Bitcoin Ordinals and BRC-20 tokens: The Latest FOMO Trend in Crypto and What You Need to Know

By Cypherpunk0001 | Crypto01 | 10 May 2023


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Bitcoin's BRC-20 token standard is a new addition to the Bitcoin blockchain that could revolutionize the way users interact with the network. Traditionally, BTC has been the only cryptocurrency supported by the Bitcoin blockchain, but now users can create and mint Bitcoin-based tokens via the Ordinals protocol using the BRC-20 standard.

The BRC-20 token standard was created in March 2023 by an anonymous user named "Domo" (@domodata on Twitter). In the world of cryptocurrency, token standards dictate how and where a cryptocurrency can be used. There are various token standards across numerous blockchains, including ERC-20, BEP-20, TRC-20, and now BRC-20.

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The BRC-20 token standard is inspired by Ethereum's ERC-20 standard, which has become the most widely used token standard in the crypto market. Many popular tokens, such as Shiba Inu and Binance USD, use the ERC-20 standard. The core function of BRC-20 tokens is to allow users to trade fungible assets via the Ordinals protocol.

The Bitcoin Ordinals protocol was launched in January 2023, causing excitement in the Bitcoin community because of its potential to offer Bitcoin-based NFTs. The Ethereum blockchain is known for its NFT support, but the Bitcoin blockchain has never supported any crypto asset aside from Bitcoin itself. Some view this as a limiting factor to the Bitcoin blockchain's growth, and many Bitcoin users want new ways to use the blockchain.

The Ordinals protocol uses satoshis, a tiny fraction of one BTC, to work. Each BTC coin contains 100 million satoshis. Using this protocol, extra data can be inscribed onto a satoshi before it enters a transaction, allowing for extra data to be added to the transaction. Once the satoshi is inscribed with the extra data, it becomes an Ordinal. The inscription data contains a serial number that leads to the location of the Bitcoin-based NFT.

It's important to note that Ordinals are non-fungible, while BRC-20 tokens are entirely fungible. This difference makes BRC-20 tokens incredibly useful. With this standard, users can create and mint Bitcoin-based tokens via the Ordinals protocol, similar to how Ethereum users can create and mint tokens with the ERC-20 standard.

Since the launch of the BRC-20 standard, BRC-20 tokens have collectively reached a market cap of over $700 million, taking many by surprise. According to BRC-20.io, the 24-hour trading volume of the BRC-20 market has exceeded 200 million dollars. With over 14,000 BRC-20 tokens minted so far, it's clear that this standard is attracting many crypto enthusiasts.

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Speaking of fees, the massive use of the Bitcoin blockchain has led to high transaction fees. This has prompted exchanges to consider adopting scaling solutions such as the Lightning Network, which is a second-layer payment protocol that operates on top of the main blockchain. The Lightning Network allows for instant payments with very low fees, as transactions are conducted off-chain. By adopting such solutions, exchanges can offer their users faster and cheaper transactions while still leveraging the benefits of the underlying blockchain technology.

The popularity of BRC-20 tokens has been attributed to the hype amassed by Pepe Coin (PEPE). The Pepe Coin BRC-20 token reached a 24-hour trading volume of over half a million dollars at the time of writing. The token is a memecoin, meaning it is based on a popular internet meme. Other BRC-20 tokens have also gained prominence, such as ORDI, MEME, and MOON. You may not have heard of these coins before, as they're all very new.

Many Bitcoin Ordinal collections were quick to hop on the BRC-20 bandwagon, such as Ordinal Monkey Club. However, it's worth keeping in mind that this is still a very new token standard, so it'll take time to see whether it can gain a solid foothold in the crypto industry.

 

 

 

 

 

 

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Cypherpunk0001
Cypherpunk0001

Art lover. Interested in Crypto, NFTs and Financial Markets in general.


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