As of May 3, 2023, the Bitcoin blockchain has witnessed a staggering 3.35 million Ordinal inscriptions, and a new experimental token standard known as “Bitcoin Request for Comment,” or BRC20, has garnered substantial attention in the past week. With 10,487 BRC20 tokens built using Ordinals and a swelling market capitalization exceeding $95 million, this new development has the crypto world buzzing.
The Bitcoin community is abuzz with conversations surrounding the BRC20 token standard after its introduction by a pseudonymous developer named Domo in March. BRC20 tokens leverage the Ordinals protocol, enabling creators to mint fungible crypto assets onchain with ease. To create a BRC20 coin, individuals need to encode a JSON data object containing critical token information. Like an ERC20 token contract on Ethereum, this data would encompass fundamental details such as the token’s name, symbol, and total supply.
The impressive issuance of over 10,500 BRC20 tokens — alongside the surge of Ordinal inscriptions surpassing 3 million — has led to a backlog of over 200,000 unconfirmed transactions in Bitcoin’s mempool. A comprehensive list of these 10K+ BRC20 coins can be found at ordspace.org, displaying each token’s value in US dollars. Currently standing at a remarkable $95 million, the BRC20 token economy has witnessed tokens skyrocketing with quadruple-digit gains.
Notable examples of these tokens include ordi, $OG$, PEPE, MEME, PUNK, SHIB, and DOMO. The ordi market cap today is hovering above $52 million; the $OG$ token market cap sits at $7.9 million, and the PEPE BRC20 coin’s market valuation rests at $8.3 million as of May 3, 2023. This rise of BRC20 tokens and Ordinal inscriptions, predominantly comprised of text, has driven Bitcoin’s average and median-sized fees to soar. Data from bitinfocharts.com on May 3, 2023, reveals that the average onchain Bitcoin transaction fee is 0.00025 BTC or $7.05 per transaction, equating to roughly 0.0000011 BTC per byte. Additionally, the median-sized transfer fee is 0.00012 BTC or $3.46 per transaction, according to metrics compiled by bitinfocharts.com.
The flood of BRC20s and Ordinal inscriptions has ignited concerns about whether the fungible tokens and non-fungible token (NFT) concepts built on BTC justify confirmation alongside financial transactions. On one hand, this innovative technology appeals to creators and investors alike; on the other, the high transaction fees and backlog of unconfirmed transactions pose dilemmas for the broader crypto community. Enthusiasts may argue that this technological growth is a natural part of the blockchain’s evolution. However, skeptics may contend that these high fees and backlogs hinder the practical usage and adoption of cryptocurrencies.
As the ORD-, BRC20-, and NFT-related market caps continue to rise, the ongoing discussion over the merits and drawbacks of these burgeoning technologies remains critically important. Only time will tell if this trend will bring significant growth or create complexities for the Bitcoin industry. But for now, these fascinating developments continue to captivate the attention of crypto enthusiasts worldwide.