In March, a developer named Domo introduced the BRC20 token standard to the Bitcoin community, which has been the topic of conversation ever since. The BRC20 tokens use the Ordinals protocol, allowing creators to mint fungible crypto assets easily on-chain. To create a BRC20 token, an individual must encode a JSON data object containing essential token information, such as the token’s name, symbol, and total supply. This process is similar to an ERC20 token contract on Ethereum.
Impressive Issuance and Market Valuation
The issuance of over 10,500 BRC20 tokens and 3 million Ordinal inscriptions has resulted in a backlog of more than 200,000 unconfirmed transactions in Bitcoin’s mempool. A comprehensive list of these tokens can be found at ordspace.org, displaying each token’s value in US dollars. The BRC20 token economy has seen remarkable growth, with tokens skyrocketing with quadruple-digit gains. Notable examples of these tokens include ordi, $OG$, PEPE, MEME, PUNK, SHIB, and DOMO. The ordi market cap is currently hovering above $52 million, while 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.
Backlog and Fee Increase
The massive issuance of BRC20 tokens and Ordinal inscriptions has caused Bitcoin’s average and median-sized fees to soar, sparking a heated debate over whether fungible tokens and non-fungible token (NFT) concepts built on BTC justify confirmation alongside financial transactions. According to data from bitinfocharts.com on May 3, 2023, the average on-chain 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.
In conclusion, the introduction of the BRC20 token standard has sparked conversations and debates in the Bitcoin community. The impressive issuance and market valuation of BRC20 tokens have resulted in a backlog of unconfirmed transactions and an increase in fees. While some argue that fungible tokens and NFTs built on BTC justify confirmation alongside financial transactions, others disagree.