The incredible amount of “BRC-20” tokens minted via the “Ordinals” protocol, which recently produced the clogging of the Bitcoin network and strongly boosted transaction fees, has resulted in the creation of a debate among Blockchain developers as to whether it is necessary to stop issuing new tokens.
BRC-20 tokens are a class of digital assets that can be minted and traded on the Bitcoin Blockchain. These types of assets are inspired by the ERC-20 standard of the Ethereum network but use a different protocol called Ordinals to inscribe data in Satoshis (SATS), the smallest unit of Bitcoin.
It is important to note that due to the rising transaction fees of the Bitcoin network, thousands of users globally, have been forced to look for alternative payment methods such as Stablecoins. However, cryptocurrency exchange Binance has commented that it is in the process of integrating the Lightning Network, which would facilitate crypto payments.
Ali Sherief who initiated the debate on Sunday said that “Actual BTC transactions are declining.” “Such worthless BRC-20 tokens threaten the smooth and normal use of the Bitcoin network as a peer-to-peer digital currency as it was intended to be used,” he added.
Additionally, Sherief recommended “limiting mintages” of the Ordinals protocol’s BRC-20 token. In addition, Sherief also released a Bitcoin network improvement proposal (BIP) that consists of modifying the Bitcoin Core, the main software for connecting to the Bitcoin network.
Mass Minting Poses a Risk
However, not all members of the debate agree on a modification of the Bitcoin Core, as Bitcoin should retain its initial structure and functioning. For example, Michael Folkson, a member of the “London Bitcoin Dev”, expressed in the debate that Bitcoin should keep its “status quo”.
On the other hand, last March 8th, the BRC-20 token creator whose pseudonym “Domodata” on Twitter employed the Ordinals protocol to inscribe JavaScript code snippets (JSON), thus enabling the minting of a large number of fungible tokens, with a total supply of up to quadrillions, all of them, practically useless.
Currently, the ORDI token, created for no practical use other than to illustrate how BRC-20 minting works, is trading at $10.54, according to CoinGecko. In addition, to date, more than 14,300 BRC-20 tokens have been minted, some with supplies of up to 420 quadrillion units.
BRC-20 Tokens are Spammy
The continued growth of BRC-20 mintages has led several developers, including Sherief, to label BRC-20 tokens as spam and to think of ways to reduce the chaos of mass minting.
Ali Sherief expressed that “I reckon everyone knows what happened to the Bitcoin mempool over the last 96 hours”. “This was brought about by side projects like BRC-20, which have such high volume for the network,” he added.
The Bitcoin network’s mempool, a database of unconfirmed transactions, has become heavily congested this week, with up to nearly half a million unconfirmed transactions. For reference, the number of unconfirmed transactions was below 50,000, for much of 2022.
However, despite the efforts of developers, changes to the Bitcoin network protocol are unlikely to be made. Therefore, it is possible that the massive minting of BRC-20 will continue and major exchanges will have to create new strategies to combat network collapse and transaction crashes.
By Marina Meza
