Cryptoverse: Highly Active Bitcoin Gives Birth to New Breed of Cryptocurrency
Things are accelerating on the bitcoin blockchain.
Daily transactions soared to an all-time high of 682,000 this month, according to Glassnode data, nearly 40% more than the previous peak in 2017. Bitcoin’s dominance, or its share of the overall cryptocurrency market of $1.16 trillion, an inflated 44% from 38% at the start of the year.
What is going on ?
This is where BRC-20 comes in, the first class of crypto token to be built on the bitcoin blockchain, in addition to bitcoin itself. Nearly 25,000 of these experimental coins have already been minted this year, which has caused the number of transactions to explode.
“BRC-20 tokens are a novel phenomenon,” said Gordon Grant, Co-Head of Trading at Genesis Trading.
Mainly due to the creation of these tokens, the seven-day daily transaction average stands at more than 531,000, almost twice as much as a month ago, according to data from Blockchain.com.
This new category of cryptocurrency has no specific use beyond speculation, at the memecoins stage. However, its burgeoning popularity shows that bitcoin is not only a store of value or a method of payment, but also serves as the basis for the development of new coins and applications, previously failed as the domain of more modern blockchains such than Ethereum and Solana.
Some investors and developers have deployed the bitcoin blockchain as a safer, long-term foundation for building jets and apps, following the crypto carnage that followed the collapse of top companies like FTX and d ‘ a general flight from the riskiest assets, according to market participants.
“People have seen what’s possible with other blockchains and they want to do it with bitcoin. As the oldest network, bitcoin has a track record that people can trust,” said Alex Miller, CEO from the Hiro bitcoin developer network.
Still, the BRC-20 frenzy has been volatile.
The total value of these tokens – which are usually traded on secondary markets, especially on decentralized exchanges – topped $1 billion in early May, but has since fallen back to $446 million, according to tracker BRC -20.io.
REGISTERED ON SATOSHI
Since the bitcoin blockchain was not originally developed to support a crypto ecosystem, unlike Ethereum and Solana, BRC-20 tokens are created using ordinal theory, which allows data to be written to satoshi – the smallest denomination of bitcoin, or one hundred millionth.
“There’s not a lot of utility when it comes to BRC-20 tokens and Ordinals,” said CJ Reim, a contributor at blockchain firm CoreDAO, though he sees the trend as “promising” in terms of interest in building products on the bitcoin blockchain.
The rush to create these new coins has not had a significant impact on the price of bitcoin, which has been trading below $30,000 since mid-April.
The rapid creation of BRC-20 tokens has not been without controversy, with critics believing that the issuance of these tokens has made it difficult for users who wish to use bitcoin for the purposes to assume it was designed to origin.
“Gas” fees, or transaction costs on the bitcoin blockchain, have skyrocketed over the past month, with total dollar fees paid per day nearing a new all-time high of $17.8 million per day. , according to data from Glassnode.
Median transaction fees hit $30.91, down from a range of 90 cents to $4.23 between January and May 1, according to data from Blockchain.com.
The network has also accelerated. Congestion was such that the world’s largest cryptocurrency exchange, Binance, had to temporarily halt bitcoin withdrawals on May 7.
“While congestion has eased somewhat, it remains high and at its peak users were waiting over 30 hours for transactions to be confirmed,” said Nauman Sheikh, head of cash management at Wave Digital Assets, digital asset investment manager.
“It pushed the boundaries of bitcoin technology.
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