On May 9, 2023, BRC-20 Bitcoin tokens reached a significant milestone, with their total market capitalization surpassing $1 billion. This milestone is a testament to the growing popularity of BRC-20 tokens, which employ a novel form of fungible token that uses Ordinals and Inscriptions to create and manage token contracts, token minting, and token transfers on the Bitcoin base chain.
According to analysts at multichain wallet BitKeep, the Ordinals numbering system assigns a unique number to each satoshi, or 0.00000001 Bitcoin (BTC), allowing for its tracking and transfer. On the other hand, the “inscription” process adds a layer of data to each satoshi, enabling users to create unique digital assets on the Bitcoin blockchain. The BRC-20 token standard was developed by a Twitter user known as Domo on March 8, 2022.
Compared to Ethereum, Bitcoin has been lagging in the deployment of token standards, with only a few notable ones like ERC-20 and ERC-721. However, BRC-20 tokens have been gaining traction since its inception, with over 14,000 tokens currently deployed on the Bitcoin blockchain. Despite this progress, Domo, the creator of BRC-20, has openly stated that the standard is “worthless” and that users should not waste money on “mass minting this fun experiment.”
Nevertheless, the growing adoption of BRC-20 tokens by traders and investors has led to a surge in trading volume, with a total trading volume of $207.7 million recorded in the past 24 hours. Notable tokens like ORDI, NALS, VMPX, PEPE, and MEME have experienced significant price variance within the past day, ranging between +11% and -55%.
As the adoption of BRC-20 tokens continues to grow, it remains to be seen how this new standard will fare in the highly competitive and rapidly evolving cryptocurrency market. Nonetheless, the development of the BRC-20 token standard highlights the potential of the Bitcoin blockchain to support new and innovative financial instruments beyond its traditional role as a store of value.