Bitcoin’s blockchain developers are at odds over the surge in meme tokens, a trend that has heightened transaction volumes and consequently inflated transaction fees on the network. The rise of these tokens, coupled with a rise in non-fungible tokens (NFTs), had led to an 11fold rise in BTC’s transaction fees.
The rise, at one point, saw leading cryptocurrency exchange Binance halt withdrawals over the network’s congestion. These tokens, known as BRC-20 tokens, are an experimental token standard on the Bitcoin blockchain, modeled after Ethereum’s ERC-20.
Some developers, like Ali Sherief, have said they believe the “system is being abused” as Bitcoin was “never intended to serve as a base layer for meme tokens.” These developers believe that BRC-20 tokens jeopardize the smooth operation of Bitcoin as a cryptocurrency.
However, other developers champion the software innovation known as Ordinals, which allows for the creation of meme tokens and NFTs on Bitcoin’s blockchain. They maintain the protocol can have wider applications and that this increased demand for block space is an expected outcome of an auction market and should not be mistaken for a denial-of-service attack.
The brainchild of developer Casey Rodarmor, Ordinals has allowed users to inscribe digital content on Bitcoin’s smallest denomination, the satoshi. Domo harnessed the concept to engineer the BRC-20 token standard, a development that led to the creation of tokens that now have over $475 million in market cap.
As the debate persists, some developers have taken to creating software for nodes to screen transactions they perceive as spam that should be kept off of the blockchain.
Since Bitcoin is decentralized and not controlled by anyone, it is unclear if there will be any long-term resistance to BR-C20 tokens and NFTs. Another scenario is that some people might create a new version of Bitcoin through a hard fork that would not accept Ordinals, effectively splitting the network.
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- Source: https://www.cryptocompare.com/email-updates/daily/2023/jun/05/
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