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4th May 2023 > > BRC-20.

Updated: May 7, 2023

tl;dr

Ordinals, BRC-20, and a plethora of new cryptos akin to meme coins inscribed on the BTC blockchain.


Market Snap (at time of writing)








Market Wrap

Shortly after announcing another 25bps hike in interest rates – aka market manipulation on a grand scale - Federal reserve Chairman Jerome Powell stated:


“Conditions in [the banking] sector have broadly improved since early March and the U.S. banking system is sound and resilient. We will continue to monitor conditions in the sector."


In response to this attempt to quell further speculation about the health of the US banking system, the shares prices of several US regional banks fell by up to 60%. Central Banks worldwide have lost credibility due to their actions propping up government fiscal incontinence over the last decade. Their role needs a rethink and a return to their original function as lender of last resort, and no more than that.


Cryptos rally on the back of these banking concerns.


Curious Cryptos’ Commentary – A new class of cryptos

After two recent visits on 26th and 27th April to the topic of meme coins, it seems interest continues to grow, driven by a new technology.


Top line takeaway – meme coins on Ethereum are largely pointless, often scams, and subject to frequent rug-pulls.


So, what’s the draw? Stories abound of turning hundreds of dollars into millions of dollars in days or weeks. That is always going to grab attention, but as we have already seen, these stories are not necessarily entirely truthful.


The latest surge of interest in meme coins has come on the back of a technological development in the use of the BTC blockchain.


The first ordinal (see CCC 19th, 20th & 21st February 2023 amongst others) was inscribed on December 14th, 2022, but ordinals only started growing in popularity in February 2023, quite probably because of the CCC’s intrepid and ground-breaking journalism on this topic.


Ordinals are frequently compared to NFTs (non-fungible tokens) on Ethereum and other networks, but they differ in some key respects. I have not seen an NFT come close to this ordinal, number 466:



But it doesn’t end there - the pace of technological development in the crypto world is breathtaking to watch.


In early March, the BRC-20 standard was launched. This functionality extended the use of ordinals beyond a non-fungible token type landscape to a fungible token world:



Though declared as an experiment, with faults, and plenty of scope for improvements, the first test fungible token (ORDI) was fully minted by third parties in less than 18 hours.


Two months later, 8,550 BRC-20 coins have been created, with a total market cap of around $113mm, a 600% rise in just one week:


Note that the PEPE coin above is a BRC-20 version of the one that has been dominating headlines of late with a market cap of $500mm on the Ethereum blockchain.


These coins don’t behave in the same way as more traditional crypto coins. Though fungible, each ordinal has a specific number of coins inscribed onto it as part of the minting process. Once inscribed, that ordinal cannot be further subdivided. An ordinal inscribed as 50 ORDI will forever be no more nor less than 50 ORDI.


At least for now. It is easy to imagine a technological development around ordinals like bridging between different blockchains that will allow for a change in the denomination of any one specific ordinal. That’s today’s challenge to all the coders out there.


Network congestion and network fees are climbing because of BRC-20 coins which now sometimes account for over 50% of transactions on the BTC blockchain.


Fortunes will be won and lost in this space.


If you want to take a closer look at the functionality being developed on the BTC blockchain this is a great place to start:


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