Ordinals are a new way of making and moving tokens on Bitcoin using the BRC-20 standard, and with Bitcoin having a smaller block size than Ethereum, it gets clogged and pricey faster.
Ethereum's ERC-20 tokens inspired BRC-20 tokens but have some key differences. For example, BRC-20 tokens do not rely on smart contracts and require a Bitcoin wallet to interact with them. BRC-20 tokens have become popular in crypto due to meme coins like Pepe and Meme. There are over 8,500 BRC-20 tokens, with a total market cap of $120 million.
BRC-20 tokens have also increased the demand for Bitcoin transactions, fees, and block space. In recent days, BRC-20 transactions have outnumbered regular Bitcoin transactions. BRC-20 tokens have some advantages and disadvantages compared to other token standards.
On the positive side, they benefit from the security and compatibility of the Bitcoin protocol. On the negative side, they have a limited ecosystem and adoption, which may cause higher gas fees for Bitcoin users.
Meanwhile, ETH validators are having a blast this week as they rake in a whopping 8.6% staking rewards rate, the highest ever since the Merge.
Validators pocketed almost $46 million in the first week of May, a 40% jump from the week before. The meme coin mania also made swapping tokens a pricey affair for users, who had to shell out more than $30 per swap.
The nature of being decentralised means that Bitcoin should be open to any use case as long as users are willing to pay. Here are some things of note:
- Ordinals and meme coins are causing high gas fees on Bitcoin and Ethereum networks
- Ordinals are fungible tokens on Bitcoin using BRC-20 standard, meme coins are humorous tokens on Ethereum
- Bitcoin has smaller block size than Ethereum, leading to more congestion and higher fees
- Ordinals may harm Bitcoin in the long term by competing with Ethereum and other blockchains that offer more features for tokens, NFTs, and smart contracts
- Ordinals and meme coins may also help Bitcoin's long-term security by increasing demand for Bitcoin blocks and transaction fees for miners
Whether you are bullish or bearish about this development, at Coinut, we are committed to providing our customers with a safe and secure trading experience. Choose Coinut for your cryptocurrency trading needs and trade with confidence.
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