The new era of Bitcoin: Profits, progress and potential in the inscription-driven crypto industry

Hui Gong and Han Wang
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Hui Gong: UCL Institute of Finance & Technology, UK
Han Wang: East Money Information Co., Ltd, China

Journal of Digital Banking, 2024, vol. 9, issue 2, 150-171

Abstract: The introduction of the Ordinals Protocol and BRC-20 tokens, featuring the pioneering concept of Inscriptions, signifies a pivotal evolution in the Bitcoin network. Officially launched on 21st January, 2023, this innovation embeds a unique blend of tokenisation and non-fungible attributes directly into Bitcoin’s base layer, akin to engraving precious metals. This paper thoroughly examines the technical underpinnings and market implications of BRC-20 tokens, focusing on the stark contrasts with traditional ERC-20 tokens and initial coin offerings. Unlike ERC-20, Inscriptions integrate seamlessly into Bitcoin’s existing structure, offering a decentralised model that strengthens the principles of a true fair launch in decentralised finance. The study critically assesses the reception within the Bitcoin community, balancing the potential enhancements in Blockchain functionality against concerns regarding foundational principles. Furthermore, it explores the profound implications for stakeholders such as miners, exchanges and developers and evaluates the transformative impact on the cryptocurrency ecosystem at large. Ultimately, this paper elucidates the role of Inscriptions in redefining the trajectory of Bitcoin and shaping the future landscape of Blockchain technologies, emphasising their potential to foster equity and innovation in token distribution.

Keywords: Bitcoin; BRC-20; decentralised finance; fair launch; Inscriptions; Ordinals (search for similar items in EconPapers)
JEL-codes: E5 G2 (search for similar items in EconPapers)
Date: 2024
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