What are BRC-20 Tokens: The cause of Bitcoin congestion

BRC-20 entered the chat, and with this, the big question lies ahead, will everything eventually return to Bitcoin? Before we dive in, here’s a simple breakdown of the BRC-20 token craze happening on the Bitcoin blockchain:

TLDR;

• Launched in March 2023 by domodata, it uses the Ordinals protocol.
• BRC-20 is a new token standard for issuing and transferring fungible tokens on Bitcoin.
• There are more than 14,307 BRC-20 tokens, and they are currently congesting the Bitcoin blockchain, causing issues like halted bitcoin withdrawals on Binance and increased transaction costs in Africa and South America.
• Most BRC-20 tokens created so far are "memecoins”, and they gained massive popularity following the PEPE meme coin craze.
• Limited features compared to Ethereum's ERC-20 tokens, as Bitcoin's base layer doesn't support smart contracts.

Following the Ordinals hype, BRC-20 emerged as an experimental token standard on Bitcoin for fungible tokens. It resembles the well-known ERC-20 standard but lacks the ability to interact with smart contracts. In the example below, we can see the various elements of a BRC-20 token inscription:

• "p": Represents the BRC-20 token standard used for issuing the tokens.
• "op": Indicates the operation being executed in the transaction, which is to deploy or initialize the "ordi" tokens.
• "tick": Specifies the ticker symbol for the tokens, which is "ordi."
• "max": Sets the maximum supply of "ordi" tokens at 21,000,000.
• "lim": Establishes the maximum number of "ordi" tokens that could theoretically be minted in a single transaction, capped at 1,000.

You’re probably thinking, what’s the utility? There’s none at the moment, but despite that its growth continues to soar since web3 is all about hypebeast culture. The future of BRC-20 tokens remains uncertain, as developers have attempted to use Bitcoin's base layer for fungible token issuance before, but with limited success. Again, there are not many utilities for these tokens rather than being meme tokens. High transaction fees and limited programmability have pushed users towards Ethereum, and this is currently happening to Bitcoin, hence layer 2 like Stacks, Lightning and others could take the spotlight.

As the BRC-20 token craze unfolds, the future of Bitcoin and its adaptability to new use cases remains a hot topic. Don't miss out on the latest developments in the web3 world; join the Ryder waiting list today and stay ahead of the curve.