The BRC-20 token standard, modelled after Ethereum’s ERC-20 tokens, has become a hot topic in the crypto scene, particularly after the Pepe meme coin’s recent rise. With 8,500 different tokens now minted using the standard, most are meme coins like Pepe and Meme. BRC-20 represents an experimental token standard on the Bitcoin blockchain and enables programmers to mint and send fungible tokens through the Ordinals protocol.
While it shares similarities with Ethereum’s ERC-20, the BRC-20 token standard has key differences. For instance, it does not employ smart contracts and requires a Bitcoin wallet for minting and trading tokens. The standard was established in March by an anonymous on-chain analyst known as Domo, aiming to facilitate the issuance and transfer of fungible tokens on the Bitcoin blockchain.
Witnessing a market cap explosion of 600% just in the past month, the total value of BRC-20 tokens now stands at $120 million. A surge in the popularity of these tokens has even surpassed the original number of Bitcoin transactions on the blockchain, with BRC-20 transactions making up for more than 50% during April 29 and May 2.
On May 1, the BRC-20 token volume peaked with 366,000 transactions, and the network has since handled a total of 2.36 million transactions. Transaction fees have also experienced a substantial increase due to the token activity — since late April, the network has generated an additional 109.7 BTC in transaction fees for miners.
Despite its rapid growth and the popularity among crypto enthusiasts, it is essential to maintain a healthy dose of skepticism concerning the BRC-20 token standard. One could question what the sudden explosion of interest might entail for the long-term sustainability and security of the Bitcoin network.
Moreover, the meme coin frenzy that initially dominated the Ethereum blockchain has now spread to the Bitcoin network through the BRC-20 standard. This phenomenon has caused Ethereum network gas fees to skyrocket and resulted in network congestion.
With the BRC-20 frenzy comes both excitement and caution simultaneously. A trend exhibiting such accelerated growth must be carefully analyzed for its implications on Bitcoin network and the entire crypto ecosystem. Ultimately, it remains to be seen how long this wave will last and what sort of impact it may have in the long run.