Ordinals and BRC-20 Revolutionize Bitcoin and Benefit Miners in Post-Halving

When Bitcoin was created, few could have imagined the breadth of innovations that would follow. Recently, the network witnessed a significant milestone with the introduction of Ordinals and BRC-20, elements that are redefining the contours of what is possible in the Bitcoin universe. These innovations gave rise to the concept of BTCFi, that is, the use of Bitcoin as the main asset in DeFi, bringing new dimensions to a network previously marked by simplicity.

BRC-20 tokens, in particular, have demonstrated impressive growth, with their market capitalization surpassing the $2.8 billion mark. Additionally, Ordinals subscriptions contributed over $438 million in mining fees, evidencing robust support for the Bitcoin network and encouraging active participation from miners.

One of the advocates of this evolution is Andy Handika, CEO and co-founder of Loka Mining. He highlights the importance of these changes, especially in the context of preparing for the next Bitcoin halving, scheduled for April 2024. According to Handika, the Ordinals protocol, which allows the inscription of unique data, including NFTs, into individual satoshis, along with the BRC-20 tokens, represents a qualitative leap for tokenization in Bitcoin.

This innovation not only expanded the possibilities within the network, but also increased the demand for block space, driving up transaction fees. At peak times, fees represented 43% of total revenue per block, with individual transactions reaching up to US$37.

The arrival of new token standards, such as Runes, promises to intensify competition in the space, especially with the halving approaching. This event, which halves mining rewards, intensifies the competition for an increasingly scarce resource, putting miners in a race for efficiency and innovation.

At the same time, growing institutional interest, evidenced by the approval of several Bitcoin ETFs by the SEC, suggests a significant increase in capital in the market. This dynamic not only favors the appreciation of Bitcoin in the spot market, but also intensifies competition for block space and, consequently, fees.

In the post-halving scenario, the expectation is that recent developments will continue to encourage the expansion and diversification of the Bitcoin network. In the long term, reducing block rewards can be seen not as a challenge, but as an opportunity to strengthen the health and robustness of the network, aligning with the original vision of a decentralized and secure asset.

Disclaimer:

The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing in or trading cryptocurrencies carries a risk of financial loss.