Memecoin trading overheating, bitcoin token standard “BRC-20” market expands rapidly

Expansion of the BRC-20 token market

The popularity of meme coins using BRC-20, which is the token standard of the crypto asset (virtual currency) Bitcoin (BTC), is soaring. The market capitalization of BRC-20 tokens is approaching ¥130 billion ($1 billion).

However, due to low liquidity and many technical issues, investors are required to make careful judgments and manage risks.

ORDI, the market-leading BRC-20 token, surged in value when it was launched on the overseas cryptocurrency exchange Gate.io on the 8th. It has increased 190 times in the past month. Considering the issuance limit of 21 million ORDI and the current token price, the market capitalization has reached approximately 54 billion yen ($400 million).

BRC-20 is an experimental framework for creating tradable tokens on Bitcoin, utilizing the Ordinal protocol. Since its introduction in March 2023, over 14,000 BRC-20 tokens have already been generated.

Currently, there is no ecosystem such as DeFi (decentralized finance), so tokens issued on the Bitcoin blockchain are mainly meme coins with jokes on the Internet as motifs.

Source: brc-20.io

Following ORDI, BRC-20 tokens such as PEPE, MEME, PIZA, and DOMO have appeared, and the meme coin fever in the Bitcoin market is overheating. According to brc-20.io, the total market capitalization of BRC-20 tokens is roughly ¥90 billion ($700 million).

Challenges of BRC-20

The pseudonymous developer who introduced the BRC-20Mr. DomoIt should be noted that there are many technical issues, as he himself points out that “this technology is still under development.” BRC-20 transfers using a “script file” that executes simple conditions and verifications, and compared to a “smart contract” that defines contract details and automatically executes them, the function and flexibility of the transaction method are greatly reduced. is limited.

In addition, since wallets and exchanges need BRC-20 specific updates, the trading market so far has been dominated by third-party platforms such as OTC (over-the-counter trading) and BRC-20 wallet Unisat. may be low.

According to brc-20.io, even the top ORDI token has traded 26 million yen ($200,000) in the last 24 hours. The price of these tokens can cause high volatility in capital inflows.

In addition, UniSat codeVulnerabilitywas attacked, and 70 transactions were subject to double-spend attacks. Double spending refers to sending (paying) the same token twice.

Meanwhile, the popularity of BRC-20 tokens is affecting Bitcoin users. The number of daily transactions on the Bitcoin network jumped to 534,000 on the 7th, surpassing the bull markets of 2018 and 2021. Of these, 65% were related to BRC-20 tokens.

As a result, competition for block space on the Bitcoin blockchain has intensified, and transaction fees have skyrocketed. While rising fees benefit miners and contribute to security robustness, they can be a burden for businesses and individuals using bitcoin.

Opinions on the BRC-20 token market are mixed, but Kashif Raza, founder of the cryptocurrency education platform, is a positive advocate. This is part of an open free market, and the growth of the BRC-20 token market means the exponential growth of Bitcoin.”

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