The situation on the bitcoin blockchain is getting hotter.
According to data from Glassnode, daily transactions have soared to an all-time high of 682,000 this month, over 40% higher than the previous peak in 2017. From 38% at the beginning of the year, Bitcoin's dominance, or its portion of the entire $1.16 trillion cryptocurrency market, has increased to 44%.
What is happening?
Aside from bitcoin itself, BRC-20 is the first class of cryptocurrency tokens to be established on the bitcoin network. This year, about 25,000 of the experimental coins have already been produced, increasing transaction volume dramatically.
"BRC-20 tokens are a phenomenon we haven't seen before," said Gordon Grant, co-head of trading at Genesis trading.
According to data from Blockchain.com, the average daily transactions over a seven-day period have increased to more than 531,000, more than twice as many as they were a month ago, primarily as a result of the introduction of these tokens.
Similar to memecoins, this new form of cryptocurrency has no function other than speculative purposes. Although it is still relatively unpopular, this indicates that people are interested in using bitcoin not only as a store of value or a means of payment, but also as the basis for creating new coins and applications, which were previously thought to be the purview of more cutting-edge blockchains like Ethereum and Solana.
In the wake of the crypto carnage that followed the failure of well-known companies like FTX and a general flight from risky assets, some investors and developers consider bitcoin's blockchain as a safer long-term base for developing tokens and applications.
"People have seen what is possible with other blockchains and they want it on bitcoin, as the oldest network, bitcoin has a track record that people can trust," said Alex Miller, CEO at bitcoin developer network Hiro.
Even so, the BRC-20 craze has proven unpredictable.
According to tracker BRC-20.io, the market cap of these tokens, which are often traded in secondary markets, mainly decentralised exchanges, surpassed $1 billion in early May but has since dropped back to $446 million.
BRC-20 tokens are made utilising ordinals theory, which enables data to be imprinted on each satoshi - the smallest denomination of bitcoin, or one hundred millionth - as the bitcoin blockchain wasn't initially developed to sustain a crypto ecosystem, unlike Ethereum and Solana.
"There isn't much utility when it comes to BRC-20 tokens and Ordinals," said CJ Reim, contributor at blockchain firm CoreDAO, though he sees the trend as "promising" in terms of interest in building products on the bitcoin blockchain.
The price of bitcoin, which has been trading under $30,000 since mid-April, hasn't been significantly impacted by the rush to produce these new coins.
The quick release of BRC-20 tokens has not been without controversy, with critics claiming that doing so has made it harder for people to use bitcoin for its original intended uses.
According to Glassnode data, the total dollar-denominated fees paid every day reached close to a new all-time high of $17.8 million per day. "Gas" fees, or transaction expenses on the bitcoin blockchain, have skyrocketed over the past month.
According to data from Blockchain.com, the median transaction cost increased to $30.91 between January and May, up from a range of 90 cents and $4.23.
Additionally, the network has slowed down a lot. On May 7, the world's largest cryptocurrency exchange Binance had to temporarily halt bitcoin withdrawals due to the extreme congestion.
"Although congestion has eased somewhat, it is still elevated and at its peak users were waiting over 30 hours for transactions to be confirmed," said Nauman Sheikh, head of treasury management at digital asset investment manager Wave Digital Assets.
"This has pushed the limitations of bitcoin's technology."
(Source:www.reuters.com)
According to data from Glassnode, daily transactions have soared to an all-time high of 682,000 this month, over 40% higher than the previous peak in 2017. From 38% at the beginning of the year, Bitcoin's dominance, or its portion of the entire $1.16 trillion cryptocurrency market, has increased to 44%.
What is happening?
Aside from bitcoin itself, BRC-20 is the first class of cryptocurrency tokens to be established on the bitcoin network. This year, about 25,000 of the experimental coins have already been produced, increasing transaction volume dramatically.
"BRC-20 tokens are a phenomenon we haven't seen before," said Gordon Grant, co-head of trading at Genesis trading.
According to data from Blockchain.com, the average daily transactions over a seven-day period have increased to more than 531,000, more than twice as many as they were a month ago, primarily as a result of the introduction of these tokens.
Similar to memecoins, this new form of cryptocurrency has no function other than speculative purposes. Although it is still relatively unpopular, this indicates that people are interested in using bitcoin not only as a store of value or a means of payment, but also as the basis for creating new coins and applications, which were previously thought to be the purview of more cutting-edge blockchains like Ethereum and Solana.
In the wake of the crypto carnage that followed the failure of well-known companies like FTX and a general flight from risky assets, some investors and developers consider bitcoin's blockchain as a safer long-term base for developing tokens and applications.
"People have seen what is possible with other blockchains and they want it on bitcoin, as the oldest network, bitcoin has a track record that people can trust," said Alex Miller, CEO at bitcoin developer network Hiro.
Even so, the BRC-20 craze has proven unpredictable.
According to tracker BRC-20.io, the market cap of these tokens, which are often traded in secondary markets, mainly decentralised exchanges, surpassed $1 billion in early May but has since dropped back to $446 million.
BRC-20 tokens are made utilising ordinals theory, which enables data to be imprinted on each satoshi - the smallest denomination of bitcoin, or one hundred millionth - as the bitcoin blockchain wasn't initially developed to sustain a crypto ecosystem, unlike Ethereum and Solana.
"There isn't much utility when it comes to BRC-20 tokens and Ordinals," said CJ Reim, contributor at blockchain firm CoreDAO, though he sees the trend as "promising" in terms of interest in building products on the bitcoin blockchain.
The price of bitcoin, which has been trading under $30,000 since mid-April, hasn't been significantly impacted by the rush to produce these new coins.
The quick release of BRC-20 tokens has not been without controversy, with critics claiming that doing so has made it harder for people to use bitcoin for its original intended uses.
According to Glassnode data, the total dollar-denominated fees paid every day reached close to a new all-time high of $17.8 million per day. "Gas" fees, or transaction expenses on the bitcoin blockchain, have skyrocketed over the past month.
According to data from Blockchain.com, the median transaction cost increased to $30.91 between January and May, up from a range of 90 cents and $4.23.
Additionally, the network has slowed down a lot. On May 7, the world's largest cryptocurrency exchange Binance had to temporarily halt bitcoin withdrawals due to the extreme congestion.
"Although congestion has eased somewhat, it is still elevated and at its peak users were waiting over 30 hours for transactions to be confirmed," said Nauman Sheikh, head of treasury management at digital asset investment manager Wave Digital Assets.
"This has pushed the limitations of bitcoin's technology."
(Source:www.reuters.com)
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