Memecoins debut on the Bitcoin blockchain
A new technology upgrade has allowed memecoins, such as Pepe Coin (PEPECOIN-USD), to be distributed on the Bitcoin blockchain for the first time, causing congestion problems and raising BTC transaction fees to a two-year high.
The upgrade enabled the creation of Ordinals, which are non-fungible tokens (NFTs) on the Bitcoin blockchain, while the BRC-20 standard facilitates trading of memecoins.
Approximately 14,300 BRC-20 tokens have been launched, amassing a total market capitalization of over $1 billion (£800 million). Ordi (ORDI-USD), a memecoin honoring the Ordinals protocol, is currently the most valuable, worth $400 million.
The Taproot upgrade, which occurred in November 2021, has since caused an increase in activity on the network, which processes transactions every 10 minutes, and significantly reduced transaction settlement.
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The development has been met with criticism from some bitcoin pioneers, such as e.g Max Kaiser and Samson Mow.
“Ordinals are like bars on the hull of a ship, the market will scrape them away,” broadcaster and bitcoin advocate Keizer told Yahoo Finance UK.
“They are like digital plastic pollution floating in the ocean, humans are good at polluting the environment, both analog and digital.”
Since the beginning of May, bitcoin (BTC-USD) transaction fees have skyrocketed, now averaging over $20.
Ordinary inscriptions have soared, with users adding images, videos and other content, totaling more than 5 million inscriptions, according to data from Dune Analytics.
According to Samson Mow, founder of JANUARY 3the hype around Bitcoin Ordinals and BRC-20 tokens is unsustainable and will fade away within months.
“These guys are basically paying massive amounts of fees that go directly to Bitcoin miners, and there’s no way this can be sustained,” Mow said in an interview with Cointelegraph.
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“They will disappear after even months, let’s not talk years here.
“These are just short-term money grabs similar to most on competing chains like Ethereum (ETH-USD) and Solana (SOL-USD).”
The ‘Bitcoin is Saver’ Twitter account posted: “Marginalized people in developing countries will have to pay more to run their Bitcoin nodes and send transactions because privileged wealthy whites want to put JPEG drawings on the blockchain as status symbols.”
Bitcoin Ordinals and BRC-20 tokens using the UniSat wallet
Investors buy BRC-20 tokens and NFTs using the UniSat wallet, which is facing high demand.
To set up a UniSat wallet, users must download the extension from the UniSat website, create a new wallet with a secure password, and write down a 12-word recovery phrase.
However, users should be prepared for potential upfront and high transaction fees, given the Bitcoin network’s high gas fee consumption.
See: Belgium’s digital minister: EU plans to ‘bring order to crypto’ and create its own blockchain | Crypto Mile
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