The emergence of BRC-20 tokens on the Bitcoin network has sparked both excitement and division within the crypto community. While the standard offers a unique approach to tokenization without relying on smart contracts, its integration into existing wallet infrastructure remains a contentious issue.
On one hand, some prominent wallets like UniSat have embraced BRC-20 tokens, allowing users to store, send, and receive them seamlessly. Proponents of this integration highlight the benefits of utilizing Bitcoin’s robust security and established network for tokenized assets.
However, other major wallet providers, including MetaMask and Exodus, have yet to incorporate BRC-20 support. Concerns surrounding the nascent technology and potential technical challenges contribute to their cautious stance. Additionally, ongoing debates within the Bitcoin community regarding the merits of BRC-20 itself further complicate the adoption landscape.
A Roadblock to Adoption
The lack of widespread wallet integration presents a roadblock for the broader adoption of BRC-20 tokens. Users seeking to interact with these assets are currently limited to a smaller pool of compatible wallets, hindering their accessibility and usability.
Despite the current hurdles, the potential of BRC-20 to unlock new possibilities for tokenization on the Bitcoin network remains undeniable. As the technology matures and wallet providers address existing concerns, BRC-20 integration is likely to become more prevalent, shaping the future of the Bitcoin ecosystem in unforeseen ways.
Background of Inscriptions
One year ago, Bitcoin developer Casey Rodarmor pioneered the Bitcoin Inscriptions process that enables users to encode metadata on Satoshis, or one hundred millionth (1/100,000,000) of a single Bitcoin. Expanding the idea in conjunction with Bitcoin Ordinals, which allows the minting of fungible tokens on the Bitcoin blockchain, fellow developer Domo created the BRC-20 token standard in March 2023.
The standard became a hallmark in a nearly 15 year old blockchain as it enables the minting of assets such as nonfungible tokens directly on Bitcoin, mirroring the utility of ERC-20 Ethereum tokens. Since then, the total market cap of BRC-20 tokens has surpassed $1.5 billion, with a trading volume of $337 million in the past 24 hours at the time of publication.
Trezor, Metamask and Bitget’s Policies
In a statement, a spokesperson for Trezor said that the firm “does not plan to incorporate BRC-20 tokens at this stage.” Similarly, MetaMask assets product manager Albert Feng said “We are certainly open to supporting BRC 20s in the future but at the moment the majority of our focus is on the EVM [Ethereum Virtual Machine] experience.”
On the other hand, Alvin Kan, COO of Bitget Wallet (formerly BitKeep), said that the company plans to introduce Bitcoin Ordinals market at a later stage alongside a decentralized exchange that powers BRC-20 token swaps within the self-custody wallet itself.
“Users can utilize Bitget Wallet to perform a variety of inscriptions-based functions, including the creation of omnichain inscriptions, viewing inscription market trends, and even participating in a soon-to-be-added BRC-20 token launchpad,” Kan explained.
Challenges and Limitations
Despite skepticism about their value due to limitations like Bitcoin’s block size and transaction throughput, BRC-20 assets offer significant innovations, such as providing a new development model for the Bitcoin ecosystem via a new asset issuance method, which directly addresses concerns related to performance scaling and DeFi application.
Similarly, OKX incorporated BRC-20 assets into its namesake wallet shortly after its invention. Currently, users can buy, sell, list, and transact BRC-20 tokens directly within the OKX Wallet app. The exchange itself also has a BRC-20 marketplace. The current market still lacks comprehensive infrastructural support on the part of wallets, which is a necessity gap,” said Kan.
Currently, one of the only native BRC-20 wallets with full token support is the UniSat Wallet, whose parent entity also happens to be embroiled in a dispute with BRC-20’s creator itself over a proposed hard fork.
Bitcoin Still Dominant But…
When asked about the outlook for the Bitcoin ecosystem in 2024, Kan said the main catalysts are Bitcoin smart contracts through new protocol standards and layer-2 solution Lightning Network. He also pointed out that despite being a nearly 15-year blockchain, Bitcoin still holds a key competitive edge over newer blockchains.
“In terms of asset security and stability, for instance, the Bitcoin network arguably holds the upper hand,” the COO stated. “However, the network falls behind on the metric of technological innovation within the realms of DeFi and GameFi when compared with other blockchains such as Solana and Ethereum.”