The recent surge in interest towards Bitcoin Request for Comment (BRC-20) tokens has caught the attention of many in the crypto world. Built with Ordinals and stored on the Bitcoin base chain, the combined market cap of over 8,800 BRC-20 tokens is an impressive $137 million, showcasing a whopping 682% rise from its $17.5 million value a week ago. This increase in market value is astounding, though some may argue that it is a result of low liquidity in some of the tokens, as suggested by Ordspace.
Created in early March by a pseudonymous on-chain analyst named Domo, the BRC-20 token standard facilitates the issuance and transfer of fungible tokens on the Bitcoin blockchain. Interestingly, this experimental invention came into existence just weeks after the launch of the Ordinals Protocol, allowing users to inscribe digital art references into small transactions on the Bitcoin blockchain.
Although the term BRC-20 may seem similar to the popular ERC-20 standard, it is essential to note that the two are different, with BRC-20 tokens lacking the ability to interact with smart contracts. ERC-20, on the other hand, is a technical standard for fungible tokens created using Ethereum, which is widely known as the premier smart contract blockchain.
According to crypto exchange Binance, BRC-20 tokens differ from ERC-20 tokens as they use a script file stored on Bitcoin to attribute tokens to satoshis instead of relying on smart contracts to manage the token standard and its rules. This allows the tokens to be transferred between users without the need for smart contract interaction.
The BRC-20 market’s rapid surge in value is worth mentioning; however, skeptics should also note that the most active BRC-20 tokens are centered around meme coins – cryptocurrencies originating from an internet meme or humorous characteristic. The top three coins minted using the BRC-20 standard are ORDI, OG, and PEPE.
Mark Jeffrey of the Boolean Fund suggests that the BRC-20 launch has eliminated the need for crypto exchanges. He mentioned in a tweet that the Bitcoin blockchain is now the exchange, without the need for Binance or Coinbase. A Bitcoin wallet is sufficient for creating, buying, and selling BRC-20 tokens using satoshis, with Bitcoin now functioning as gas.
While the future of BRC-20 tokens remains uncertain, their rapid rise in popularity is a testament to the ever-expanding and evolving world of cryptocurrency and blockchain technology. However, only time will tell whether this growth will continue or fizzle out as quickly as it emerged.