July 24, 2024
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Bitcoin News

Bitcoin Transactions Hit Record High as New Token Type Takes Off

Bitcoin, the world’s first and most popular cryptocurrency, has long been a symbol of stability in the volatile world of digital assets. However, the development of BRC-20 tokens is pushing experimentation on the Bitcoin blockchain to new heights. These fungible assets, named after ERC-20 tokens, were introduced in March 2023 by a pseudonymous developer known as Domo. They have already pushed daily transactions on the Bitcoin blockchain to an all-time high of 682,000, while Bitcoin fees have surged to levels not seen since July 2021.

BRC-20 tokens are created using the Ordinals protocol, which allows for inscribing small units of Bitcoin known as Satoshis with unique data. For BRC-20s, users inscribe essential data like a token’s supply in a well-known format called JSON, making the tokens interchangeable. Currently, BRC-20s only allow users to create, mint, and send tokens, but they may gain more utility as applications that use them are developed.

The development of Ordinals in January 2023 shook up the Bitcoin community, with over 1 million Ordinals inscribed and marketplaces like OpenSea springing up to facilitate trading. While Ordinals sparked the creation of BRC-20s, other projects are also building on Bitcoin’s infrastructure to drive DeFi success. One such project is Trustless Computer, which bills itself as a Layer 1 built on Bitcoin, allowing developers to deploy full-blown applications like those of major DeFi protocols and fungible and non-fungible tokens.

Trustless Computer has developed its own form of fungible tokens, called SBRC-20s, which its smart contracts can interact with, but not BRC-20s. However, the Trustless Computer team is exploring ways to bridge BRC-20s to their innovative contract solution. Trustless Computer is not entirely trustless despite its name, as nodes specific to the project process smart contract transactions off the Bitcoin blockchain.

Although it is still too early to determine the lasting significance of BRC-20s and smart contracts on Bitcoin, the excitement around these developments shows that a new attitude is forming around the blockchain. Developers are eager to experiment and try crazy new ideas without fear of failure. Leonidas, the founder of Ord.io, a blockchain explorer for Ordinals, believes that hundreds of talented developers are now working full-time on Web3 use cases on top of Bitcoin. While there is no guarantee that these developments will last, the willingness of developers to experiment and push the limits of Bitcoin’s capabilities could lead to even more innovation and growth for the cryptocurrency ecosystem.