BRC-20 Tokens: Surprising Success Prompts Debate & Adoption Among Wallet Providers
Summary:
The BRC-20 token standard, an innovative extension to the Bitcoin blockchain allowing for the creation of assets such as non-fungible tokens, has been causing waves since its inception by developer Domo in March 2023. Despite initial skepticism by some wallet providers, the BRC-20 tokens now have a total market cap exceeding $1.5 billion. Some companies, including Bitget Wallet and OKX, are already supporting these tokens within their services, seeing it as a significant development for Bitcoin's future ecosystem. However, the current need for broader infrastructural wallet support for these tokens remains a key issue.
Casey Rodarmor, a Bitcoin developer, introduced the Bitcoin Inscriptions process a year ago, which allows users to encode metadata on Satoshis, Bitcoin's smallest unit. This concept, in combination with Bitcoin Ordinals, a system that permits the minting of exchangeable tokens on the Bitcoin blockchain, led fellow developer Domo to establish the BRC-20 token standard in March 2023. This new standard, echoing the functionality of ERC-20 Ethereum tokens, enables the creation of assets such as non-fungible tokens directly on Bitcoin, marking a significant advancement in a blockchain that's nearly 15 years old. Since its inception, BRC-20 tokens have outperformed expectations, with a total market cap exceeding $1.5 billion and a trading volume of $337 million in the past 24 hours as of the time this article was written.
Despite the unexpected success of BRC-20 tokens, Domo originally envisioned the standard as a creative, experimental design. Some standard wallet providers have expressed skepticism about this innovation, despite BRC-20 assets being widely listed on centralized exchanges. Representatives from Trezor and MetaMask have both stated that while they're open to supporting BRC-20 in the future, currently these tokens are not integrated into their platforms.
However, Bitget Wallet's COO, Alvin Kan, announced that they plan to introduce Bitcoin Ordinals market and support BRC-20 token swaps within their own wallet, as well as various inscription-based features. Despite reservations about their value given Bitcoin's block size and transaction throughput limitations, Kan stated that BRC-20 assets bring meaningful innovations, addressing pressing concerns about scaling performance and DeFi applications. Shortly after its creation, OKX added BRC-20 assets to its wallet, allowing users to buy, sell, list, and transact the tokens directly within the app.
Kan mentioned that the current market has a shortage of comprehensive infrastructural support from wallets, which is a key requirement. The only known native BRC-20 wallet providing full token support currently is the UniSat Wallet, which is engaged in a disagreement with its creator over a proposed hard fork.
Discussing the prospects for the Bitcoin ecosystem in 2024, Kan pointed out that despite being an almost 15-year old blockchain, Bitcoin still possesses a significant competitive advantage over newer blockchains in terms of asset security and stability. Regardless, in areas of technological innovation like DeFi and GameFi, Bitcoin fails to match up to other blockchains like Solana and Ethereum.
Inquiries to Trust Wallet and Ledger for commentary were unanswered by the time of publication. The growth of BRC-20 has been hailed as a pivotal development for Bitcoin in 2023 by Binance Research.
Published At
1/25/2024 8:12:48 PM
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