Ordinals and the BRC-20 Standard: Overview and Risk Analysis

This report explains the Ordinals protocol and the BRC-20 token standard on Bitcoin—how tokens are inscribed, minted, transferred, and traded—while describing enabling upgrades (SegWit, Taproot) and related projects (Runes, ARC-20, Taproot Assets). It highlights security and operational risks including protocol-level vulnerabilities (e.g., BRC-20 pinning attacks), centralization and indexer dependence, network congestion and fee spikes, and examples of real-world impact such as Binance pausing ORDI withdrawals and a >$1M Unisat double-spend loss, urging caution and further maturation of the ecosystem.