As of May 3, 2023, the Bitcoin blockchain has witnessed over 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. The BRC20 tokens have been developed by leveraging the Ordinals protocol, which allows creators to mint fungible crypto assets on-chain with ease.
To create a BRC20 coin, individuals need to encode a JSON data object containing critical token information, including fundamentals such as the token’s name, symbol, and total supply. The issuance of over 10,500 BRC20 tokens leveraging the Ordinals protocol has led to a backlog of over 200,000 unconfirmed transactions in Bitcoin’s mempool.
The surge of Ordinal inscriptions and BRC20 tokens has led to an increase in Bitcoin’s average and median transaction fees. On May 3, 2023, the average on-chain Bitcoin transaction fee was 0.00025 BTC or $7.05 per transaction, equating to roughly 0.0000011 BTC per byte. The median-sized transfer fee was 0.00012 BTC or $3.46 per transaction.
The BRC20 token economy has witnessed tokens skyrocketing with quadruple-digit gains. A comprehensive list of these 10K+ BRC20 coins can be found at ordspace.org, displaying each token’s value in US dollars. The market capitalization of the BRC20 token economy stands at a remarkable $95 million, with notable examples such as 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.
The rise of BRC20 tokens and Ordinal inscriptions has reignited a heated debate. Some argue that the fungible tokens and non-fungible token (NFT) concepts built on BTC justify confirmation alongside financial transactions. However, the surge of unconfirmed transactions and high transaction fees in Bitcoin’s mempool brings to light the need for further optimization and scalability solutions for the Bitcoin network.
Despite the challenges, the growing trend of creating fungible tokens on the Bitcoin blockchain using the Ordinals protocol offers promising potential for the cryptocurrency ecosystem, allowing for greater flexibility and innovation.
Overall, while the surge in BRC20 tokens and Ordinal inscriptions has created challenges for Bitcoin, it also showcases the growing diversity and innovation within the cryptocurrency space. The cryptocurrency ecosystem is constantly evolving, and it will be exciting to see how these developments shape the future of Bitcoin and other digital assets.