The BRC-20 token market cap has experienced an astronomical surge of 600% in the past week alone, outpacing standard BTC transactions on the network.
This has caused a massive uproar in the crypto ecosystem, mainly due to the rise of the Pepe (PEPE) meme coin in recent months.
As many as 8,500 tokens have been minted using the BRC-20 standard, most of which are meme coins such as PEPE and Memetic (MEME).
The BRC-20 token standard is an experimental concept on the Bitcoin blockchain, which takes its inspiration from Ethereum’s ERC-20.
It enables developers to create and transfer fungible tokens via the Ordinals protocol.
The Difference Between BRC-20 Tokens and ERC-20 Tokens
BRC-20 tokens differ from ERC-20 tokens in several ways. Firstly, BRC-20 tokens are stored on the Bitcoin base chain, while ERC-20 tokens are stored on the Ethereum blockchain.
Secondly, BRC-20 tokens are more like a clever script file on Bitcoin that uses Ordinal inscriptions of JSON data to deploy token contracts, mint tokens, and transfer tokens. ERC-20 tokens, on the other hand, are all about smart contracts.
Thirdly, BRC-20 tokens have fewer “bells and whistles” than ERC-20 tokens, as Bitcoin’s basic layer does not allow smart contracts.
Consequently, BRC-20 tokens are incompatible with various other applications, such as decentralized exchanges and borrowing and lending protocols.
BRC-20 tokens are experimental and innovative, which means they open new possibilities and use cases for Bitcoin, but they also have some disadvantages, such as less flexibility and functionality than smart contract-based tokens.
The BRC-20 token standard was first introduced in March of this year by an anonymous on-chain analyst called Domo to make fungible tokens tradable on the Bitcoin blockchain.
$120M Market Cap
According to a recent report, within the past month, the market cap of BRC-20 tokens has witnessed a massive explosion and currently stands at a whopping $120 million, a 600% increase from the previous week.
The BRC-20 token craze has even surpassed the number of original Bitcoin transactions, with the number of BRC-20 transactions on the Bitcoin blockchain reaching over 50% between April 29 and May 2, far outpacing regular BTC transactions.
On May 1, the BRC-20 token volume peaked at an astonishing 366,000 transactions, with the total number of transactions on the network being 2.36 million.
As a result of the massive increase in BRC-20 transactions, transaction fees have also skyrocketed. Since the network’s inception in late April, it has generated an additional 109.7 BTC in transaction fees for miners.
Is It Time to Invest?
As with any investment, it is essential to exercise caution and do your due diligence before investing in BRC-20 tokens that are currently pumping.
Most are meme tokens, which are often created as a joke or for fun, without any real underlying value or use case.
Their value is based mainly on hype and speculation, which can be volatile and subject to sudden drops. So, carefully consider the risks and potential rewards before investing in them.
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