Since 2009, when the Bitcoin was launched, Bitcoin maximalists tried to explain to the world its potential use cases, however, we never witnessed any on the ground. It was always more of a thin-air talk rather than an actual used case. On the contrary, Ethereum which was launched in 2015, picked up on various use cases like ERC-20 tokens, decentralized Applications (dApps), Staking platforms, Smart contracts, NFTs (Non-Fungible Tokens), Metaverse, etc.
Finally, the Bitcoin community also came up with the first of its kind used case, i.e. BRC-20 Tokens.
What are BRC-20 Tokens?
BRC-20 Token is a name derived from Ethereum’s ERC-20 Token, which is a token standard on the Bitcoin Blockchain. The tokens are created using Ordinal Protocol1Nelson, J. (2023, May 1). What are ordinals? A beginner’s guide to bitcoin nfts. Decrypt. https://decrypt.co/resources/what-are-ordinals-a-beginners-guide-to-bitcoin-nfts. As of now, the only used case of BRC-20 token that has come up is NFT (Non-Fungible Token).
Unlike the other blockchain tokens, BRC-20 Tokens are fully owned by the users minting them. Once the 100% minting of a token is achieved, the users who minted the coin, receive a proportion of the total supply volume of the coins, which later can be sold off in a marketplace. Unisat is one such marketplace hosting BRC-20 Tokens on it.
Are BRC-20 Token Trustworthy and Should You Invest in Them?
As per BRC-20.io website, the current total market cap (as of 9th May 2023) is approximately US $ 3 Billion. A day before i.e. on 7th May 2023, the market cap was just US $300 Million. This means that in just two days, the market cap of BRC-20 Tokens increased by 900%.
Also, there has been an increase of 670 BRC-20 tokens (from 13530 tokens on 7th May to 14200 tokens on 8th May) in just one day.
PEPE coin is one such example of ERC-20 coins which soared 7500% in just 2 weeks of time2Pepe Price Today, Pepe to USD Live Price, marketcap and Chart. CoinMarketCap. (n.d.). https://coinmarketcap.com/currencies/pepe/. This attracted the investors, to get early in BRC-20 tokens, which could be early PEPE like NFT tokens.
There is no doubt about the hype of BRC-20 coins and the amount of money that is flowing into this new blockchain NFT tokens, however, it’s still quite in the early stage of its inception. It shall therefore be too risky to invest in these coins at the moment.
Consider these as small-cap coins that have just been launched in the market without much clarity about their adoption and future use cases. Further, the rise of the BRC-20 token at this time of the year, when halving of Bitcoin is just a year away, the market resonates the mid-2021 year market when the large cap coins like Bitcoin, Ethereum, and XRP were down and Alt Coins were up.
Can BRC-20 Tokens Drive up the Price of Bitcoin?
Just like transacting ERC-20 tokens require Ethereum tokens as the gas fees, similarly, launching, and transacting BRC-20 requires Bitcoin.
Since the launch of Bitcoin, its price has majorly increased due to its scarcity and speculation in the market. However, with BRC-20 tokens, the use of Bitcoin is expected to increase manifold times which will shoot up the price of Bitcoin in the near future. One such recent example, (regarding the sudden surge in the demand for Bitcoin) came up when whales started withdrawing their Bitcoin tokens to Unisat exchange to invest in BRC-20 tokens. This caused temporary congestion in the network and a lot of individuals faced delays in the withdrawal3Person. (2023, May 7). Binance resumes bitcoin withdrawals after temporary closure. Reuters. https://www.reuters.com/business/finance/binance-resumes-bitcoin-withdrawals-after-temporary-closure-2023-05-07/.
Can I Launch my Own BRC-20 Token?
Yes, the good news is that you can also launch your own BRC-20 token by simply uploading your NFT art, followed by paying a transaction fee in Bitcoin. Once launched, it shall be added to the pool of tokens on Unisat and shall be made available for minting.
Some of the Trending BRC-20 Tokens
Ordi is one of the earliest BRC-20 token which is currently trading at US$ 27. Other popular BRC-20 tokens are PEPE coin, meme coin, punk, BRUH, gold, <10K, etc. Refer to the complete list of trending BRC-20 tokens on Unisat.
Do your Own Research Before Investing
One good thing about BRC-20 tokens which differentiates it from ERC-20 tokens is that the owner of the token are the users minting it and not really the individual who launched the token. This means that the probability of someone bringing the price of the token down, considerably by dumping the coins in the market looks quite less. However, at the same time, if a whale owns most of the minting share, the decision to dump all the coins together in the market, still looks like a possible probability.
Further, looking at the growth rate of investment coming in BRC-20 Tokens by whales and the normal public, it’s easy for anyone to FOMO. It is therefore strongly advised to do thorough research on the project you plan to invest in. NFTs on the Bitcoin blockchain are still in their early stages and are testing the market sentiments. Time shall tell whether it becomes the next big thing in the Crypto world or proves to be another example of rug pull.
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