Daily transactions have rocketed to an all-time high of 682,000 this month, according to data from Glassnode, almost 40% higher than the previous peak in 2017. Bitcoin’s dominance, or its share of the overall $1.16 trillion cryptocurrency market, has swelled to 44% from 38% at the start of the year.Enter BRC-20, the first class of crypto tokens to be built on the bitcoin blockchain, besides bitcoin itself. Nearly 25,000 of the experimental coins have already been minted this year, sending transactions through the roof. “BRC-20 tokens are a phenomenon we haven’t seen before,” said Gordon Grant, co-head of trading at Genesis trading.Primarily due to the creation of these tokens, the average daily transactions over seven days stands at more than 531,000, nearly twice as high as a month ago, according to Blockchain.com data.This new class of crypto has no specific use beyond speculation, akin to memecoins. Yet its nascent popularity points to interest in bitcoin not just as a store of value or payment method, but as the foundation for developing new coins and applications – previously considered the domain of more modern blockchains such as Ethereum and Solana. As bitcoin’s blockchain wasn’t originally developed to support a crypto ecosystem, unlike Ethereum and Solana, BRC-20 tokens are created using ordinals theory, which allows data to be inscribed on each satoshi – the smallest denomination of bitcoin, or one hundred millionth.
“There isn’t much utility when it comes to BRC-20 tokens and Ordinals,” said CJ Reim, contributor at blockchain firm CoreDAO, though he sees the trend as “promising” in terms of interest in building products on the bitcoin blockchain.The race to create these new coins hasn’t had a significant impact on the price of bitcoin, which has been trading under $30,000 since mid-April. The median transaction fee spiked as high as $30.91 versus a range of 90 cents and $4.23 between January and May 1, Blockchain.com data showed. The network has also slowed considerably. The congestion was so acute, that the world’s largest crypto exchange Binance had to briefly pause bitcoin withdrawals on May 7. Although congestion has eased somewhat, it is still elevated and at its peak users were waiting over 30 hours for transactions to be confirmed,” said Nauman Sheikh, head of treasury management at digital asset investment manager Wave Digital Assets. “This has pushed the limitations of bitcoin’s technology.”