Bitcoin maxis are scratching their heads as meme coins are being launched on the Bitcoin network. But that’s not all, the BRC20 token standard is making waves across crypto markets and stealing the show from recent moon coins like PEPE and WOJAK.
Until recently the Bitcoin blockchain was somewhat of a boring place. It lacked innovation and interesting functionality. Recently, however, we have seen an explosion in the form of BRC20 tokens whose total market cap has increased over 600% in the past week and have boosted the Bitcoin network fees to levels not seen since 2021.
A very short history of BRC20
BRC20 is a token standard same, same, but different to that from Ethereum’s ERC20 standard. Built on the Bitcoin Ordinals protocol it allows for the creation of fungible tokens on the Bitcoin network. BRC stands for “Bitcoin request for comment” and was launched on March 8th 2023 by @domodata who built the standard based on an idea put forward by @redphonecrypto just a few days earlier. Here is the tweet that made history.
What is currently happening with BRC20?
This new token standard was all made possible thanks to the Ordinals protocol, which is used to inscribe data onto the Bitcoin blockchain. This allows users to create a variety of digital assets in the form of images, audio, text and even video and inscribe them onto a satoshi (0.00000001 BTC) using JSON code. Once this JSON code is inscribed onto a Satoshi and deployed it can be transferred between users with “relative” ease.
In order to use the BRC20 standard a user will first need a Unisat wallet which comes in the form of a Chrome browser extension. Simply head on over to Unisat.io to download and create a wallet. This wallet can then be used to access the marketplace where you will be prompted to mint 20 Unisat tokens to gain entry. These can be minted in the BRC20 tab and set to repeat 20 times.
To deploy a token on the Unisat wallet you need to select the “Inscribe” tab followed by BRC20 then simply fill out the relative information and voila! The Unisat wallet can also be used to mint tokens and transfer them to other users. However, because you need to first inscribe the transfer function to your wallet before being able to send the inscription you will have to pay 2 sets of fees, and these fees are growing fast. Although nothing compared to the dreaded gas fees we have seen on Ethereum lately. Nonetheless, hardcore Bitcoiners are not very happy chaps right now.
Some interesting BRC20 data points
As we can see the number of inscriptions is currently growing in an exponential fashion.
BRC20 transactions are dominating the Bitcoin network in terms of usage. Now making up more than half the current volume.
Most of these transactions are currently mint functions and this is to be expected as the market is flooded with new tokens. One could expect to see this change over time and that transfers of tokens will eventually take the lead.
Projects on BRC20
There are currently more than 14,000 projects deployed in the BRC20 standard, an impressive amount in such a short span of time! The first of these was the ORDI token which currently boasts a market cap of over $450 million and allows a maximum of 1,000 tokens per mint with a total of 21,000,000 tokens to ever exist. ORDI’s first mover advantage means it currently holds the top spot of BRC20 tokens in terms of both market cap and volume.
Other notable projects include $PIZA, $VMPX, and yes, you guessed it, everyone’s favourite meme coin $PEPE (not the original obviously!). A full overview of tokens can be seen on ordspace.org.
So, what are the pros and cons?
Let’s start with the good news…
Obviously, this new narrative brings some much-needed attention to the previously mundane Bitcoin network, this can only be a good thing going forward. Not only this but all this new attention means higher transaction fees for Bitcoins miners, this may in turn incentivise more miners to join the network making Bitcoin more secure and making current mining companies more profitable (potential alpha right here).
The long-standing argument that once Bitcoin block rewards aren’t sufficient enough to incentivise miners to stick around and only earn transaction fees, could have its trump card in the form of Ordinals and BRC-20s.
The fungibility of these tokens means they would be easily traded on exchanges. Huboi has already jumped on board and the next question is “wen Coinbase or Binance?”
Now for the not-so-good news…
BRC20 is still considered experimental and many are already saying it won’t last the test of time like ERC20 has on Ethereum. Much of this has to do with the fact that BRC20 tokens have limited functionality and therefore use cases when compared to intricate and smart-contract-capable ERC20 tokens. A lack of decentralized exchanges for the tokens may also prove a headwind for fast-paced adoption, although so far that doesn’t seem much of an issue!
BRC20 is here whether you like it or not. Birthed from an idea discovered on the bird app into an entire ecosystem that is currently dominating the godfather of coins, one can only be excited to see what this new standard will become in due time.
It’s certainly moving at breakneck speeds, we now have SRC20 tokens and with the pace of crypto, we will probably have every letter of the alphabet RC tokens before soon!
The tweet that started it all
Redphone crypto tweet about creation idea
Wallets and marketplaces