Diving in to the BTC fungible tokens

TECH

by Bob Bodily

Fungible tokens have exploded on Bitcoin over the last 10 months since the rise of Ordinals. Here’s an overview of some of the most interesting fungible token standards on Bitcoin:

BRC-20: Uses an account model (accounts hold balances). You receive/send with messages stored in Ordinals. Airdrops are expensive. Bridging is difficult (requires decentralized inscribing). Simple standard still, so not a lot of flexibility (yet). Unisat has proposed modules to expand functionality. Federated consensus indexer proposed and almost finished.

Runestone: Uses a 100% UTXO model (UTXOs hold the balances). You receive/send with messages stored in the op_return. Indexer will likely be built into the Ordinals indexer. Technical spec currently being developed by Casey Rodarmor, so likely will see lots of adoption. Many unanswered questions here still on how everything will work.

PIPE: Similar to Runestone. Uses a 100% UTXO model. You receive and send with messages in the op_return. Developed by the Trac team. Adds much needed fair mint functionality to the Runes standard. Had the first fair launch mint for Runes ($PIPE).

TAP: Similar to BRC-20. Uses an account model. Developed by the Trac team. Working toward a decentralized peer-to-peer system for indexer. TAP adds important features such as staking, swaps, and airdropping tokens. TAP is working toward community governance.

ARC-20: Uses a colored coin model (each sat in a UTXO is colored as a token). Developed by the Atomicals team. Flexible protocol with naming (realms), NFTs, and fungible tokens. Invented BitWork, a more fair token distribution method forcing users to do proof of work to mine tokens.

ORC-20/ORC-CASH: Similar to BRC-20. Uses an account model. ORC-CASH adds the ability to easily and efficiently airdrop to many addresses in a single transaction and is the most simple extended version of BRC-20.

STRATEGY

by Max Ogles

“95% of NFTs are Worthless.” I don’t recall which publication said this, but multiple reported the same thing. It’s not a surprise because most people just dwell on the surface when they discuss crypto topics. Also, the headline is true.

But I’m betting 100% on the success of NFTs, so what do I see differently?

1) Tokens, themselves, are not valuable. The definition of a token is that it represents something of value, and often it can be exchanged for that valuable thing. Anyone can mint a token. Sometimes, like with $DOGE, simply minting a token makes people want it. But tokens don’t inherently have value.

2) The first NFT wave was driven by speculation. I can’t count the number of people who have said, “I just don’t see why NFTs are valuable.” I usually respond that it’s just economics – supply and demand. But what these people are actually getting at is that in the past couple years, traders have focused on NFTs being valuable primarily just because they are tokens with a limited supply.

3) The next NFT wave will be driven by tokens with real representative value. I think this is the fundamental reality that the surface-level media ignores. In the next wave of NFTs tokens will mean: ownership of digital and physical properties, access to exclusive services or opportunities, credentials earned through contributions, and many more examples.

What the media doesn’t see is that we are making the shift from NFT speculation to NFT utilization. The second wave will be driven by products where value already exists, and NFTs are embedded in that value.

CULTURE

by Steve Erickson

In January 2023, Casey Rodamor introduced the Bitcoin Ordinals Protocol, sparking immense excitement and growth in the Bitcoin community. Several key factors contributed to this remarkable development:

Bitcoin's Dominance: Bitcoin constitutes 47% of the cryptocurrency market, making it the most widely recognized digital currency. Its global prominence attracted a diverse range of crypto enthusiasts, horrible traders down bad looking for gains, haters that pray on its downfall, and top-tier talent to the ordinals ecosystem.

Diverse Community: The Ordinals community consists of individuals from various NFT communities. Unlike many crypto ecosystems with staunch blockchain maximalists who would rather rot in the hells of Xibalba than support another chain, ordinals enthusiasts embrace new advancements, creating an exceptionally open-minded community.

No Smart Contracts: The absence of smart contracts in the Ordinals ecosystem encourages cooperation in searching for solutions. Several black hat hackers have expressed their disappointment in being unable to search for bugs in smart contracts.

Bear Market Conditions: Launching during a bear market allowed the community to form authentically, attracting individuals who understand the core principles of Web3. While other communities merely adopted the bear market darkness, we were born in it, molded by it! Note: This is not a literal bear market, please stop asking the price of grizzlies.

Making Bitcoin Fun: While Bitcoin is widely recognized for its simplicity and payment features, it has long lacked the “fun” factor. My friends and I tried having fun on Bitcoin before ordinals by sitting in a damp room sending payments back and forth between each other but it didn’t give us the dopamine rush we got from near rug experiences on sketchy BNB swaps. Ordinals did very much “Make Bitcoin Fun Again”.

While the community may face future ups and downs, its strong foundation and diverse community will continue to make it thrive.