The latest buzz in the crypto world revolves around the newly introduced Bitcoin Code Standard (BRC-20), which has been getting a lot of attention and favor due to the recent memecoin craze. Despite the ongoing hype, the token standard is still subject to certain limitations related to the broader crypto landscape.
newly a report With the cryptocurrency exchange, Bitfinex emphasized the potential of the token standard and the importance of identifying more use cases to accelerate its widespread adoption.
BRC-20 symbol standard
In March, the BRC-20 token standard, known as the Bitcoin Request for Comment, was created using the Ordinals protocol. Originally designed to facilitate the creation of non-fungible tokens (NFT) by recording data such as images, videos, tokens, and text in the witness portion of BTC transactions, the protocol has evolved to allow a token transfer of fungible tokens on the blockchain.
according to data From brc-20.io, the market cap of BRC-20 tokens has exceeded $900 million at one time, with more than 14,400 tokens issued. However, the market is down to approximately $542 million at the time of writing.
Since the introduction of Bitcoin-based fungible assets, transactions on the network have skyrocketed, with transactions of BRC-20 Ordinals outpacing non-BRC-20 transactions by more than four million, according to data From Dune Analytics.
Some of the most requested BRC-20 tokens include ORDI, NALS, PIZA, PEPE, and MEME.
network limits
Despite showcasing the potential of the Ordinals Protocol, the new token standard faces limitations that may hinder its growth and progress.
One significant drawback is the lack of use cases, which can hinder development. In addition, the BRC-20 network does not support smart contracts, and asset prices are mainly based on market speculation. This, along with their 24-hour trading volume being less than 30% of the market cap, as is evident in the case of ORDI, makes predicting their future difficult.
Another limitation is the lack of Ethereum Virtual Machine (EVM) compatibility, which limits developers’ access to network resources and building capabilities. This can limit adoption and lead to a tight ecosystem.
Moreover, BRC-20 tokens take up a lot of block space, which can lead to network congestion and higher transaction fees.
Despite these limitations, Bitcoin’s Proof-of-Work (PoW) consensus mechanism makes it difficult for hackers to break into the network, which makes the blockchain’s security strong.
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