Moderator: Alex, Research Partner, Mint Ventures
Guest: LD Capital US Yilan; Well-known Chinese KOL: @BTCdayu
Hello everyone, welcome to WEB3 Mint To Be initiated by Mint Ventures. Here we have continued to ask and think deeply, clarifying facts, exploring reality, and finding consensus in the WEB3 world. I am Alex, the research partner of Mint Ventures. Today we specially invited the well-known Chinese KOL @BTCdayu and Yilan from LD Capital US to talk about the "newborn" BRC20 of the BTC ecology.
Disclaimer: The content we discuss in this podcast does not represent the views of the institutions of the guests, and the projects mentioned do not constitute any investment advice.
host:
Let's get to the point today, let's talk about a newborn in the BTC ecology we just talked about. It has a keyword that is newborn, because the audience may not be very familiar with it. So our first section today will talk about what exactly is BRC20? Then we want to give a common language, or listeners who don’t know much about technology, can know what kind of implementation logic BRC20 is about through our general discussion and narration, and how they trade with conventional ERC20 tokens What kind of difference. The third current BRC20 project may be more representative, because this is just like what Dayu said, he has actually followed BRC20 for a long time, and he actually knows quite well about these. Then we would like to invite dayu to talk about it first, what is BRC20 in your opinion? Then if you have a friend who wants to ask you: "Hey dayu, I want to know more about BRC20, can you give me a brief introduction?" What would you say?
In plain language: what exactly is BRC20?
Dayu:
OK, first of all, BRC20 is the smallest unit engraved on Bitcoin: a string of inscriptions on "Satoshi", which is equivalent to a ledger, and the ledger is a small note, which states that I want to issue a What kind of currency, how much is the total amount of currency, and then how much mint can be mint every time everyone goes to fair mint. In this way, although it cannot be tampered with, because it is written on the Bitcoin chain, it is even said to be the most decentralized form at present, but its weakness is that every small note says: "I issue I bought a dayu coin, how much is the total amount of coins, and then transferred to whom today, how much did Zhang San buy, then how much did he transfer to, and then how much did Li Si take, etc.” This requires a centralized Bookkeeper, he has to take a little notebook to write this down, and he has to keep it up to date. Therefore, the implementation logic will be relatively simple. For example, the smart contract of Ethereum, controlled by the program level, will appear relatively simple. Of course, I think the simplicity can be overcome quickly, and until now, it is actually It has been overcome a lot, that is, there are some technical-oriented views that think that BRC20 has no future, but I think there is actually a lot of prejudice in it, and there are actually many reasons behind the prejudice. For example, I don't know much about NFT and mint, and some people say they are paranoid about technology and so on. Of course, we will not start here, we will talk about it later.
host:
Okay, just now you mentioned a point, that is, in fact, a lot of key information of our BRC20 is recorded on a ledger of Bitcoin, recorded on a "Satoshi", and then its transactions, including its display, actually need to pass A centralized platform, is it more typical? We now use more Unisat, centralized platforms like this.
Dayu:
That's right, Unisat did things relatively early, and at the same time they are relatively well-structured. They open sourced their own bookkeeping logic and bookkeeping methods early for everyone to use. And in fact, OK Exchange (OKEX) also participated in the formulation of their entire ledger very early, that is, everyone works together to do things together. Because the team behind OK Wallet has hundreds of people, they can also be said to be doing this with all their strength. After that is done, after the API is opened later, the ledger will actually be used by everyone, everyone can use it, and each user becomes a node.
host:
Well, I understand. I see that some articles use another adjective or another noun when discussing platforms like Unisat to say that they are actually an indexer. Is it understandable that most of the bookkeeping is actually in Bitcoin? Whether the above inscriptions, content, or data, it is equivalent to Unisat playing a role of converting the data on these chains into something that users can understand and then interact with.
Dayu:
Yes, the understanding is very accurate, because the data itself is on the chain, it is decentralized, it cannot be tampered with, and its characteristics are strongly bound to the Bitcoin ecology and Bitcoin, so it is very OK. But if you want to carry out a transaction well, and even see the balance in your wallet intuitively, then you need the indexer to make a perfect ledger, which cannot be wrong, because it involves funds, and then it must be able to dynamically Update, so the workload and difficulties are not small.
host:
I understand, so now including Unisat, including OKEX as you just mentioned, everyone is actually still working on the basic work of indexing, and is still doing a lot of standard formulation, including some implementation work.
Dayu just talked about what is BRC20 and the logic of its realization, and maybe one of the most important roles is the index provider, which is also a role of the trading platform. Then we will invite Yilan to talk about it, that is, when you first came into contact with the concept of BRC20, what was your understanding of it? If the people around you are interested in him, how might you mention some interesting points of the concept to him?
Yilan:
In fact, the concept is understood as follows: it feels like a very simple concept, but in fact it is quite difficult to really understand or explain it clearly. I think what Teacher Dayu said just now is very easy to understand.
The technology behind it, its basis is actually the first NFT protocol Ordinals on Bitcoin, which is a token rule made using the NFT protocol of the Bitcoin network: it is actually very simple, including several strings of codes, Then the code may stipulate, for example, OP, is it deploy, or mint or transfer, and then it takes, what token are you? Then the token can only have four characters, which is the rule of BRC20. Then maybe it also has such rules: including its Max, what is its maximum number of operable tokens? Then what is its limit? Probably such a set of rules. Then its rules are input with such a set of JSON data. But in fact, it seems that the community also has a lot of criticism, and it is relatively inefficient to use JSON data to make rules. But because BRC20 is equivalent to the first token standard deployed on the NFT Bitcoin protocol, it is also an experimental representative, so it is the founder, the DoMo who proposed the Ordinals inscription in JSON data format. The latecomers will slowly optimize this thing, and then see if some more interesting projects can evolve.
host:
In fact, just now we mentioned that whether it is Ordinals or BRC20, the birth time is very short. Let me check the information here. BRC20 was officially proposed here. It was the community user mentioned by Yilan just now. He actually proposed it officially on March 8 or March 9, and then he proposed such a standard , so the birth time is about two months now. But at present, the entire BRC20 trading market is very hot, including the types, the number of users, and the trading volume. In fact, it has created a very fast growth rate. Therefore, as a new thing, it has many differences and challenges. So among the many projects, what many audiences may be very interested in is what are the hottest or most popular representative projects of BRC20 projects in the market?
Currently popular BRC20 representative projects
Dayu:
The mechanism of the BRC20 project is that anyone can issue one, so if we currently enter a 4-character character on the Unisat website, even including special symbols, as long as it is not released by others, we can issue it. So now I have a look at the deployment. There are more than 4,200 projects that have been deployed and completed by mint, and then there are more than 20,000 projects that have been deployed but have not been completed by mint.
Because the characteristic of BRC20 is that it has no complicated functions, it is a token, only quantity, and it itself does not have smart contracts, pledges, or even pledges, etc., so it is basically a transaction that can only transfer A meme coin for . So in this case, most coins don't actually have much value. Because in each ecology, there are actually only a few meme coins that can be raised, because everyone's funds and concerns are always the first. Then in the current ecology, $ORDI is the most worthy of attention, because the currency is actually the first currency deployed after the BRC20 protocol, so its status is equivalent to the status of Bitcoin in the currency circle, because after Bitcoin , we see that there is Litecoin with optimized speed, and then there are various more advanced protocols of Bitcoin, various currencies, forked coins: what is Bitcoin Gold, Bitcoin Diamond, Bitcoin God, Lightning Bitcoin all It’s no good, even Bitcoin Cash, which is said to be promoted by big funds, and Satoshi Oban’s BSV, etc., all disappeared in the end. From this point of view, it is the BRC20 of Genesis, the coin of Genesis, as long as the BRC20 protocol, the Ordinals protocol, the Bitcoin ecology and Bitcoin can continue to develop, then it is likely to be able to continue to develop along with the ecology. So I would recommend that the most worthy of attention is $ORDI.
host:
Here I have a small question, like the Ordinals project, its issuer, or its operator, is it real-named or anonymous?
Dayu:
I don’t remember very clearly, it seems that DoMo sent it by himself. He wrote the agreement and sent it by himself, but I remember that after he sent it by himself, he didn’t have much mint. It seems that his currency holdings are very small, so this is also It embodies a very decentralization.
host:
clear. Well, in fact, through some of the main information we just talked about, I believe that most of the audience should have a preliminary and complete understanding of the concept of BRC20. Then we will talk about some more in-depth topics later. The first thing we want to talk about is that after BRC20 came out, many people began to examine it from multiple angles. Many people asked questions: "Now the first ERC20 token One is already very popular, and I use it on Ethereum very smoothly, and there seems to be no problem, so why do we go to the Bitcoin network to create such a homogeneous token? The necessity of its existence is What?
The necessity of the existence of BRC20 tokens
Yilan:
Okay, I will look at the necessity of BRC20 from three perspectives. The first is that first of all, it satisfies the willingness to conduct many experiments and innovations in the Bitcoin ecosystem. It exists as an experimental field of the Bitcoin ecosystem. Anyone can do this. Why should I go there? Do? Then why not go there and do it? That's the problem.
Then the second level is BRC20, which is the influence of BTC, and then includes the number of BTC users and the value of these emotional overflow assets on the chain. I think these assets will be BTC Layer 2, not to mention the entire ecology. It may become the initial liquidity of the DeFi ecosystem, including the most prosperous Stacks, and ALEX Lab on it has also listed a batch of BRC20 assets, and these assets are actually the initial liquidity.
Then the third point is that the simpler things are, the more acceptable they are. It may include the name of BRC20, which makes people think of ERC20 naturally, so it is better for everyone to pay attention, and Bitcoin has a natural one. A very large and strong community, so there is a basis for reaching a consensus, and then the distribution of BRC20 tokens is fair enough. So combining the above points, I want to say that it may be a small step for the entire BTC NFT ecology, but it is a big step for the development of the entire BTC ecology, that is, it will attract more people's attention to the BTC ecology, then Controversy and topics can also prompt the BTC ecology to enter a new stage of development.
host:
I understand, I think what Yilan just said is quite interesting. Because Bitcoin itself, as the world's largest cryptocurrency, holds the foundation of the plate, its users also hope to usher in some fun things, new innovations, and its consensus foundation is large enough to have great potential Flow, a huge force. Another Bitcoin itself, we just talked about the Stacks, which is a second-tier project of Bitcoin, and these second-tier projects may also face the problem of lack of native Bitcoin ecological assets, so like BRC20, although it is not smart yet Contract type, but it can theoretically be migrated to the second layer, because it provides them with a lot of initial native Bitcoin ecological projects. And the third possibility is that Bitcoin supporters also look forward to more new ways of playing, and then they can also have more imagination about new projects in the Bitcoin ecosystem. reason. So do you have any other views on this issue?
Dayu:
Answering the question will actually involve the difference between meme and other memes, so I want to answer the question systematically and in general. From two aspects, one is what is a meme? Then what is the difference between the meme on BRC20? Then why do you say that it is necessary to exist?
First of all, in terms of meme, I will actually have a big change in my understanding. For example, in 20 years, I even wrote an article to criticize this type of currency. Because I think the blockchain is a great revolution, I pay attention to technology and value, and I look forward to some projects, which are high-end and elegant, and then change the world, and then enable the world to better understand our blockchain and our entire society. The Web 3 world. At that time, I was very repulsed by meme, thinking that it was a fast-running fund game, as if it had no value, but then my point of view, like most people, would change a lot. Because we review some projects, such as EOS in 2017, he was basically bought by every person in the currency circle at that time. Then in 2021, there will be four heavenly kings, $FIL, $ICP, $DOT, and $ALGO, each of which is carrying a lot of aura, and has many powerful technologies. It seems that they have to do a lot of things, but When we look back at these projects, the stories they tell are grand, but they either have highly concentrated chips, and then retail investors become the takers of the stories. Then the price of the currency keeps falling, and the retail investors come to the currency circle for the only one, or the main purpose, is to make money. If it is said that among these projects, the largest number of consensus providers in the entire market lose money on these projects, it is actually very depressing.
Then in 2023 today, let’s look at the top projects of OP and Aave, for example, there are many real use cases on them, and there will also be roles in several aspects such as institutions, project parties, and retail investors. But these projects of theirs still have a characteristic, that is, the bargaining chip of the organization, and the bargaining cost of the project party is very low, so it is a good project. However, retail investors still have natural weaknesses when participating, and they will always pay for some grand narratives. Then let’s be right again at this time, for example, the upstart $PEPE on meme, its value is 0, and its commitment to the future is also 0. The only thing it does is to pull the market up. Retail investors buy and wait for the rise, so early participation and early benefits On the surface, it is a very simple and stupid Ponzi game, but in essence it caters to some great needs in the current currency circle. But when we look at $PEPE again, we will find that it actually has problems, because behind it is actually a strong outfit, with a lot of funds, a large organization is operating, and there are very professional businessmen. Because there are ships, The cost of pulling the offer alone may be in the tens of millions of dollars. Behind the meme coin is Dazhuang, without Dazhuang, it cannot rise, but its risks are also there, and the pull is ultimately for the purpose of smashing the market. So at this time, people will have an expectation that there is a fairer... Then I think BRC20 caters to the demand very well at this time, because everyone on BRC20 can openly sell it, even if it is a currency like $ORDI , his founder, did not have much mint after deploying the token, so there is no banker behind him. But without the control of the banker, there may be tens of thousands of meme coins on Ethereum. Without the control of the banker and without the project party, these coins will all return to zero.
But $ORDI has a huge difference, that is, it is the narrative of the entire Bitcoin ecology, and it is a bit like people now call the big pie called BTC, and the small pie called $ORDI, so there is a consensus behind it, that is, everyone's understanding of Bitcoin An expectation of the ecology, a recognition of the Bitcoin chain, so behind it is an unprecedented new form of meme, which is no longer the same as the meme controlled by the dealer. It is a kind of retail thing that is supported by everyone's consensus, very similar to Bitcoin.
host:
OK, there is a point that dayu just said that I didn’t fully think of before. Even if we don’t consider whether there is a banker, there are actually many meme projects on Ethereum. It has already died, and it may have scattered chips, so it did not succeed in the end. There are actually quite a lot of such projects. But as a project like $ORDI, the difference between it and these traditional massive memes is that it is BRC20. If we tentatively decide that it is a very important development direction, then it is the first among the very important development directions. items. It seems that the blockchain is a very important development direction, and Bitcoin is the first encrypted project that commercializes the blockchain, so Bitcoin occupies a strong orthodoxy, with a Can the high consensus value be understood in this way, instead of saying that it is different from those regular memes on Bitcoin itself? Can it be understood in this way?
Dayu:
Yes, it is the coin $ORDI, because one of my views on BRC20 is that most of these coins on BRC20 are worthless, maybe only the top ones are valuable, so I just said $ORDI directly. Regarding $ORDI, from the perspective of retail investors, from the perspective of investors and market consensus, there are actually several major differences. One aspect is that the chain it is in is different, because the coins on different chains, its consensus, and its upper limit of value will be different. For example, $SHIB, the head of the Ethereum chain, reached a market value of 30 billion at its peak, a market value of 30 billion US dollars. On other chains, the weaker the chain, the fewer people, and the worse the consensus, the lower the market value of the meme project on it, so the second meme coin project that appears on the Bitcoin chain must be very good. of.
The first one, of course, is Bitcoin itself. The second point is that its distribution method is the same as that on Ethereum... You will notice that when many meme coins are issued, it will reserve 10% for the team and 5% for listing, and then for some projects it will say no Reserved, but it can be bought in advance before it is actually announced to the market on a large scale, so the only thing that is really fair is that there are very few people like $ORDI who even deploy it.
Then there is a big difference in expectations. Everyone buys meme coins for the sake of price increase. The most expensive meme on Ethereum may be better with a market value of 100 million US dollars, and even better is 200 million US dollars. , and the particularly good ones may reach 1 billion US dollars, and the top ones, like $SHIB, are billions or tens of billions of dollars. But our latest $PEPE (big hit) has a market value of up to 2 billion, and then everyone will compare it with the head of the Bitcoin ecosystem. It is reasonable to be stronger than the other side, but its price today Calculate, its price today is 15, if the total amount is 21 million, the market value is about 300 million. So in general, for the market, for everyone, whether it is retail investors or stakeholders, everyone will think that this is a good target, and the consensus is to gradually form. If it is said that he only needs to live longer, then Lin The stronger the Di effect, the more likely it will be able to lead a new narrative in the end.
host:
I understand, so in fact, the core thing is that dayu is optimistic about BRC20. We say that the first son of the Republic is the particularity of $ORDI itself, including the fairness of its distribution and the contingency of history, which has built such a unique value. . As for these secondary projects of BRC20, dayu talked about $ORDI just now. Does Yilan have any other views on these secondary projects? It is similar to those meme coins we traditionally play, including $SHIB, including $PEPE These, do you think there are some other differences?
Yilan:
I have the same opinion as Mr. Dayu. I also think that $ORDI is currently the only currency that is valuable when consensus is reached. In the short term, other BRC20 coins are the same as meme coins. Any fundamental analysis They are all invalid, and we can only look at emotional heat and market funds. But in the long run, for a mature project, its value precipitation still depends on its moat, including its innovation and pioneering, including the strength of its consensus formation, and its technical path. Of course, it is not applicable to meme. $ORDI itself is pioneering, so it is valuable in terms of scarcity and pioneering.
host:
And just now we have talked about these meme coins on BRC20, those meme coins on Ethereum, and especially $ORDI as a special one among the many meme coins of BRC20. What are the main differences between them, in fact, come from the consensus It is unique, it is the first project of BRC20, and then it has some very peculiar commonalities with Bitcoin as the first blockchain, so we know that no matter how good the project is, no matter how strong it is Consensus foundation, or no matter how good the technology or business model is, it still needs support from the industry to go further and have a greater influence. Well, like BRC20, we still look at it as an overall new thing. We are not only talking about the $ORDI project. For a project like BRC20, whether it is the Bitcoin industry in the entire industry, or the entire blockchain industry Well, which are the ERC20 developments that are good for them? Who are its potential supporters, according to the two?
Who are the potential supporters for which forces are beneficial to BRC20?
Dayu:
The explosive speed of BRC20 has actually exceeded everyone's expectations, and the reason behind it is often that this one thing, this concept, and this narrative can be endorsed by many forces. I talked about the explosion of BRC20 before. Behind it is the right time, place and people and several angles.
From the perspective of timing, when Bitcoin is halved, its output will drop, which is very useful in the big cycle of Bitcoin in the past few years. After the halving, it will rise because the output has decreased. But as of now, the daily output is actually only 900, which will be reduced to 450 when it is halved next year. But in fact, this is insignificant compared to the current daily transaction volume of the entire network, and the total transaction volume of hundreds of thousands. The market actually needs a new story, and this new story is what everyone is looking forward to. From the big holders of Bitcoin, they hope to rise. Even if you don’t hold Bitcoin, as long as you are in the currency circle, you will also hope that Bitcoin will rise, because only when the big brother rises, can other coins be able to rise. So the consensus is the timing. Everyone thinks that Bitcoin is going to tell a new story, so I say the time has come.
Another aspect is the geographical location. It turns out that Ethereum has achieved great development in recent years. What are you doing? Including playing NFT, including all kinds of things, are denominated in Ethereum. At this time, Ethereum denomination will make Ethereum a hard currency, which will be very beneficial to Ethereum after becoming a hard currency. But now Bitcoin, people rarely use it to transfer money, there is very little, and even many people do not hold Bitcoin, especially those who are new to the currency circle. Then through the Bitcoin ecological story, through the BRC20 story, we can also see from the data on the chain that it has some inscriptions on it when the concept of Ordinals is proposed. When some NFTs are there, the Bitcoin ecology and the Bitcoin chain are somewhat active. Increased, but not large. Until the concept of BRC20 exploded and everyone went to trade various new currencies, it started to be extremely blocked, so behind these concepts, including talking about the future, or what is already being done is Lightning network, payment, etc., in fact, this may give us an imagination, that is, the era of Bitcoin denominated in "Satoshi" has arrived. If everyone has a Bitcoin wallet, then the era of "Satoshi" denominated, then It's all good for Bitcoin. The favorable location actually echoes the previous weather.
The third is human harmony. I think first of all, at the level of miners, they are of course happy to see the results, because what miners are actually worried about is that when they are mining, they will produce 900 miners per day, and miners around the world will divide them. Then the computing power of the entire Bitcoin network is still rising, and everyone can only pay for electricity bills, hoping to reduce the cost, but if the price of the currency does not rise, for example, if it falls to $16,000 or something, many small miners will not be able to support it. Just shut down. But more people shutting down is not a good thing for the security of the entire network. So at the level of miners, through the development of the Ordinals ecosystem and the explosion of BRC20, the handling fees they earn may be worth a year for a month, which is a happy result for them. It’s just that miners, including top-level miners like Bitmain, have not expressed their views, but it is actually the best thing for him not to express their views, because if he expresses his position now, it may trigger some problems, including the core development team. For some intermediate disputes, peace and development may be the best right now, and it is best for everyone.
The second level is investors in the primary market. In the past two years, investors in the primary market are actually very difficult to do, because I usually help my friends to watch some first-level projects, and many of them are actually first-level projects. The valuation is not low, and when you invest in it, the tokens are locked, etc., and many things cannot be seen in the early stage, but it is amazing to see the various returns of everyone investing in meme coins and BRC20. So I noticed before that investors in the primary market feel some emotional fluctuations.
Then from the perspective of retail investors, it is everyone's new stories, new funds, and new stories of getting rich, and then attract more people to come in. In fact, the development history of our currency circle has always been like this. Every round of bull market and every round of sudden wealth will bring more newcomers to enter. Basically, it is the same as the development history of Wall Street. It is speculation, and then generates bubbles, attracting more People come in, and then the last thing left is the value like this.
host:
On the same topic, the current development of BRC20 is optimistic about him, including related interests, which are beneficial to them. In addition to the first retail investor mentioned by dayu just now, there is no doubt that retail investors also include those who hold BRC20 itself, as well as those who hold Bitcoin and the smallest unit of Bitcoin, "Satoshi". I hope that the Bitcoin ecology can become popular, which can drive up the value of Bitcoin and increase demand.
The second dayu mentioned the mining ecology. Miners include manufacturers of mining machines, and BRC20 can bring new project investment opportunities. New speculative opportunities can drive investors in the market atmosphere, first-level investors, these are all We are happy to see the development of BRC20. In addition to these aspects, in Yilan's view, because Yilan also comes from an investment institution, we know that LD Capital has very frequent project screening and specific investment actions no matter in the first or second level. In your opinion, who are the possible stakeholders related to BRC20? Are there any other angles?
Yilan:
First of all, miners, miners must be the most directly beneficial group, I saw a data, the transaction fee of miners for the whole year last year, the transaction fee they received was only 5400 bitcoins, and then I just looked at BRC20 According to Dune’s panel, it now has more than 1,100 BTC fee income, which is about 20% of a fee increase. And if it is only calculated based on the current situation... The reason why I have a point of view is that the development of BTC Layer 2 or the BTC ecology is a relatively deterministic event in the long, medium and long term, because the security budget of the entire Bitcoin is in the It needs to be solved in the medium and long term. If there are only block rewards, then no matter how high the currency price is after a few years, there may be no way to keep the Bitcoin ecosystem safe. So from this perspective, I think BRC20 is just a trigger, and BTC DeFi is the big story. How to solve the problem is that users know that the security of the BTC network is the greatest source of system value, and they will not let the miners have no money for many years, but the proportion of the service fee contributed by the entire BTC transaction to the entire miner’s income may Just a few percent.
host:
Yes, 1-2%, normally.
Yilan:
Yes, so it is unsustainable in the long run, that is, how to obtain sustainable income like Ethereum, so I think whether it is from the perspective of miners or from the perspective of the entire BTC ecosystem Participants, from the perspective of all Staker holders, BRC20 is a trigger, and its potential supporters should be people who benefit from the BTC ecology as a whole. Of course, there are many such as "Bitcoin Maximalism". They think that the unlimited occupation of transaction blocks is a wasteful behavior, because before the BTC network was mainly for transactions, many of them may really need to use the network for transactions. People, there is no way to bear the network fee, but I think it is a problem that can be solved. In the long run, the prosperity of the BTC ecology is a thing that is beneficial to the entire ecological participants.
host:
Let me add a piece of data here. Just now we talked about the security budget of miners. Our so-called security budget is actually how much rewards the BTC network can provide to miners so that they can stay and continue to use computing power to maintain the BTC network. Safety. Because we know that most of the current rewards are actually the few bitcoins produced by each block of bitcoin, so how low is this number? According to past data, miners are rewarded most of the time, and the transaction fee only accounts for 1% to 2% of it. When it is high, it may be 3% to 4%. But these two days are the peak period. Due to BRC20, due to The popularity of inscription transactions created a huge volume on May 8th, when the handling fee on that day accounted for 42% of the total rewards given to miners. This can be understood as about 30-40 times the daily handling fee ratio, or about 20-30 times, but the last time the situation happened, it had to be traced back to December 2017, which was the last wave At the peak of the bull market, Bitcoin transfers were also very frequent at that time, and it was also a short period of time. Of course, these two days are the trading volume of BRC20 tokens, and the popularity has declined, but as of yesterday, it seems that the proportion of his handling fee can still account for about 10%, which is still about 5-10 times that of the daily period. This is an approximate industry data.
Then we just talked about a lot of forces supported by BRC20. In fact, I think there may be another support force that comes from the exchange, because we know that it is still in a bear market stage, and some people say that it is the early spring of a bull market. , but let’s not argue, at present, the narrative of the entire market is actually relatively thin, and there are not so many things that can be traded. So at present, BRC20 seems to be a hot topic. If the exchange is actually happy to see its success, the exchange is a big casino after all. They must hope that gamblers will trade in it, then BRC20 is currently a point where everyone has a lot of differences, and differences also mean that there is a large amount of trading volume, so in my opinion, exchanges may also be very happy to see BRC20 grow up. Like OKEX, including many project parties, many platform parties have already listed tokens, so exchanges may also be a potential support force.
Then we just talked a lot about BRC20, its birth, its benefits, and some of its unique consensus foundations. Then we may now turn to talk about some of the differences and debates brought about by BRC20. Just now Yilan has mentioned that many Bitcoin supporters, what we call Bitcoin Maximalism, including some different voices from the developer community, believe that Bitcoin was digital gold when it was born. It exists as a point-to-point trading system. Well, the current meme tokens like BRC20, or the creation of a large number of NFTs like the Ordinals, or the bookkeeping needs of inscriptions similar to NFTs, occupy the space originally used for BTC normal transfers, which means It turns out that the cost of maintaining my basic functions has risen dozens of times, which will affect the intrinsic value of BTC as digital gold and a value storage network. Therefore, many people oppose the development and existence of BRC20 . In your opinion, is the existence and development of BRC20 harmful or benign to the development of BTC in the long run? Then what are the reasons for each of them?
Is BRC20 malignant or benign for the development of BTC?
Dayu:
There are indeed some controversies at present, and the most important controversy is that we will be most concerned about the core developers of Bitcoin, so I went to one of their forums, and I read all the above discussions about BRC20 and network block congestion It's over, after reading it, you will find that there are several categories of objections: some just think that Bitcoin should be, so it shouldn't have these complicated things. Some say that congestion will slow down the transfer speed, and some will put forward some opinions of their own, and feel that we should not interfere with the development of the ecology casually, etc. In fact, there is also a tug-of-war between the two sides, and during a discussion, But I will notice that most of the time the objections do not come up with a good solution, how to solve the problem of how to solve the problem that the transaction volume of Bitcoin will decrease in the future, or how to maintain network security without increasing the number of miners, so I think that in the long run It looks benign.
Because of the new things of BRC20, in fact, it currently includes NFT on the new Ordinals protocol, etc. It tells a new story for the Bitcoin chain, and the above NFT is actually showing signs of becoming popular now, because many of my favorites I know a lot of Ethereum big NFT players, or old players, including many monkey holders, they will say that they feel hairy when they hear the words Bitcoin NFT, and they suddenly feel dull about it. Tasteless. Because Bitcoin's NFT is completely engraved on the Bitcoin chain through the Ordinals protocol, its storage method will be more trustworthy than the original Ethereum through indexing. Then the storage method and so on make NFT actually have a good room for development.
And BRC20 is even more so, because there is actually a difference between NFT and coins. Most transactions of BRC20 tokens may be transferred to centralized exchanges, because the experience is also very good. Then NFT may continue to stay on the chain, but NFT is not a big problem because of its relatively low liquidity. It will make the chain active, but it will not affect the use of the chain. And as Yilan mentioned just now, the BTC-Fi narrative is actually very good, and it will bring more vitality to the ecology. In fact, when Satoshi Nakamoto answered a miner’s question in 2010, that is, what should I do if the output of mining is not enough in the future, he said: “I’m sure that within 20 years, the transaction volume of Bitcoin will either be very large or not. "In the past few years, we would translate this sentence as: We hope that Bitcoin will continue to rise, and the transaction will generate a 1% handling fee. As long as Bitcoin rises high enough, the miners will be rewarded. But in fact, if we look at this sentence carefully, it obviously refers to the transaction volume. If there is no BRC20, if there is no Ordinals agreement, then we will see that the transaction volume of Bitcoin is very small, and it may become more and more It is getting smaller and smaller, so I think this matter is benign in the long run for the interests of all parties.
host:
OK, well, just now dayu also talked about his own views on the long-term impact of BRC20 on Bitcoin, and there are quite a lot of perspectives. What about Yilan?
Yilan:
Okay, my answer is still very simple, that is, in the long run, stable fee income in addition to block rewards must be essential, but the occupation of ledger space does not necessarily exist in the form of BRC20. Whether it is BRC20, BTC, or NFT, they may become the original assets of the production behavior on the BTC chain. As I said just now, the prosperity of the BTC DeFi ecology or more derivative ecology will be a better way to use the ledger space.
host:
During this period of time, I also looked at the views of both parties. In fact, I think the core difference between the views of the two parties is actually one point: BTC is a globally distributed, permissionless ledger. How should the ledger space be used? The opposing opinions are actually the core point of view: BTC ledger can only be used for BTC transfers, and can only be used for a transmission of value storage, so what violates the law is infringing on the value of the BTC network. This is their core argument and starting point.
Then those who support or at least those who hold no objection, they think that BTC is a network without censorship, it has such a BRC20, there is such a phenomenon and the existence of the scene, it is built by people's needs, then if this is the case, People have the right to use it and develop it, because after all, the vitality of the network, the vitality of some networks may be beyond our imagination beforehand, and the vitality that emerges naturally may be its potential future development direction.
There are also some, no matter whether they are related to interests or out of industry considerations, they think that what dayu and Yilan just talked about is the BTC network. In addition to value transfer, it needs more The use case is also a reason why they think they support it, or at least not against it.
In fact, we talked a lot just now, which is the main network of BTC. After all, it can only support 7 transactions per second, and its capacity space is limited, so its second layer is also good, such as the Stacks we just talked about. , including Lightning Network, in the long run, more high-frequency transactions and prosperous transactions may be transferred to the second layer. In your opinion, whether it looks like BRC20 or the inscription of Ordinals, will it be transferred to the second floor? Or just as dayu mentioned: BRC20 tokens are often traded on the exchange, and more transactions occur on the exchange, like many meme tokens, so the exchange is actually a bit like a second layer of Bitcoin , similar to a Lightning Network. Then these BRC20 tokens and the NFT inscriptions in Ordinals are transferred to the second floor. For these tokens or NFT, in your opinion, has its value increased or weakened ? What is its approximate logic?
Is the value of the transfer of BRC20 token transactions to the second layer weakened or enhanced?
Yilan:
In fact, my point of view is this. I think that if the gas fee is reduced, if it reaches the second layer, and then it can alleviate the huge gas fee on the Bitcoin original chain, then from the level of scarcity decline, its value will increase. weakened. But from the perspective of lowering the threshold and expanding the entry of potential users, it is also easier for later people to come in and hype. So in fact, I think it should be some targets that are good for blue chips. Of course, it is also based on what I said before as BTC DeFi, because if there is Layer 2, there will be all other things on Ethereum Layer 2 that can be built, theoretically speaking. So if he has entered Layer2, it will benefit these blue-chip targets.
host:
I understand that Yilan's core point is to move to the second layer, because less transaction friction will bring more users, which will lead to higher turnover. Then and once you enter the second floor with some DeFi as support, these DeFi will bring more usage scenarios to these NFTs or blue-chip BRC20 tokens, and then construct new demands, so that their intrinsic value may be It will go up a little bit more.
Dayu:
I first have a framework for thinking like this. I think that in BRC20, for example, Ordinals, I think the value it carries is actually a meme, and the history of meme makes meme follow the development of the entire ecology to rise, and then attract More new users come in, so if it can complete the task of pulling new users, then its task is considered very good. Then after the influx of these new users, in addition to saying that they can trade coins like $ORDI on the exchange, then they may need to pay more attention to the development of the second layer. On the second floor, Yilan just mentioned a lot of possibilities, such as BTC-Fi, etc., as everyone installs more and more bitcoin wallets, after everyone enters the second floor, no matter whether it is to pay offline or "Satoshi" really bought a pizza as a unit, and then said to engage in some applications similar to DeFi, etc., it is a whole ecosystem of developers and users, even if there are users, developers will continue to increase two Circular progress in all aspects, and then make the entire Bitcoin ecology prosperous.
Then as for whether BRC20 and the current inscriptions including NFT itself are transferred to the second floor, whether it will be weakened or reduced, I think it is not so strongly related to its value. For example, take $ORDI as an example, it is traded very quickly on the second floor , or more users after entering the exchange, basically we think that as long as more users can access it more conveniently, its price will rise more easily. At present, $ORDI may still not be as smooth as the exchange on the second floor, so I think the impact is not that great.
Then as for NFT, it has a greater impact, because NFT is placed on the Bitcoin chain, it has no function, it only has a function similar to mem currency. But the current NFT on Bitcoin is very expensive because of the gas fee and so on. Then when a project party makes a good NFT on the Bitcoin chain, then it will definitely expect more operations, and then more practices, more gameplay, and attract more people to join, then it will enter Going to the second floor will also make more sense. Of course, it is a whole among all these cycles, that is, BRC20 and NFT bring more new users, new users enter the second layer, and then the ecology of the second layer becomes more and more with the joint efforts of developers and more new users. Bigger, and at this time, a more prosperous second layer takes BRC20 tokens, such as $ORDI, into it and transfers it, there can be many use cases there. For example, I will think of some interesting use cases. For example, if you install a bitcoin wallet on your mobile phone, and there is $ORDI in the bitcoin wallet, then $ORDI because it is not as expensive as bitcoin, then I can use $ ORDI to buy, to use some daily life scenes and so on.
host:
Well, the topic we talked about today is actually quite deep, that is, we talked about the origin of BRC20, its source of demand, and some stakeholders behind it, and whether its relationship with Bitcoin itself is benign or vicious. We talked about it If the possible impact of going to the second floor, then we will enter into the two most critical questions I think today. I would like to ask you to answer these two questions separately.
The first question is that if we want to go further than the current ecological influence and prosperity of BRC20, and reach an exponential level, is there any room for greater narrative? Where, if any, could it have come from? This is the first question. The second question is that if a larger narrative space is achieved and developed, what key nodes may there be along the way?
Looking forward to a larger narrative space for BRC20
Dayu:
Then I will think about these aspects, one is the wealth effect, which is an eternal topic in the currency circle, that is, if the top token $ORDI does not rise, then the story behind it is actually not easy to tell. In the current situation, because it can not attract more users. I checked the background data of an exchange (they sent it out), and then I saw that the current trading volume of $ORDI is still in the top of all these meme coins, which is not bad at present. Because there is no banker behind $ORDI, but I am thinking about one thing, that is, $ORDI has a current market value of 300 million US dollars. If an investment institution has, for example, 500 million US dollars in funds, or 200 million US dollars The funds need to invest in currency circle projects. At this time, in addition to large-cycle investments such as BTC and ETH, there is also an option to participate in the early stages of some top projects, such as projects like Aave, but these Institutions with ordinary projects may not have the opportunity to invest, and then when they invest in more uncertain new projects, the risks and returns are actually very uncertain. This is because after watching a lot of first-level projects, I feel that sometimes I may see 50 projects, but none of them are worth looking at, but their valuations may not be low.
Then I will think about one thing, if I am the person in charge of a certain institution, then I would like to say that if I take 10% of the funds to buy $ORDI at the current price, I mean the current price, for example, if I buy $20 million, I think is an acceptable ratio, right? Then if I say that I bought such a small proportion, and then I occupy a relatively large position, in fact, I can actually affect the price of the entire $ORDI. It is similar to the thinking of doing business. Doing business means that the more chips you have in hand, then you can control the rise and fall of the market.
Of course, this is relatively complicated, but the logic is like this, then in this case, you will be in an invincible position, and it will also help the development of the entire $ORDI and Bitcoin ecology, because we have analyzed this matter in many ways. It is beneficial, so I think that VCs who see this, and big miners, such as Bitmain, actually have the motivation to do such things. It is because its current market value of 300 million US dollars is much more certain than when the narrative was not up two months ago. If it is 300 million US dollars, if you take 50 million US dollars, it means that there is a relatively radical organization to control the plate. In fact, it is very easy to inflate the price of $ORDI very high. Of course, it does not mean cutting leeks. In fact, this is a behavior that is very beneficial to the entire industry and itself. Then it attracts more new users, and then catches up with the big cycle of Bitcoin halving next year, a big narrative. So I think this will be an interesting point.
The second is the new story of Bitcoin ecology. Some of the smart contracts, lightning payments, lightning network, and BTCFi that have already been mentioned above.
Then the third is the development of NFT. In the last two or three days, especially the NFT on the Bitcoin chain in the last week, some native NFTs, the most popular one is called BTC Frog, and everyone is very popular because it is Original and original, the original team has succeeded. But other than it, there are actually a few others, including monkeys and PUNK, which are all copied directly from Ethereum, and even face copyright issues.
Therefore, the NFT on the entire Bitcoin chain has a lot of room for imagination, but the above projects are still very early, so if there are very powerful projects emerging on it, it may even be said that there is a brand like Azuki, In other words, it is very possible that a brand like BAYC will come out with a better project. For example, Yuga is a big project worth billions of dollars and tens of billions of dollars. If such a big project appears in our Bitcoin ecosystem, it can actually lead to a very big story, so I will Think more from the perspective of retail investors in the market, because everyone still looks at whether there is a wealth effect.
host:
According to what you just said, because dayu is actually talking about some mid-term and long-term judgments, including whether there are any institutions that will intervene in $ORDI for a long time, including the development of the industry, including some developments around BTC-Fi. If there is a specific point, in fact, we found that there are quite a few exchanges that have already listed $ORDI, especially some second-tier exchanges, such as Matcha, including Bitget, they have already listed, then these exchanges are in technology. It supports the charging and withdrawing of BRC20 faster on the Internet, because it seems that it can only be charged now, and it seems that it should not be withdrawn. If this step is completed, how long will the time period be?
Dayu:
I estimate that it may be about a week, including OKEX may be listed very quickly. In fact, I met with the CEO of Unisat twice last week and talked for a long time. Then I realized that there are so many people in the industry working together, including OKEX’s wallet and a team of hundreds of people. They entered Unisat very early. Unisat's team is relatively small, and everyone is working hard to build standards. And the construction of the standard is actually not easy, there are many technical problems in it, so we see that there are some small exchanges, the second and third tiers, they go up early, the reason is nothing else, that is, they may have underestimated them. Due to technical problems, it will become more prudent to open the withdrawal of coins in the future. Now OKEX, including Unisat, they are working together. According to the information I have learned, it is their cooperation agreement, which also includes an open API, that is, everyone can use a unified standard to deposit and withdraw coins. It's been a few days.
In the future, I estimate that all exchanges will soon support deposits and withdrawals. In this case, there will actually be a wave of upsurge in the short term. But an interesting phenomenon is that as far as I know, Binance does not seem to be involved in this, and then they may want to be like BNB, and they may want to have the opportunity to lead a set of standards and the like . But now a very interesting phenomenon is that OKEX is actively promoting the BRC20 ecology, including after the zkEra mainnet is launched, everyone knows that OKEX has not yet opened deposits and withdrawals, and they put all their technical energy on $ORDI The ecology is put on BRC20, so I will look forward to seeing such an exchange led by the industry's top exchange, as well as the wallet and various stakeholders to promote such a thing together, it will go to the end which step?
host:
Dayu just answered what we talked about. If BRC20 will go from success to more success in the future, where the narrative space it may encounter comes from. Then what key events might there be? Then we would like to invite Yilan to have a chat. If BRC20 has not been implemented in the end, our so-called failure actually means that most of the BRC20 asset prices are constantly falling, and then there are no more new BRC20 projects. If it is defined as failure, then the possible reasons What? Then what are the key events that may be caused?
What are the possible reasons if BRC20 does not start?
Yilan:
I still think that BRC20 will not disappear, that is, what we call failure is losing popularity. The reasons can be divided into internal reasons and external reasons. The endogenous project is BRC20. In fact, Mr. Dayu mentioned Binance just now, and he is working on his own ORC20 standard. BRC20 actually has a problem within himself, but this problem may not be of particular concern to retail investors. Then there is the issue of token liquidity, that is, the liquidity of many, many BRC20 tokens is relatively poor, and many of them have prices but no market.
Some external reasons may include some deterioration in the chip structure, and then retail investors will lose confidence, including other flows of funds in the market, and other hot spots, including miners may have a better way of earning, these These are all possible reasons for the loss of BRC20 heat.
host:
clear. I heard another friend tell me today that she is relatively not that optimistic about BRC20. Her reason is probably as follows: first, she thinks that most of the current BRC20 projects, in terms of smell, the so-called smell is a project Some vague signals released by the operator or the project itself , which we call smell, give people the impression that most of the Chinese teams are participating and operating, including Chinese investors, and have not yet fully spread overseas. , can involve more opinion leaders, including high-level influential large institutions, and project parties into the trend, so she thinks this is a point that she feels more concerned about at present, and she feels that it may still be a relatively It is her idea to talk about a partial narrative in the Chinese circle.
The other one is that $ORDI the current market value we just said it is now 300 million market value, but $ORDI it has been fully circulated, and then it is currently the top stream of meme, just like $ SHIB should be at present. I looked at it in the morning and it should have a market value of 5 billion, which is basically an order of magnitude difference. However, he believes that even if it seems to be an order of magnitude difference, there is still room for growth. Then he thinks that the birth of $SHIB is blessed by a lot of coincidences, including the blessing of good market conditions, to give birth to such a one-of-a-kind project, including $SHIB. Of course we know that the first one was born in a bull market, and the second one has a lot of The fantasy and bloody plot, plus a side blessing from Musk, because conditions like these are unpredictable, a $SHIB appeared. $ORDI is still in a bear market. If he wants to catch up with the market value of $SHIB, it is possible, but he thinks the odds are not particularly high. So far I have offered some negative opinions.
OK, so today we have actually talked about BRC20 and the newborn of the BTC ecology in a relatively comprehensive way. Of course, we didn’t talk too much about technical topics today, because our podcast is mainly for the general audience. We don’t talk about technical things, and we may talk more about business views and some thinking.
Then it needs to be reminded that everything we talked about today, including the host, is our staged opinion. These opinions may change, may be proved to be wrong, and may be proved by data There is a bias against the facts, so all of these require everyone to make personal judgments, and don't take it as a financial suggestion.
Then thank you two guests for sharing their thoughts with us patiently, sharing some data and facts, thank you both.
