Bitcoin, as the pioneer of blockchain and cryptocurrency, has set the foundation for various innovations in the crypto space. However, its protocol has remained unchanged due to its value and the trust placed in its decentralized network. This stability has made Bitcoin somewhat dull compared to the second- and third-generation chains that are better suited for multiple use cases and applications. But the emergence of Ordinals has sparked a new wave of innovation on the Bitcoin network.
Ordinals is a protocol built on top of the Bitcoin blockchain that allows for the issuance of tokens without changing a single line of Bitcoin’s code. This technology has led to the development of Ordinals NFTs and BRC-20 tokens, which have gained significant community enthusiasm and increased BTC miners’ earnings. With Ordinals, an infinite number of tokens can now be traded on Bitcoin, opening up new possibilities for the ecosystem.
Initially, Ordinals was embraced by tech-savvy Bitcoiners who had the knowledge and tools to mint and trade these tokens. However, code-free solutions have emerged, making Ordinals more accessible to the broader community, especially the Ethereum community. NFTs were the first use case for Ordinals, but it can also be used to issue fungible tokens similar to Ethereum’s ERC-20 tokens. These Bitcoin-native assets are known as BRC-20 tokens.
The market for BRC-20 tokens has been growing rapidly, with several projects gaining market share and finding their way to tier-1 exchanges. One notable example is $SATS, a BRC-20 token that represents the entire Bitcoin supply. These projects are not only making Bitcoin fun again but also educating newcomers about the key characteristics of Bitcoin.
The ability to issue tokens on the Bitcoin network became possible with the Taproot upgrade, which went live in November 2021. Taproot allows data to be added to block space, enabling the minting of tokens on Bitcoin. Although BRC-20 tokens share a similar naming structure with ERC-20, they work differently due to Bitcoin’s unique architecture.
While BRC-20 tokens have their critics within the Bitcoin community, they are paving the way for a tokenized ecosystem around Bitcoin and Ordinals. Just as Ethereum’s ERC-20 tokens created a diverse ecosystem, Bitcoin and BRC-20 tokens have the potential to do the same. Key infrastructure connecting Bitcoin tokenization to EVM chains is being developed, and the future of BRC-20 tokens holds promising opportunities.
For those who are tired of Ethereum’s stagnation and don’t align with Bitcoin maximalism, Ordinals and BRC-20 tokens have brought back the excitement to the crypto world. It represents a return to Bitcoin’s experimental and creative roots, offering the chance to make money while advancing understanding and spreading memes.
In conclusion, Ordinals and BRC-20 tokens have sparked a new wave of innovation on the Bitcoin network, bringing back the excitement and creativity that was once associated with the ecosystem. These tokens have opened up new possibilities for the Bitcoin community and are laying the foundation for a diverse and tokenized ecosystem.