The BRC-20 token standard and the surge of meme coins and hype around it have significantly increased activity on the Bitcoin network. In just four days, the market cap for BRC-20 tokens skyrocketed from $95 million to nearly reaching $1 billion in value, while the number of pending Bitcoin transactions hit a new all-time high of 400,000.
What is the BRC-20 token standard?
The BRC-20 token standard, which stands or ‘Bitcoin Request for Comment’, is analogous to Ethereum’s ERC20 and facilitates the issuance of fungible and non-fungible tokens (NFTs) via the Ordinals protocol, created by Bitcoin developer Casey Rodarmor.
The ordinal inscriptions enable encoding of critical token information such as the token’s name, symbol, and supply directly onto the Bitcoin blockchain. In contrast to ERC20 tokens, BRC-20 tokens do not employ smart contracts and instead require a Bitcoin wallet for minting and trading on-chain.
Notable examples of BRC-20 tokens
The leading BRC-20 tokens are mostly meme tokens, with Ordi as the standout star token. These top tokens dominate the BRC-20 market cap, though hundreds of other BRC-20 meme coins and BRC-20 NFTs have also launched on Bitcoin recently.
Some of the most popular BRC-20 tokens are:
- Ordi: This is the leading BRC-20 token with a market cap of $400 mil. Each Ordi token goes for $9.46.
- Pepe: The classic meme token Pepe is worth over $30 mil.
- Piza: Piza is a pizza-themed BRC-20 token with nearly $25 mil market cap.
- Meme: Obviously, Meme is a meme token worth $15 mil.
- Moon: Moon is a space token worth almost $13 mil.
The top 5 BRC-20 tokens, which include Ordi, Pepe, Piza, Meme, and Moon, account for a whopping 86.55% of the total BRC-20 token market cap. Source: BRC-20.io – BRC-20 tokens market cap | Scanner | Marketplace
The BRC-20 effect on Bitcoin
The recent launch of the Ordinals protocol, which facilitates the BRC-20 token frenzy on Bitcoin, is the primary catalyst of network congestion and soaring high fees, with average on-chain Bitcoin transaction fees of 0.00025 BTC or $7.05 and median transfer fees of 0.00012 BTC or $3.46.
Over 455,000 transactions currently await confirmation in Bitcoin’s transaction mempool, largely accredited to a surge in Ordinals inscriptions. This has harbored fears of potential denial-of-service (DoS) threats against the network and the fear of malicious actors exploiting the situation.
Binance forced to halt BTC withdrawals
As the fees were bogging down the network and causing delays, the global cryptocurrency exchange Binance had to halt Bitcoin withdrawals twice due to the network getting backed up and fees skyrocketing, stated by the Binance CEO, Changpeng Zhao.
In conclusion, the BRC-20 token standard and associated surge in meme coins has produced both opportunities and challenges for the Bitcoin network. On the one hand, the BRC-20 economy is generating new revenue streams for miners and highlighting possibilities for token models on Bitcoin. But the proliferation of BRC-20 tokens has also strained network capacity, inflated fees, and raised risks of attacks, at least temporarily introducing inefficiencies and vulnerabilities.