Are BRC-20 tokens the answer to develop long-term Bitcoin prospects

Innovations around cryptocurrencies seem to be entering the market, with the latest being BRC-20 tokens. From what it’s understood, BRC-20 is based on Bitcoin blockchain and has been inspired from Ethereum’s ERC-20 standard. BRC-20 enables investors to ensure trading of fungible assets using the Ordinals protocol. 

According to Bitcoinist, a Bitcoin news portal, on May 7, 2023, BRC-20 transactions’ volume reached a 65% high. Experts reportedly believe that this development signifies the protocol’s increasing adoption. “I believe BRC-20 tokens are a type of fungible token standard for Bitcoin created by using the Ordinals protocol. This protocol allows users to trade fungible assets through inscriptions of JSON data,” Rajagopal Menon, vice-president, WazirX, a cryptocurrency exchange, told FE Blockchain. 

Market research suggests that BRC-20 tokens can generate high return on investment (ROI) through enhancement in Bitcoin’s demand. Insights from Crypto.com, a cryptocurrency exchange, mentioned that BRC-20 tokens can ensure Proof-of-Work (PoW) level of security, convenience for Bitcoin developers, and ease of fungibility. However, the exchange highlighted that BRC-20 tokens lack resources and mechanisms, along with high transaction costs. Despite the drawbacks, investors supposedly have backed BRC-20 tokens to fulfill the role of being a medium of exchange. 

“I believe ease of use and flexibility offered by the BRC-20 standard is what has attracted attention of developers and investors to this experimental token standard. Additionally, BRC-20 tokens require a Bitcoin wallet to mint and trade, making them accessible to Bitcoin users,” Kumar Gaurav, founder and CEO, Cashaa, a crypto business-based company, highlighted.

In recent developments, market capitalisation of BRC-20 tokens closed at one billion dollars, as of May 9, 2023. As per BRC-20.io (11.18 am, Indian Standard Time), a BRC-20 price tracking website, BRC-20 tokens’ current market value stands around $682 million. The website also stated that BRC-20 tokens such as ordi, pepe, vmpx, nals, meme, among others, to be at the front of capturing BRC-20 tokens’ market capitalisation. Moreover, future predictions indicate that in spite of BRC-20 tokens nascency, they carry potential to play an important role in preserving Bitcoin blockchain’s future.

“I believe it is essential to note that volatility and worth of tokens on the blockchain are as varied as users and investors. Many of the coins with value on the blockchain started out as a way of doing things that had not been considered before. However, the value in innovation it will add to the blockchain will be tested over time and we should observe carefully,” Pratik Gauri, founder and CEO, 5ire, a blockchain-based platform, concluded. 

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