In just over a month, the Ordinals protocol will celebrate its 2nd anniversary on the Bitcoin mainnet. In 2023, the Bitcoin ecosystem went from being ignored to an inscription frenzy. And this year, with the historic fourth Bitcoin halving, the Bitcoin ecosystem has undergone many changes, such as runes, the development of new meme communities, and discussions on OP_CAT.
In May of this year, Bitcoin Asia, Ordinals Asia and various Bitcoin-related side events were held in full swing in Hong Kong. At that time, everyone was full of expectations for the Bitcoin ecosystem in the second half of the year, especially Bitcoin Layer 2 and Runes. In a blink of an eye, we have come to the end of 2024. With the election of Trump, Bitcoin has been advancing all the way, and we have finally seen Bitcoin with a six-digit US dollar price.
However, compared with the fierce rise of Bitcoin, the performance of the Bitcoin ecosystem seems sluggish.
Rune, the most influential token protocol in the Bitcoin ecosystem, still has a total market value of less than $2 billion. Since Trump was elected, Runes total market value briefly exceeded the $2 billion mark. However, the Rune ecosystem failed to maintain the approximately 1-fold increase in total market value that broke through the $2 billion mark. Currently, Rune is challenging the $2 billion mark for the second time, with a total market value of approximately $1.92 billion.
Yes, judging from the data alone, pulling a top-level meme coin from Solana can kill Rune in terms of market value...
Another familiar old friend, BRC-20, is still better than Runecoin in terms of total market value, with nearly $3.6 billion. Although it still wins in terms of data, BRC-20 also faces some problems. For example, in this market value composition, $ORDI and $SATS listed on Binance already account for almost half, and the remaining long-tail assets are more. Some active Western communities, mainly $PUPS and $WZRD, have already or are about to turn to the Runecoin ecosystem.
BlockBeats invited three in-depth Bitcoin ecosystem players to review the performance of the Bitcoin ecosystem over the past year. Will they be more optimistic or pessimistic about the future? Has the development logic of the Bitcoin ecosystem quietly changed in their eyes? How will they interpret some unique phenomena in the Bitcoin ecosystem?
Interviewed guests:
Dr. Jingle ( @ordjingle ): Ordinals protocol contributor
Ivan ( @ivantkf ): Former head of community operations for Magic Eden Bitcoin Ecosystem in Asia Pacific, author of BRC-1155 protocol
A senior dev who chose to remain anonymous is one of the deep contributors to the BRC-20 protocol
Bitcoin has broken through the $100,000 mark, why is the Bitcoin ecosystem still lukewarm?
Looking back at the past year, Bitcoin can be said to be leading the Crypto market, and with Trumps election, it has been soaring, breaking through the $100,000 mark, once again creating cryptocurrency history.
However, the continuous rise of Bitcoin does not seem to have brought much boost to the Bitcoin ecosystem. CEX is not interested in listing Rune Tokens, especially Binance has not listed any Rune Token contracts or even spot. Among the Bitcoin Layer 2 projects that have attracted attention in the middle of this year, except for Fractal and Merlin, there seems to be no other impressive projects.
At present, the total market value of Rune is not even as good as a top Solana meme coin. In terms of NFT, among the top 10 Bitcoin NFT projects by market value, only Bitcoin Puppets ranks 10th and Node Monkes ranks 11th. ETH NFT still has a higher status and voice in the NFT market.
Why is the Bitcoin ecosystem not driven by the rise of Bitcoin?
Dr. Jin Gou: In fact, the narrative of Bitcoin ecology is still valid, such as the significance of Bitcoin itself as a value medium, the significance of data fully on-chain, etc. However, the excitement brought by the simple narrative of issuing coins on Bitcoin may have been almost exhausted. Both Rune and BRC-20 have entered a stage of community building that requires a relatively long period of sedimentation.
Judging from the situation of VC investment, the top Crypto VCs are not completely absent from Bitcoin ecosystem-related investments, but they have not yet participated in a particularly deep way, and are more like non-mainstream investments. If they have not shown any interest in betting on the Bitcoin ecosystem, then the opportunities for the Bitcoin ecosystem in the short term may still be relatively limited.
For Tier 1 CEXs, the possible reason for not listing Rune Tokens is very simple, that is, the trading of Rune Tokens is not yet widespread and active enough to meet the CEX listing standards. If listing Rune Tokens can neither increase traffic nor bring in considerable handling fee income, CEXs will lack the motivation to list Rune Tokens.
However, the Bitcoin ecosystem is not completely unaffected by the rise of Bitcoin. Whether it is Runes, BRC-20 or Bitcoin NFT, they have actually gained a relatively obvious correlation increase with the rise of Bitcoin. This increase is not large but exists, which shows that the Bitcoin ecosystem is actually still recognized by the market, but it is still a niche track and has not yet been favored by widespread or larger funds.
Ivan: For assets that are not listed and need to be purchased with Bitcoin on the chain, in this market environment where Bitcoin has risen significantly, if Bitcoin is exchanged for Runes or other Bitcoin ecological assets, it may not be able to outperform the growth of Bitcoin itself, and once Bitcoin falls, it will suffer a double kill.
If it was a story like last years BRC-20 that made the whole market crazy, this worry would not exist, and the price of Bitcoin was cheap at that time. But now, such a story is on Solana instead of Bitcoin, and Bitcoin has reached a price of $100,000 per coin. People are willing to spend precious Bitcoin to buy any altcoin based on the fact that it can get better returns than Bitcoin, but it is not cost-effective to use Bitcoin to exchange other assets on the Bitcoin mainnet now.
This round of bull market is mainly driven by ETFs, which allow traditional institutional funds to find a stable channel to connect with Bitcoin. Everyone knows that there is a lot of money in Bitcoin, and through the overflow of funds, market funds can be dispersed to promote the development of Bitcoins on-chain ecology. On the contrary, Solana is because of the thriving meme ecology on the chain, and the multiple stories of getting rich quickly can attract new and old retail investors to exchange funds to buy SOL, driving up the price of the currency and the continuous development of the chain. Therefore, for the Bitcoin ecosystem to explode, it still lacks a narrative that can be truly implemented and create the next $ORDI myth of getting rich quickly, so as to re-attract the currency circle funds from other chains to flow back to the Bitcoin ecosystem.
dev: Solana is very popular now. Not only players in the Bitcoin ecosystem, but also players in any other ecosystem will feel disappointed, except those who make money on Solana.
However, during the bear market last year, the Bitcoin ecosystem had already experienced a thorough explosion. After such a big explosion, it takes time to adjust and settle, waiting for new events to occur and attract more incremental players.
But now such an event has not yet arrived. Although Runes were launched this year, it is still basically the audience that the original Ordinals have already covered, and there are no more points to attract other ecological players to enter. In the absence of a breakthrough in the narrative, the immaturity of the ecological infrastructure has further restricted the entry of liquidity. Whether it is BRC-20 or Runes, the trading experience is no different from NFT without being listed, which will make the big funds that want to come in worry about whether there will be exit problems.
Against the backdrop of the United States embracing Bitcoin, have the fundamentals of the Bitcoin ecosystem changed?
Before Bitcoin hit new highs this year and Trumps election gave the market the expectation that the United States would fully embrace Bitcoin, the miner income theory has always been one of the views that are optimistic about the long-term development of the Bitcoin ecosystem. But now, the boost of the American embrace narrative to the entire Crypto market seems to have formed a dimensionality reduction attack on the in-circle narrative innovation. The voices that used to entangle the useless innovation of the currency circle have almost disappeared in the lively rise.
For the Bitcoin ecosystem, a “strong narrative track” where many values are built on the five words “Bitcoin mainnet”, has the quiet shift in the market’s biggest narrative also had a certain impact on it?
Dr. Jin Gou: If Bitcoin really becomes a strategic reserve for the United States, or even an asset for strategic reserves for various countries, then I may tend to think that it is best to do nothing, and the security of Bitcoin must be put first. From this possibility, any potential impact on the security of Bitcoin is a hidden danger to the greatest interests of Bitcoin. The fact that sovereign countries can use Bitcoin as a strategic reserve is the biggest boost to Bitcoin.
Previous views, such as increasing the income of miners, will naturally be placed behind maintaining network security in the current context of being officially recruited. If Bitcoin can be given a higher legal status by the officials of more sovereign countries, nothing can be more popular than this.
From this perspective, the probability of OP_CAT being revived on the mainnet in this bull market is very small. Before the price of Bitcoin went up, everyone might have felt an urgency to innovate to make the network active, but now that it is getting better, the need to take the risk of trial and error to open up this uncertainty has been greatly reduced in the short term. But OP_CATs attempts on Fractal, such as CAT 20, are very good and meaningful.
Ivan: For miners, the rise in Bitcoin prices brought about by the United States embrace of encryption has certainly made the fees brought by the Bitcoin ecosystem seem less lucrative in comparison. Of course, it would be great if there were any, but even if there werent, the price of Bitcoin has risen more than five times from its lowest point.
In addition, the funds from the ETF cannot flow into the Bitcoin ecosystem. The combination of the two makes the current Bitcoin ecosystem not much different from other chains. It is a place for experienced degens to engage in PvP. This is why everyone is eager for Binance to list runes, believing that if this happens, it will be like a spark that detonates the entire ecosystem.
Dev: I actually always think that miners don’t really care about Ordinals and Bitcoin ecosystem. Most of the miners I’ve met are more realistic. They just calculate the cost of mining, the various costs involved, and the price of Bitcoin to sell in order to make a profit.
They dont consider fundamental issues like whether Bitcoin prioritizes security or innovation. They are just mining faithfully, which is normal. Web2 miners who mine gold, silver, copper and iron ore dont consider the sustainable development of the mining area. This is real life.
Bitcoin Core, ecosystem developers, and players will be more interested in this issue than miners.
If we look beyond the Bitcoin ecosystem and at the entire market, we are now in a bull market. Sooner or later, the Bitcoin ecosystem will rise with the bull market, and liquidity will always spill over to this track, because in the past bull markets, no track with a relatively low position and a reliable narrative would be missed by later speculators. So from my point of view, the fundamentals of the Bitcoin ecosystem have not changed much, and there will be opportunities, but I don’t know at what stage of the bull market this opportunity will come.
Is BRC-20 dead?
Although BRC-20 is still more than double the total market value of Runecoin, players who are deeply involved in the Bitcoin ecosystem can directly feel that the ecological activity of BRC-20 is gradually being left behind by the Runecoin ecosystem. Some active Western communities, mainly $PUPS and $WZRD, have already or are about to turn to the Runecoin ecosystem.
Despite this, BRC-20 is still the only Bitcoin asset protocol with 2 Binance spot listings. In comparison, Runes is still 0, which is still a huge advantage of BRC-20 over Runes at this stage.
In the past half month, the concept of ground promotion led by on BRC-20 has made BRC-20 regain some attention. Is this a good thing or a bad thing? Is BRC-20 declining?
Dr. Jin Gou: BRC-20 is indeed not as popular as last year, but I don’t think it has “fallen off the radar.” After all, BRC-20 is the first Bitcoin FT protocol born after the Ordinals protocol came out, and its historical status is there.
As a Bitcoin FT protocol, the update of the BRC-20 protocol itself and the promotion of related infrastructure have actually been ongoing. However, compared with the initial emergence of BRC-20, which attracted the entire markets attention to the issuance of coins on Bitcoin, these actions seem to be very small innovations.
The concept of ground promotion is actually quite interesting. If we dont prejudge coins like BTC and FIFA as ground promotion, and only look at it from the perspective of the issuance and development of an asset, it may be a meme targeting an audience that we are not familiar with.
For example, we often joked before that Runecoin and BRC-20 are Chinese and foreign countries do not accept each other. If we look at the popular meme communities on Runecoin, such as $PUPS and $BDC, to some extent, it can also be said that they are spontaneous ground promotion by young foreign groups. For each coin, how to get more and more people to accept this coin is a problem. If there is a breakthrough in this issue, then the so-called ground promotion is not that bad from the perspective of the Crypto market.
Ivan: Although BRC-20 is not very popular now, it is not declining. The market value and trading volume of the entire BRC-20 ecosystem are actually not weak, and Chinese investors are familiar with BRC-20 tokens such as $ORDI, $SATS, and $PIZZA. Its just that the markets hot spots are concentrated on Solana at this stage, and funds always gather in lively places, so BRC-20 and Rune may be waiting for the next breakthrough opportunity.
The main reason for the migration of tokens like $PUPS and $WZRD to Runecoin may be that their target audiences are mainly in the West, so migrating to the Runecoin ecosystem, which is more influential in the West, may be able to better expand the community size of the coin itself. In addition, another reason may be that Binance has not yet listed any Runecoin tokens. If a Runecoin strives to be listed in the future, the breakthrough it can achieve may be greater.
dev: Now Ordianls are dead is basically a meme, but last year it was actually a bit self-deprecating and unconfident. At that time, I was even less optimistic and joked about death. The current situation of BRC-20 is far less bad than it was then. I dont think BRC-20 is declining.
In fact, I regard Rune and BRC-20 as a whole sector. If liquidity spills over to the Bitcoin ecosystem, it will be like last year when Rune was popular, and all BRC-XXX will soar. People don’t even worry about whether a new thing is real innovation or fake innovation. What they are afraid of is that they have not got on board. It has nothing to do with the fundamentals of the project, but which one is cheaper and has the possibility of rebounding, and which one is a new project that can get free chips and print money.
From the users perspective, the ecological infrastructure of BRC-20 is still iterating. It is impossible to predict when and when BRC-20 will take off next time. What is more important is that when the wind blows, the ecological infrastructure at that time will be able to accept greater liquidity.
Why is the no mutual acceptance between China and foreign countries so obvious in the Bitcoin ecosystem, but there is no such barrier on Solana or other chains?
On Solana, although there are many meme coins whose angles are not easy for the Chinese community to understand at first, they will basically be covered by relevant popular science information soon, and there are no obvious targets that only have Chinese or English audiences. But in the Bitcoin ecosystem, it is very obvious that Chinese players are generally not interested in runes, and English players rarely participated when BRC-20 was in full swing last year.
Why does this phenomenon occur?
Dr. Jin Gou: First of all, there are indeed differences in cultural understanding. This interesting phenomenon also reminds me of an interview between Jack Ma and Elon Musk. Jack Mas English is already very good. In the interview, he said something like 99.9% of tools are not smarter than humans. This is an exaggerated and somewhat joking statement. But Musk really thought this was a data expression and used this data to make a joke. As a result, Jack Ma didnt get Musks point.
In the Bitcoin ecosystem, Casey often makes English compound words. They think it’s a good thing after they make it, ha ha ha, but we who didn’t grow up in an English environment can’t feel the funny point. This is also common in various memes put into runes.
From a technical perspective, Rune is indeed more innovative than BRC-20, and some foreigners like this. However, a token protocol is still closely related to making money. Foreigners did miss the BRC-20 wave, and Rune happens to resonate with their culture. This phenomenon is caused by many factors.
Ivan: Foreigners actually participated in the early days of Ordinals, but they mostly traded small pictures OTC in Discord, while we traded BRC-20 OTC on WeChat. From the beginning, there were differences in the direction or focus of participation between China and foreign countries.
Last year, when OKXs mobile BRC-20 trading experience was already very smooth, many foreigners actually didnt know about it. As the direct driving force of the BRC-20 ecosystem, the Chinese community is not only enthusiastic about it, but also has done a lot of infrastructure. Then everyone will definitely think that our system has run smoothly, the stability has been tested, and there have been no major security issues such as double spending, so we can just play with it with peace of mind.
dev: The hardcore foreign players in the Ordinals circle were mainly playing NFT at the time. In fact, when BRC-20 first came out, they were not very optimistic about it. They thought that this thing was just writing a JSON text on an inscription. If you want to transfer money, you have to engrave another inscription, which is a lot of effort.
These people support Casey. At first, Casey didnt like this thing either, thinking that Ordinals should be used as art. I didnt expect that the Chinese community was so powerful that they directly made a fuss about BRC-20. I had a direct communication with Domo at that time, and he said that the builders who took the initiative to communicate with him were basically from the Chinese community.
The popularity of BRC-20 must have shocked foreigners, so after Rune was launched, the Western community also took the initiative to participate. They will not be biased against issuing coins on Bitcoin, but they are definitely not interested in taking over old assets. The principle of investing in new assets instead of old assets is the same in China and abroad.
Chinese people are the backbone of the BRC-20 ecosystem. We promoted $ORDI, and the builders of the BRC-20 ecosystem, such as UniSat and OKX, are also of Chinese background. For Chinese people, after Rune came out, we, who originally had actual holdings in BRC-20, felt that Rune was here to divert traffic - we have built so much in BRC-20, and the entire protocol is running quite stably, so why cant it be done just because foreigners say its not allowed?
How would you rate the development of the Bitcoin ecosystem this year?
In 2023 and 2024, Bitcoin activities in Hong Kong have evolved from spontaneous exchanges among a small number of people to a week-long Bitcoin Week. There must be a lot more people who understand and are optimistic about the Bitcoin ecosystem. However, the Bitcoin ecosystem that players expect is an ecosystem that can compete with Solana and Ethereum. At present, there seems to be no hope of catching up in the short term. 2024 is about to pass. How can you rate the development of the Bitcoin ecosystem?
Dr. Golden Dog: 70 points, not worse than expected, not better than expected. The value points of Bitcoin ecology that people are optimistic about in the long term have not changed, and more and more people know about Bitcoin ecology. Although there is no shocking wealth myth like $ORDI last year in 2024, the roots of this ecology have been solidified and small seedlings have grown.
I think this is a good thing. Too fast development may also lead to too fast death. As a new narrative that has just grown up in this cycle, the Bitcoin ecosystem still has a long way to go and must move forward steadily.
Ivan: 60 points, mainly because the expectations for last year were relatively high, such as the famous dream pie chart comparing BRC-20 and ERC-20 last year.
Originally, everyone thought that the Bitcoin ecosystem would accelerate the path taken by the Ethereum ecosystem. For example, various types of projects such as stablecoins and Layer 2 would achieve breakthroughs, but now it seems that the development results are not as expected.
But this year is only the second year of the Bitcoin ecosystem. Maybe next year the scale of activities in Hong Kong and around the world will be even larger. The Bitcoin ecosystem will continue to develop, and more and more people will join in. It is too early to draw a conclusion now. NFT is a good example. It was born in 2017, but it became popular in 2021. The Bitcoin ecosystem is still in its early stages.
dev: I won’t give a score, I’m more pessimistic.
I hope to see something like the resurrection of OP_CAT, so that Bitcoin can really do Turing-complete smart contracts, and then do a lot of development based on it, so that the Bitcoin ecosystem can really develop. In fact, this is still a consensus issue. If the consensus is incomplete, the concept of Bitcoin ecology may be a false demand, and everyone can only use evil ways to do things on Bitcoin.
Despite this, I believe that in this bull market, liquidity will definitely spill over to the Bitcoin ecosystem, and we will have something to play with in this bull market. But in the long run, I am not optimistic that the Bitcoin ecosystem can truly develop without changes to the Bitcoin mainnet.
