The Mematic Ascension of BRC-20 Tokens

Memecoins, which are supplied on the Bitcoin network, are an intriguing new phenomenon that is reviving crypto markets.

What began two months ago as an experimental token standard built on top of ordinal inscriptions has quickly become the next fad, with daily trading volume topping $200 million and a total market cap of over $500 million.

meme coin, pepe coin

meme coin

What exactly are BRC20 tokens?

In short, the BRC-20 token standard enables the minting and transfer of fungible tokens on the Bitcoin blockchain by utilizing Bitcoin ordinal inscriptions. It is based on the ERC-20 token standard, which is the current standard for creating fungible tokens on the Ethereum network. It all started with an experiment by Domo, a pseudonymous Dune analyst, and programmer, and swiftly cleared the path for thousands of meme coins to reside within the metadata of individual satoshis.

To give some conceptual scaffolding, the Bitcoin Ordinals protocol is a way for counting satoshis (each bitcoin is made up of 100 million satoshis) by assigning a serial number to each satoshi and tracking it between transactions. Inscriptions are blobs of arbitrary data with associated metadata, the latter of which directs a Bitcoin node on how to render the data (i.e. graphics, text). They operate in tandem with the Bitcoin network, similar to smart contract tokens on the Ethereum blockchain. The two are used in tandem to provide the BRC-20 token standard, which consists of JSON object inscriptions that specify every aspect of the token, including minting, balances, and distribution. Once deployed, the Bitcoin network decodes this information — and for those who are concerned, because it is merely a random piece of data running parallel to the network, Bitcoin is unaffected if BRC-20 tokens or the protocol itself fail.


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What is the present state of the market?

At the time of writing, there are 14,450 different BRC-20 tokens minted, with $206 million in 24-hour trading volume and a market cap of $500 million - which is incredible given that no wallet or trading infrastructure is more than two months old, and many of the coins are still traded on a peer-to-peer basis. Here are some of the most recent tokens that have been driving this incredible growth, as well as some that may continue to stoke the fire:

$ORDI - Currently traded on CoinEx and BitGet, among other CEXs, ORDI is the first BRC-20 token ever produced, having a maximum supply of 21 million and a market volume of $107 million. It benefits from being the first BRC20 token on Bitcoin.

$PEPE - You may have seen PEPE recently take over social media, hitting a market cap of $1.6 billion at one point, making overnight billionaires, and attracting a community of like-minded degens. It is based on Matt Furie's popular internet meme Pepe the Frog. PEPE exists on both Ethereum and Bitcoin, expanding its memetic reach to both communities and ushering in "meme-coin season."

MEME 0.00 - The $MEME token, which is now trading at over $90 with +$2 million in trading volume, is exactly what it sounds like.

A few others include: $NALS, $PIZA, $BANK, OSH 0.00 I, $DRAC đź‘€

How to Purchase, Store, and Exchange Them

Users can purchase, store, and sell BRC-20 tokens in two methods. BRC-20 tokens are available for purchase and sale on controlled exchanges such as Binance and Gate.

However, in keeping with the crypto ethos/fashion, we advocate transacting with BRC-20 tokens in self-custodial wallets. We'll go over how to make your wallet, buy BRC-20 tokens, transfer them, and even mint and deploy them. To manage BRC-20 tokens, you will require an ordinals compatible wallet (taproot wallet) address, such as Hiro, Unisat, or OrdinalsWallet:

Hiro - wallets were created to manage STX tokens, a smart contract technology built on top of the Bitcoin network. Navigate to https: /wallet.hiro.so/ and click 'Install Hiro Wallet' (you may use the browser extension or the Desktop program) and follow the instructions to back up your secret key, create a password, and configure your wallet. You may learn how to deploy, mint, store, and transfer BRC-20 tokens with Hiro's new wallet upgrade (v4.21.1) by following this tour.

UniSat - UniSat provides users with a full BRC-20/Ordinals experience, including a wallet and a marketplace where they can trade or buy BRC-20 tokens in a peer-to-peer exchange. To get the wallet, go to https: /unisat.io/. Unless you are technically adept, we recommend using the Chrome browser extension. The UniSat UI allows you to inscribe satoshis, search for tokens, and buy/sell BRC-20 tokens.

OrdinalsWallet - One of the first wallets designed to accept ordinal inscriptions, OrdinalsWallet allows users to store, transfer, and receive Bitcoin Ordinal NFTs. It is now possible to trade BRC-20 tokens on their marketplace. visit build a wallet and buy or sell BRC-20 tokens, go visit https: /ordinalswallet.com/brc20.

Last Thoughts

BRC-20 tokens can increase the utility of the Bitcoin network and attract new users. However, it is crucial to note that BRC-20 tokens are currently experimental and in their early stages of development.

Aside from the obvious novelty, the BRC20 token narrative has a few advantages. For example, some supporters now see the Bitcoin network as a settlement platform, rather than just a (financial) transactional network, where all economic activity will eventually inherit the Bitcoin network's security qualities. Some argue that creating tokens on the Bitcoin network also allows for the onboarding of a new cohort of users and degens, providing miners with an additional source of fee revenue that can be used to offset decreasing network security budgets due to halving periods (for example, after the Bitcoin halving in 2024, miner revenue can be sustained with fees from BRC20 transactions).

BRC-20 tokens, on the other hand, have made the Bitcoin network a victim of its success, and disputes have raged about the net consequences ordinals and BRC20 tokens have on the Bitcoin network. According to Satoshi Nakamoto's initial white paper, BRC-20 meme coins are effectively spam, cluttering up a network built for sound money and peer-to-peer payments. About filling blocks with arbitrary data, Satoshi said in 2010 that "Piling every proof-of-work quorum system in the world into one dataset doesn't scale" (this was about BitDNS). Some believe that putting BRC-20 tokens and ordinals on the blockchain reduces Bitcoin’s general fungibility because satoshis are essentially "marked" for NFTs and tokens, cannibalizing the BTC supply and its value proposition as interchangeable units of money. This has sparked a culture war between holders of ordinals/BRC-20 tokens and Bitcoin purists who feel the Bitcoin network should maintain its primary concept of providing peer-to-peer money without a centralized issuer.

Ordinals and BRC-20 holders, on the other hand, argue that Bitcoin can evolve into a settlement network and that concerns about fungibility and network congestion are exaggerated. Some have pointed out that there is still idle block space, which reflects economic inefficiency, and that BRC-20 tokens ensure that value density on each block is maximized. Holders further believe that adding tokens to the Bitcoin network contributes to the general growth of the crypto user base and serves as another way to onboard new users and arouse interest. Others just believe that Bitcoin maximalists are a bunch of buzzkills who are ruining everyone's fun with their sad violin music of maximalist rhetoric.

BRC-20 tokens have made huge advances into the crypto-verse, whether you see them as a creative extension of utility or a serious threat to the Bitcoin network's essential principles. Money talks, and in the case of bitcoin meme coins, money has been talking to the tune of $500,000 and counting – so keep your ears to the ground for more developments in the world of BRC-20 tokens!

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#web3#cryptocurrency#bitcoin#brc-20#ordinals
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