Web3 research institution R3PO retrospectively analyzed the creation of BRC-20, and analyzed the impact it has brought to the Bitcoin ecosystem. Looking forward, when the tide recedes, where will BRC-20 go? It is believed that the narrative of the BTC ecosystem requires time and cycles, and BRC-20 can only be considered as a spark. Whether it can eventually become a prairie fire, we need to focus on the next actions of projects such as the Lightning Network and Layer2 sidechains.
What impact has the BRC-20 trend had on the Bitcoin ecosystem? 1) It has brought more profits to miners, with a total fee generated by the BRC-20 protocol reaching 1201BTC as of May 22, of which 87.6% came from BRC-20. 2) It has led to severe congestion on the Bitcoin network, with significant on-chain congestion and a surge in Gas fees. 3) The Bitcoin layer 2 network narrative has returned to people’s attention, including lightning networks, RGB protocols, and Layer2 sidechain solutions.
Where will BRC-20 go when the tide goes out? An undeniable issue is that this BRC boom is mainly driven by old players in the NFT inventory market. Imagine wherever these people go, we will see the liquidity and wealth effects emerging from the ecosystem. This is like a life-changing opportunity for a few people, but more like a typical Ponzi scheme for most. As ordinary investors, we need to pay extra attention to the risks in this BRC trend.
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Even considering speculation and FOMO factors, we are still far from the true potential of this new economy. We can see that the ecosystem has gradually developed supporting facilities such as NFT wallets, secondary trading markets, and NFT issuance tools. Although many basic infrastructures are not yet mature, it is not difficult to see that the entire crypto market has positive expectations for the future of the BTC ecosystem. The narrative of the BTC ecosystem takes time and cycles. BRC-20 can only be considered as a spark, and we need to focus on the next actions of projects such as Lightning Network and Layer2 sidechains. Although Casey Rodamorr and domo have stimulated the development of the ecosystem with their innovation, we need to see how the community and developers will take it to the next level.