set of financial tools in the protocol built on the Bitcoin blockchain, which provides services to publish messages on the blockchain and add timestamps to them.

BTNS is built on CounterParty, but it is more like an advanced version of CounterParty. The biggest difference between it and Counterparty is that it has eliminated the control of Counterparty’s native asset, $XCP. That is, the asset issuance in BTNS does not require any $XCP.

Note: According to Counterparty’s Github, the main reason for using $XCP when creating assets is to discourage “spam” on the network.

Similar to BRC-20, BTNS also has three predefined broadcast formats, allowing users to DEPLOY, MINT, and TRANSFER tokens. Users and developers must use text that conforms to the format to complete related operations successfully.

Below are some relevant fixed format field definitions.

Deploy Operations

• TICK - 1 to 5 characters in length as token name (required)
• MAX_SUPPLY- Maximum token supply (max: 18,446,744,073,709,551,615 - commas not allowed)
• MAX_MINT - Maximum amount of supply a MINT transaction can issue
• DECIMALS - Number of decimal places the token should have (max: 18, default: 0)
• ICON - URL to an icon to use for this token (48x48 standard size)
• MINT_SUPPLY- Amount of token supply to mint immediately (default:0)
• TRANSFER - Address to transfer ownership of the token to (owner can perform future actions on token)
• TRANSFER_SUPPLY - Address to transfer MINT_SUPPLY to (mint initial supply and transfer to address)

A standard broadcast format for a DEPLOY operation is as follows:
bt:DEPLOY|TICK|MAX_SUPPLY|MAX_MINT|DECIMALS|ICON|MINT_SUPPLY|TRANSFER|TRANSFER_SUPPLY

Please note that during deployment, you need a unique name. Otherwise, only the original TICK creator can re-edit the original assets. Any word characters, special characters, and most printable emojis in the range U+1F300 to U+1F5FF can be used as the TICK field, but special characters and semicolons are prohibited.

Mint Operations

• TICK- Token name registered with DEPLOY format (required)
• AMOUNT- Amount of tokens to mint (required)
• DESTINATION- Address to transfer tokens to

A standard broadcast format for a MINT operation is as follows: bt:MINT|TICK|AMOUNT|DESTINATION

Transfer Operations

• TICK- token name registered with DEPLOY format (required)
• AMOUNT- Amount of tokens to send (required)
• DESTINATION- Address to transfer tokens to (required)

This format also allows repeating AMOUNT and DESTINATION to enable multiple transfers in a single transaction. A standard broadcast format for a TRANSFER operation is as follows: bt:TRANSFER|TICK|AMOUNT|DESTINATION [6]

Action Commands

There are more action commands related to BTNS than Counterparty’s message types. As shown in the table below:

BTNS Action Commands. Source: Github

Overall, BTNS commands cover almost all necessary token operation instructions, even some “niche” operations such as “RUG,” “SLEEP,” and “DESTROY,” etc. According to the BTNS official website, as of February 17, 2024, only the six features shown below are currently available:

BTNS Working Features. Source: BTNS.wtf - Broadcast Token Naming System (BTNS)

It’s worth mentioning the Lists command, which is mainly used to create address lists for other token commands. This feature is the basis for implementing various commands. For instance, the Airdrop command requires it to complete an airdrop to multiple addresses. If you want to implement KYC/AML, you also need to upload the corresponding prohibited address list. Theoretically, the Bet command can implement multi-address betting through this function, and so on.

In addition, two extended features have also been written on the official website:

• Messaging: Allow addresses to exchange secure encrypted messages anonymously.
• Virtual Machine (VM): A virtual machine that allows users to write and execute smart contracts using javascript code.

Information about these two extended features has not been disclosed at the moment.

Ecosystem Development

In BTNS Github, J-Dog explicitly stated, “BTNS is a bleeding-edge experimental protocol to play around with token functionality on Bitcoin and Counterparty. This is a hobby project, and I am NOT responsible for any losses, financial or otherwise, incurred from using this experimental protocol and its functionality.” So, for anyone reading this article, please be aware of the financial risks.

In addition to the BTNS protocol, he also developed the BTNS-420 and $GAS Token.

BTNS-420

According to Github, precisely speaking, BTNS-420 is a replica of CounterParty, used for testing the current token features and properties. It is still in the draft stage and has not been officially confirmed.

BTNS-GAS

BTNS-GAS is a token protocol created by J-Dog on February 12, 2024, using a fair sale mechanism divided into four time periods for minting with BTC. From Github, it can be seen that the purpose of J-Dog creating this token is to “Establish a standard GAS utility token to provide functionality where it isn’t technically possible to use BTC.” GAS can replace BTC’s role in part of the protocol. More details are being disclosed.

Development Status

As of February 22, 2024, the BTNS ecosystem has initially achieved scale. At the initial launch stage, the BTNS website, wallet, browser, and indexer were launched, and the relevant trading market also went online with trading functions.

• BTNS Official Website: BTNS.wtf - Broadcast Token Naming System (BTNS)
• Wallet: FreeWallet
• Browser: BTNS XChain Browser
• API: BTNS XChain API
• Indexer: BTNS Indexer
• Trading Market: Mark3.AI

According to the data from the XChain browser at noon on February 22, 2024, BTNS has had 1970 issuances, with 1617 tokens issued, of which there are approximately 62,000 minting behaviors and 1651 sending behaviors. Since the “Sends” function needs to be used for OTC transactions and market transactions, it can be seen that related transactions are not active.

BTNS Protocol Status. Source: https://btns.xchain.io/

BTNS vs. Ordinals Protocol

As an asset issuance metaprotocol, BTNS is often compared with the Ordinals protocol. As mentioned above, the Ordinals protocol achieves asset issuance by appending additional data to the Taproot script in UTXO. This extra data includes text, images, videos, etc. This means that it can not only issue “FT” assets similar to ERC-20 but also “NFT” assets similar to ERC-721, while BTNS can currently only issue “FT” assets. This is one of the advantages of Ordinals.

From an ecological perspective, BTNS depends on the broadcast of script information in Bitcoin transactions, while the Ordinals protocol relies on the addition of UTXO data. In the long run, this is a burden on the Bitcoin network, increasing the mining difficulty for miners.

Regarding development status, the Ordinals protocol has a first-mover advantage, whether it is the explosion of the BRC-20 protocol based on Ordinals, or the Bitcoin NFT craze brought about by Ordinals itself. As of February 27, the daily minting volume of the protocol fluctuates around 100K. In contrast, BTNS is relatively “quiet.”

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Ordinals Asset Type and Quantity. Source:https://dune.com/wasabireal/btc-ordinals-analysis

However, as the number of Ordinals assets increases, scalability becomes a complex issue. If you want to establish DeFi or other applications for Ordinals assets, it may require extremely complex programming, or even protocol layer optimization. Meanwhile, BTNS embedded various basic functionalities at an early stage, which facilitated future development and expansion.

Overall, the Ordinals protocol appears to have limited potential for “FT” scalability. However, its first-mover advantage and straightforward technical principles have increased in popularity. For BTNS to continue capturing Bitcoin asset issuance’s market share, substantial effort is required.

Conclusion

As the founder of the Runes Protocol mentioned in his blog, CounterParty’s biggest issue is the binding of basic operations with $XCP. BTNS has ideally improved this aspect and established a more comprehensive command system, bringing more composability for projects based on the BTNS protocol.

In essence, the underlying mechanism of BTNS is identifying output data in Bitcoin transactions. More BTNS transactions and complex command combinations could cause a certain degree of network congestion. Regarding network utilization, Taproot Assets and the RGB protocol would exert less burden on the network.

In terms of asset issuance, BTNS’s efforts in regulation and anti-money laundering far exceed other protocols, which is advantageous for the issuance of assets with regulatory needs. If extended features such as the Bitcoin Virtual Machine and anonymous address transfer information can be realized, BTNS will transform from an asset issuance metaprotocol to the smart contract layer of Bitcoin, capable of issuing assets and building various ecosystems and applications.

Of course, as a social experiment initiated by developer J-dog, its investment value is still open to debate, but its innovativeness is beyond doubt.