​​🧠 [Long Research] Topic: Ordinals & BRC20

Laser-eyed people figured out how to make their own shitcoins... and they are ecstatic! Is the bull here?!

Transactions fees are booming, activity and new startups are growing in numbers, their primary market has revived a bit, and all thanks to... bitcoin shitcoins. You heard that right. Read below for a little overview of what you might be missing 🦞

So… Ordinals.

A few weeks ago, Ordinals took BTC by storm, it was January 2023 when Rodarmor released the Ordinal theory framework. You can read some more here. Fast forward: Ordinals are data blobs inscribed on Bitcoin. Unlike 99.9% of NFTs on Ethereum and alikes, Inscriptions on BTC exist on-chain rather than being hosted on IPFS or on other solutions.

What's interesting? 🤔 The rise of Ordinals was a surprise, having given a boost to the whole Bitcoin ecosystem. Whether it was the "NFT on Bitcoin" narrative or some other flavour of the month, a fact is a fact - activity, volumes, and huge gas fees! Different wallets, interfaces, data tools, and similar projects - have popped up in the primary market trying to jump on this wave. This has a few interesting things to talk about:

1️⃣ Some core developers, as their primal instincts take over, started to say “this is not how the founding father wanted this!" Nah, for real, they view it as spam and consider making all such activity as literally spam. See here from Luke for a bit more info but ignore the hideous degods picture.
2️⃣ Miners, on the other hand, might not be so upset. They finally get fees, which is a super interesting topic in the security budget debate of the 21M cap. It's an old topic getting especially relevant in the recent cycle, as the current main (financial store of value) use case of Bitcoin doesn't actually entail many peer-to-peer-cash transactions, since people hodl these rocks. As such, fees only have ever come from brrr emissions. Funny ha.

But… the crowd wants more gambling!

Welcome: BRC-20 muh standard. BRC-20 standard was created around 2 months ago as an experimentation for fungible tokens on Bitcoin. Or as a grift. Fast forward: BRC-20 tokens utilize Ordinals inscriptions of JSON (JavaScript Object Notation) data to deploy token contracts, mint, and transfer tokens. See more from daddy CZ.

What's interesting? 🤔 People familiar with the matter (lol) are mostly of the opinion that BRC-20 is just a dumb concept, even worse than the Colored Coins have been. You could say their downfall has been due to high gas fees, impossibility of composability, distrust of the narrative back then... well, quite a few reasons possible.

There are 14000+ BRC-20 Tokens created as we speak with a total Market Cap of $440 M. (source) - so much scam has been created 💩 trying to sell new garbage to previously unaware holders who might not want to miss the scamcoin & nft season that we had on Ethereum. But

Now, it seems that scamcoins have fallen down quickly, but activity / wallets are trying to do something. So maybe there is something?

💭 Food for Thought:
- The BRC20 Standard adds “useless” on-chain data to satoshis, there’s really not much else to say there? Bad for bitcoin?
- They add “another subset of transactions competing for precious block space and interrupting your ability to secure 1 sat/vbyte transactions to secure your cold storage funds or create a lightning channel”, effectively “polluting" Bitcoin security model?

One and two more decent threads to recap. Again, you can discuss in kingdom or @lobsters_chat. See the conversation start with this message.

💡 Also, keep an open mind. Perhaps the initial failure of Colored Coins was simply due to the wrong timing and not the absolutely flawed architecture & developer experience? Or maybe these BRC20 are also a fake fugazi, but overall it allows Stacks to infiltrate Bitcoiner’s mindset? Looks like Miami is ecstatic. I am sorry, that hyperlink doesn't go to naked gym dudes pictures, it goes to bitcoin week.