Atomicals Protocol and ARC20 Tokens: Emerging Digital Asset Standard on the Bitcoin Network

The Atomicals protocol is an innovative protocol built on the Bitcoin network that allows users to create, transfer, and upgrade various digital assets on the Bitcoin blockchain. These assets include non-fungible tokens (NFTs) such as digital artworks, in-game items, digital identities, and domain names, as well as fungible tokens (FT).

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

The design philosophy of the Atomicals protocol is to regard the Bitcoin network as a trusted source of truth, aiming to achieve personal ownership and control of digital assets. This approach provides the necessary ownership management foundation for the era of digital-native assets.

Due to its high compatibility with the Bitcoin network and relatively simple implementation, the Atomicals protocol has received widespread attention and favor from the technical community. NFTs built on this protocol can be created and transferred directly on the Bitcoin network without relying on indexers or other intermediaries, nor does it require modifications to the underlying Bitcoin itself or the introduction of second-layer solutions.

ARC20 is a striking component of the Atomicals protocol. It is a fungible token standard supported by Satoshis, with each ARC20 token having 1 Satoshi as the minimum value unit. This means that the value floor of an ARC20 token is 1 Satoshi. ARC20 tokens can be freely minted, transferred, and can leverage existing Bitcoin infrastructure, such as wallets.

ARC20 also features a globally unique naming system. Once a name is used, it cannot be used by other ARC20 Tokens, ensuring the uniqueness of each token name. Users can set multiple parameters for ARC20 Tokens, including name, minting rewards, total supply, starting block height, and metadata.

In the ARC20 ecosystem, the ATOM Token (note that this is different from the ATOM of the Cosmos network) is a striking example. It is an early ARC20 Token minted through the Atomicals protocol and is regarded as the flagship Token of the ecosystem. It is claimed that the ATOM Token has no pre-mining, no team control, and no financing, but relies entirely on community-driven efforts to be sustained through distributed CPU mining (using Bitwork PoW).

Although the Atomicals protocol and ARC20 Token demonstrate innovative potential, investors and users should still exercise caution, fully understand the associated risks, and maintain independent judgment. It is crucial to conduct comprehensive risk assessment and management when participating in any emerging technology or financial product.