In the world of cryptocurrency, BRC20 tokens have emerged as the latest trend that is changing the game. While some of these tokens have serious applications, the majority of them are meme coins, like MEME and PEPE.
In this article, we will delve deeper into what BRC20 tokens are, their popularity, public perception, and whether or not you should invest in them.
BRC20 tokens are tokens created on the Bitcoin blockchain using the Ordinals protocol. Inspired by the ERC20 tokens created on the Ethereum network, BRC20 tokens are fungible tokens that allow developers to build and transact tokens using the Bitcoin Ordinals protocol. The protocol enables users to inscribe data on a satoshi, creating an NFT on the Bitcoin blockchain.
BRC20 tokens have been gaining popularity since their introduction in March 2023. With the majority of them being meme coins, a total of roughly 8,500 different tokens have been minted on the BRC20 standard .
May 2023 saw the market capitalization of BRC20 tokens being roughly $120 million, which represents a 600% surge in the last week alone.
During its peak on May 1, BRC20 tokens had 366,000 transactions, resulting in the number of transactions on the entire network being brought to 2.36 million.
BRC20 tokens are definitely still considered to be “experimental”, but they are seen by some as an exciting opportunity to get into a new area of crypto that is still in its early stages. This is because BRC20 tokens provide a solution to Bitcoin's rather limiting functionality, which is the absence of smart contract capabilities.
BRC20 tokens enable the creation of fungible tokens that can be traded and transferred like any other asset on the Bitcoin blockchain. This is a result of providing a standardized token protocol.
BRC20 tokens are still in their experimental phase, therefore it is very important to understand that BRC20 tokens may lack the same longevity or importance as other more established tokens.
As much as this is an exciting new development for tokens based on the Bitcoin protocol, it is still much too early to consider BRC20 as the "standard" for Bitcoin-based tokens. We stress the importance of exercising caution and not get swept up into hype, regardless of the investment.
BRC20 tokens have garnered a lot of attention in recent months. While they offer a new layer of functionality to the Bitcoin network, they are still considered experimental and may not have the same longevity as other more established tokens.
As with any investment, it's important to do your research and understand the risks involved before investing in BRC20 tokens or any other cryptocurrency.