What is BRC-721E? A Guide to Moving Ethereum NFTs to Bitcoin
July 24, 2023
In the first half of 2023, developers introduced several token standards to Bitcoin by building on the Ordinals protocol. This guide will focus on one of those standards, called BRC-721E, detailing what it is and how it works.
Read on to learn about the BRC-721E token standard.
What Are Bitcoin-Native NFTs?
Bitcoin-native non-fungible tokens (NFTs) are minted and stored on the Bitcoin blockchain. They have been made possible by Ordinal Theory, a numbering system that allocates ordinal numbers to satoshis (sats), starting at zero. Sats are numbered in the order in which they entered circulation.
Software Developer Casey Rodarmor introduced the serialization of sats to help anyone inscribe (attach) arbitrary assets like audio, images, text, and videos to individual satoshis. Inscribing creates Bitcoin-native NFTs called Ordinal inscriptions or digital artifacts. Inscribed sats can be tracked throughout the outstanding Bitcoin supply and transferred from one wallet to another.
Rodarmor didn’t implement Ordinal Theory at the protocol level, meaning he enabled Bitcoin-native NFTs without making any changes to the blockchain. Users must use the Ord software or inscription services like Gamma, Ordinals Wallet, and OrdinalsBot to inscribe sats.
What is the BRC-721E Token Standard?
BRC-721E is a token standard that bridges Ethereum and Bitcoin, allowing users to convert ERC-721 NFTs to Bitcoin-native NFTs.
NFT project Bitcoin Miladays rolled out the BRC-721E token standard in May 2023 in partnership with Ordinals Market and Xverse Wallet. The standard is based on Ordinal Theory and doesn’t use smart contracts.
BRC-721E brings partial interoperability between the top two blockchains in the space today. It also creates an opportunity for Ethereum NFT projects to expand their reach.
Nevertheless, the BRC-721E NFT bridge is unidirectional, meaning you cannot turn a BRC-721E Ordinals inscription back into an ERC-721 NFT. The latter is a token standard that helps users track and transfer Ethereum-based NFTs within complex smart contracts.
How Does BRC-721E Work: Bridging NFTs from Ethereum to Bitcoin
In order to bridge NFTs from Ethereum to Bitcoin, users must first burn ERC-721 NFTs using an ETH call function. The burn transaction is an on-chain inscription request. Once completed, it cannot be undone.
Here’s an example of the ETH call function:
Once the ERC-721 NFT is burned, it is transferred to a Bitcoin wallet where the user can claim it by inscribing the correct BRC-721E JSON. The bridged NFT will appear on Ordinals Market.
But there’s a caveat.
The complete metadata of the bridged NFT will not be stored on-chain. Instead, it is stored off-chain on Ordinals Market’s collections page.
Below is an example of the BRC-721E JSON, a file data format that utilizes human-readable text.
Users can bridge ERC-721 NFTs directly on Ordinals Market. To complete the process, they must connect a Unisat or Xverse wallet to the bridge.
Pros and Cons of BRC-721E
Like other token standards, BRC-721E comes with both advantages and limitations.
- The bridging process is verifiable and immutable.
- Bridged NFTs automatically appear on NFT marketplaces.
- There’s room to improve the token standard in the future.
- Inscribed JSON data can be as small as 100 bytes.
- BRC-721E makes Ethereum and Bitcoin partially interoperable.
- They could boost Taproot’s adoption.
- For now, BRC-721E doesn’t store metadata on-chain.
- It’s a one-way bridge.
- Bridging could take up to a few days when the Bitcoin network is congested.
How Could BRC-721E Affect the Bitcoin Network?
As of writing, over 3,000 Ethereum-based NFTs have been bridged through BRC-721E, signifying some community interest.
This token standard could bring many users to the Bitcoin network, promoting a boost in adoption among NFT enthusiasts. On the flip side, increasing the number of users will put pressure on the limited Bitcoin block space, driving transaction fees up.
Besides potentially boosting Bitcoin adoption, BRC-721E may inspire more innovation that could produce a two-way bridge for NFTs and possibly fungible tokens. Such an invention could be life-changing, allowing the bi-directional movement of tokens across Ethereum and Bitcoin while permitting users to enjoy each network’s unique benefits.
Since the BRC-721E token standard is relatively new, it could take some time before its full impact on the network and NFT market is felt. For now, though, its effects are minimal compared to the more popular Bitcoin standards, like BRC-20 and ORC-20.
What is an NFT bridge?
An NFT bridge permits users to transfer tokens from one blockchain to another. The movement of assets can be one-way or two-way. The BRC-721E token standard acts as a one-way bridge, enabling users to move ERC-721 NFTs from Ethereum to Bitcoin. In the future, the standard could be upgraded to enable the movement of NFTs from Bitcoin to Ethereum.
What is the difference between ERC-721 and BRC-721E?
ERC-721 was the first Ethereum token standard for NFTs. It has been around for years, making it more established than BRC-721E. ERC-721 was introduced through an Ethereum Improvement Proposal (EIP). BRC-721E is a new token standard launched through a Bitcoin Improvement Proposal (BIP). The ERC-721 token standard allows users to issue NFTs via complex smart contracts, unlike BRC-721E, which doesn’t use smart contracts.