The New Era of the BTC Ecosystem: The Rise of Ordinals and BRC-20

The Bitcoin ecosystem is迎来新的机遇. The emergence of the Ordinals protocol has brought a brand new narrative space for BTC, and the BRC-20 token standard based on this has pushed market sentiment to a climax. This article will explore the origins of Ordinals, the current status of BRC-20, and the future development of the BTC ecosystem.

The Ordinals protocol gives unique value to the smallest unit of Bitcoin, "satoshi," opening a new chapter in the BTC ecosystem. Currently, the Ordinals NFT market is continuously expanding, and related infrastructure is becoming an important track. At the same time, the attempt at the BRC-20 token standard has triggered a new round of wealth effect, with over 18,000 BRC-20 projects minted on-chain so far. The trading market is also rapidly expanding, with Unisat standing out, accounting for more than 50% of the trading volume.

Although BRC-20 still has many shortcomings, it has created new possibilities for the future development of the BTC ecosystem. Currently, the BTC ecosystem is in a very early stage and still requires developers and the community to continuously improve the standard design and enhance the infrastructure.

Ordinals Protocol: The Renaissance of BTC

Since the birth of the Ordinals protocol in December 2022, over 6 million NFTs or Tokens have been minted, opening up new horizons for the Bitcoin ecosystem. Ordinals are defined based on the smallest unit of the BTC network, "satoshi", assigning a unique identity ( number + annotation ) to each satoshi, making the originally homogeneous satoshis become unique "NFTs". This greatly enhances the trading value and collectible value of satoshis.

Unlike Ethereum NFTs, the information of BTC NFTs is completely stored on-chain, requiring no off-chain storage of metadata. This characteristic of true on-chain storage is also one of the reasons why BTC enthusiasts admire it. An increasing number of well-known NFT projects are also joining the BTC NFT ecosystem and achieving success. Market research estimates that by 2025, the market size of Ordinals NFTs will reach 4.5 billion USD, and the related infrastructure will continue to improve.

BRC-20: The Evolution of Ordinals

On March 9th, the informal proposal of the BRC-20 protocol triggered FOMO in the market. Data shows that there are currently over 18,000 BRC-20 token projects, with a total market value exceeding 500 million USD. The trading volume related to BRC-20 on the BTC network has surpassed that of non-Ordinals, accounting for over 65% during certain periods.

The BRC-20 protocol utilizes Ordinals to create and trade fungible tokens on the Bitcoin blockchain. It uses JSON data to store token information, including name, symbol, total supply, and more. However, BRC-20 tokens cannot interact with smart contracts and cannot perform automated operations.

As the first BRC-20 token, Ordi achieved a hundredfold increase in just three weeks. This has prompted more trading markets to rapidly emerge, providing users with services such as Ordinals NFTs, BRC-20 tokens, and BTC domain names. Among them, Unisat has emerged remarkably, currently holding over 50% of the market share.

The Carnival Driven by Multiple Factors

BRC-20 tokens have greater speculative space than BTC NFTs, with participation from retail investors, exchanges, developers, and miners.

For BTC miners, BRC-20 has brought huge profits. Data shows that on May 7th, the total network transaction fees for Bitcoin reached 403.91 BTC, an increase of nearly 18 times compared to a month ago. The high transaction fees have created substantial income for miners.

Leading ecosystem projects and institutions are also joining in. Many well-known NFT projects and trading platforms have begun to support the Ordinals ecosystem to gain more asset management opportunities and fee income.

It is worth noting that many of the developers in the current BRC-20 ecosystem applications come from the original BSV community. They have once again gained development opportunities in the BRC-20 track, while also providing new options for developers focusing on POW chains.

Risks and Opportunities Coexist

BRC-20 tokens are still in the early stages, with strong meme attributes and a lack of practical application scenarios. Their standards are also not as strict and comprehensive as the ERC token standards. The founder, domo, stated that this is just an experiment and encourages the community to continuously improve.

Currently, BRC-20 faces many issues: a lack of ecological infrastructure, a lack of liquidity exchanges, security dependence on platforms, and potential regulatory risks. Additionally, the network congestion caused by BRC-20 has also sparked controversy, with some BTC supporters believing that it harms the network.

Nevertheless, BRC-20 provides new ideas for the development of the BTC ecosystem. As more developers pay attention, it is believed that the BTC ecosystem will eventually thrive. In the future, there may be more refined token standards and a smart contract market, attracting more investors to participate. The BTC layer two network is also expected to welcome development opportunities, providing new solutions to issues such as network congestion.

Overall, the BTC ecosystem is still in its early stages and requires further exploration and improvement. The emergence of Ordinals and BRC-20 has brought new possibilities, which are worth our ongoing attention.