Summary: BRC-20 tokens emerged as a new "token standard" on Bitcoin that mints satoshis with JSON data to create memecoin collections, causing a spike in fees that sparked debate on infrastructure improvements.
What are BRC-20 tokens:
- Build on Bitcoin Ordinals that tag individual satoshis.
- Involve minting satoshis with JSON data about a token collection.
- Allow creating memecoins on Bitcoin but not intuitive.
How BRC-20 started:
- Taproot upgrade enabled data capacity for "minting."
- Memecoin hype presented opportunity to create token standard.
Effect on Bitcoin fees:
- Caused major spike in transaction fees.
- Fees exceeded block subsidy for some blocks.
Bitcoin community reaction:
- Some see as positive for second-layer adoption.
- Others unhappy with unusable high fees.
- May pressure needed infrastructure improvements.
- Unclear if sustainable or a passing memecoin trend.
- Highlighted weaknesses like lack of layer-2 solutions.
- Showed diverging views on desired adoption types.