Benzinga - In the world of high technology, the most attention-grabbing events are not always the most important or game-changing ones. Today's headlines revolve around the adoption of ETFs, the trial involving SBF, regulations, new FCA norms, the end of the crypto winter, and the start of a bullish cycle. Amidst the coverage of these events, it's easy to overlook occurrences that unveil fresh perspectives for Bitcoin (CRYPTO: BTC).
Indeed, the cryptocurrency news cycle in the fall of 2023 seemed to showcase repetitive trends. It appears that the headlines from September to early November revolve around the chronicles of the collapsed FTX exchange and the trial of its former director, the saga of ETF acceptance, SEC-initiated inquiries, and experts' contemplations on the onset of a bullish market with optimistic Bitcoin price forecasts.
Meanwhile, in early November the cryptocurrency exchange Bitget listed a new cryptocurrency, SATS (Ordinals), a new interchangeable token formatted as BRC20. This token surged in value by 700% since the listing, drawing attention from cryptocurrency investors who collectively generate a daily trading volume of $19 million.
BRC20 — Tokens On The Bitcoin Blockchain The newly introduced SATS (Ordinals) token, classified as a meme token, might understandably evoke skepticism, but what's notable is its format — BRC20. BRC20 refers to a token standard for the Bitcoin blockchain, analogous to the ERC20 standard on Ethereum. This standard allows for the creation and issuance of tokens on the Bitcoin network, marking a significant technological advancement for Bitcoin. Similar to the known formats ERC20 and TRC20, tokens on the Ethereum and Tron blockchains, respectively, BRC20 tokens reside on the Bitcoin blockchain. How did this become possible?
In January 2023, the Ordinals project unveiled the capability to place images and various data types onto the blockchain of the largest cryptocurrency, Bitcoin, without using a separate token or sidechain. Ordinals use the serialization of Satoshis to record data in the "witness" part of a Bitcoin transaction. By late February, the number of NFTs issued on the Bitcoin blockchain surpassed 160,000. Shortly after, on March 8, 2023, the token ORDI was created as the first BRC20-formatted token.
Unlike Ethereum's ERC-20 tokens, BRC-20 tokens don't rely on smart contracts — they operate based on the Ordinals project's mechanism. They are deployed by adding JSON text files to the blockchain, defining the key features of the coins: supply, emission limit, and more. These novel tokens inherit the security and decentralization features of the original cryptocurrency network and can be sent to the wallets of other market participants, similar to any other crypto assets.
The issuance of NFTs on Bitcoin, along with the creation of BRC20 tokens, was met with mixed reactions and a dose of healthy skepticism. These new Bitcoin altcoins themselves aren't particularly noteworthy beyond being issued on the Bitcoin blockchain, signifying a technological revolution in the cryptocurrency world.
Repeating Ethereum’s Success Smart contracts, token issuance, dApps, NFTs, DeFi — all these terms were previously associated exclusively with the second cryptocurrency, Ethereum. The emergence of something new always had an impact on its price. In 2016, the price of ETH was no more than $10, but with the launch of the first ICOs, the price began to surge — by January 2018, it reached just over $1300.
Thousands of ICOs were conducted, numerous new coins were issued, and tens of billions of dollars were attracted. Today, we know it was a bubble. In 2018, the price of the second cryptocurrency began to decline and dropped to $90, which was 9 times more than its end-of-2016 value.
Subsequently, after a lull, the technological development of the Ethereum blockchain led to a new surge — from March 2020 to January 2021, the price rose by 850% to $1,200 — returning to the January 2018 levels. The year 2021 remained a record year for ETH. In November, the second cryptocurrency surged to a price of $4,810 — its highest price to date.
Prospects For BTC Until January 2023, Bitcoin stood apart from all other cryptocurrencies. Devoted Bitcoin enthusiasts believed there was only one cryptocurrency — Bitcoin, and everything else was an altcoin. Despite the price correlation of altcoins with Bitcoin, it was the altcoins that propelled blockchain technology forward. Remarkably, Bitcoin, despite lacking technological development, always maintained its top position in terms of price and popularity. For comparison, from March 2020 to January 2021, the price of BTC increased by 550%.
The emergence of BRC20 changed the landscape. Now, Bitcoin's blockchain can be utilized for various purposes, albeit not to the extent of the Ethereum blockchain. This shift has changed the rules of the game and might allow the value of Bitcoin to break away from other cryptocurrencies, surpassing even the second-ranked cryptocurrency.
History shows that it was precisely Ethereum's technological development that helped it rise and maintain its position. If we dare to make a direct analogy with Ethereum during the ICO era, then, considering further development of its infrastructure, Bitcoin's price could increase by 12,900%. In such a scenario, the price would exceed four million dollars per Bitcoin, which should by no means be considered a forecast. These figures demonstrate how crucial blockchain infrastructure development is.
Bitcoin and Ethereum are mostly perceived as technological assets, with their worth often shifting in reaction to broader monetary policies. Meanwhile, Bitcoin is scheduled for a halving event in May 2024. When considering market rotation cycles, it's typical for Bitcoin to initiate an upward trend, succeeded by Ethereum, and then a transition toward Altcoins.
Making Impossible Possible Why then did an event of this scale pass without due attention? The issue lies in the fact that the issuance of NFTs and the creation of tokens are a thing of the past. Everyone remembers what happened with 99% of ICOs, and everyone sees the state of the NFT market. This is the reason why such news sparked criticism among experts and the community. There's a need to showcase something technologically entirely new, yet everything already exists and is outdated — that's the public stance. However, in 2023, Bitcoin achieved what was considered impossible since its inception by anyone who had even a slight understanding of what Bitcoin is.
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