ARC20 Token and Atomicals Protocol: A New Paradigm for Digital Assets on the Bitcoin Network

The Atomicals protocol is an innovative protocol built on the Bitcoin network, bringing new possibilities to the Bitcoin ecosystem. This protocol allows users to create, transfer, and upgrade various digital assets on the Bitcoin network, including non-fungible tokens (NFTs) and fungible tokens.

Through the Atomicals protocol, users can generate unique digital collectibles on the Bitcoin network, such as native digital NFTs, in-game assets, digital identities, and domain names. At the same time, the protocol also supports the creation of interchangeable tokens, which we refer to as ARC20 Tokens.

The Atomicals protocol fully leverages the UTXO model of Bitcoin, using satoshi as the accounting unit. This means that all digital assets created based on the Atomicals protocol can trace their complete transaction history, ensuring the authenticity and verifiability of the assets. Any participant can verify the transaction history through simple rules, easily detecting the authenticity and credibility of the assets.

This method essentially views the Bitcoin network as a source of truth. By combining the Bitcoin network with the Atomicals protocol, it achieves the trustworthiness of digital assets, returning to the original intent of individuals fully owning and controlling their digital assets. In the era of digital native assets, this infrastructure for ownership control is particularly important.

The Atomicals protocol is highly compatible with the characteristics of Bitcoin, and its implementation is relatively simple and straightforward. This has garnered widespread attention and favor from the technical community. NFTs built on the Atomicals protocol can be created and transferred directly on the Bitcoin network without relying on indexers or other intermediaries, nor does it require any modifications to the underlying Bitcoin, let alone the introduction of second-layer solutions or sidechains.

ARC20 is an intriguing component of the Atomicals ecosystem. It is a fungible token standard supported by satoshi, where each ARC20 token represents ownership of one satoshi. This means that the lower limit of the value of each ARC20 token is the value of one satoshi. ARC20 tokens can be split and merged, and anyone can freely create ARC20 tokens and transfer them via the Bitcoin network.

One unique feature of ARC20 is its built-in naming system. Once a name is used, it is unique across the network and cannot be duplicated. For example, if a Token is named "ATOM", there will not be a second ARC20 Token using the same name.

It is worth noting that the ATOM Token discussed here is completely different from the ATOM on the Cosmos network. The ATOM based on the Atomicals protocol is a community-native ARC20 Token, with no pre-mining, no team holdings, and no fundraising. It is issued through distributed CPU mining (using Bitwork PoW), showcasing a distribution method for a non-pre-mined Token. As one of the early native ARC20 Tokens, it holds an important symbolic position in the ARC20 ecosystem.

Although the Atomicals protocol and ARC20 Token demonstrate great potential, investors should proceed with caution and fully understand the associated risks. The digital asset market is ever-changing, and personal judgment and risk control are crucial.