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The Buzz Behind: Unveiling the Speculative Truth and Technological Mirage of BRC20

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The Buzz Behind: Unveiling the Speculative Truth and Technological Mirage of BRC20

With the continuous development of the digital currency market, new asset classes and technological concepts emerge constantly, sparking intense debates as the new normal in the industry. Blockchain researcher Haotian commented that he will delve into two relatively new and highly discussed concepts: BRC20 and Taproot Assets. Through his perspective, he will analyze the characteristics, technical foundations, and market dynamics of these two assets, aiming to provide investors with a clearer understanding.

The Market Speculation Nature of Ordinals and BRC20

Ordinals are often overlooked because they are fundamentally a product of market speculation, lacking significant technical content. While some may consider this viewpoint biased, it actually reflects a lack of respect for Bitcoin's UTXO technology. Despite the existence of shilling behavior in the market, it does not mean that trading must be based on misleading premises.

Ordinals: Balancing Fair Issuance and Market Manipulation

The Ordinals system serves as a third-party data index, allowing token deployment, minting, and transfer by users publishing specific data fields on the chain. This design has both its advantages and potential risks. Benefits include characteristics of fair issuance and alignment with miner incentives, while drawbacks include the possibility that the so-called "fair launch" may just be a concept, leading novice users to asset losses driven by FOMO emotions, and making the market susceptible to manipulation.

Taproot Assets: Challenges Behind Technological Advancements

Unlike BRC20, Taproot Assets are more technically sound. They are based on Bitcoin's multisig and hash time-locked contracts for asset issuance, utilizing the Lightning Network for widespread asset distribution. While it can bring long-term utility value to Bitcoin, it also faces challenges such as distribution efficiency, user habits, and scaling channel capacity. Despite Taproot Assets currently having over 40,000 types of assets, their long-term value and operational capabilities remain key factors determining their success.

Can Taproot Assets bring safer and faster token applications to the Bitcoin ecosystem?

BRC20 and Taproot Assets represent two different speculative and technical concepts in the market. While BRC20 may be more popular in the short term, Taproot Assets have undeniable potential for long-term value discovery. Investors should fully understand their respective logics and characteristics to make informed decisions when choosing between them.