Tokens on Bitcoin are becoming increasingly popular, but is there value behind the hype?
The Bitcoin Ordinals trend is getting traction 📈, to the point of impacting the very Bitcoin blockchain.
However, unlike the first months of the Ordinals NFT mania, the focus is shifting heavily towards fungible tokens of the so-called BRC-20 standard ⏺️⏺️⏺️
These tokens, which are in a way the Bitcoin-based alternative to Ethereum’s ERC-20, have now reached a market cap of over $616 million, and the most prominent example – $ORDI – was even listed on two exchanges this week.
Since the beginning of February, Bitcoin registered over 5.6 million Ordinals inscriptions, which have generated almost $30 million in fees.
For the last two weeks, Bitcoin transactions containing BRC-20 tokens have represented on average half of all Bitcoin transactions.
The Bitcoin network activity has spiked to unprecedented highs, with an average transaction fee reaching $30 this Monday and raising concerns about the networks’ congestion (one Bitcoin developer has even suggested blocking the Ordinals altogether).
The Ordinals are pieces of data inscribed into the “witness” part of a Bitcoin transaction, attributing special qualities to Bitcoin’s smallest units called satoshis.
There are now many services allowing to create and mint Ordinals just as easily as Ethereum-based tokens, and many wallets have included Ordinals functionality.
Ordinals is an innovative solution that allows to create tokens on the world’s most secure blockchain, but the important thing to remember here is that it only gives the vehicle for transferring value. The value itself depends on the concrete tokens and their ability to gain traction.
At their core, most Ordinals now are nothing but meme coins, which draw all their value from their community and the latter’s ability to sustain the hype (and possibly find some utility in future projects).
So while certainly interesting to play with, the Ordinals trend should be taken with a grain of salt 🧂