The Bitcoin ecosystem has undergone a dramatic transformation in recent months. What once seemed like a stagnant landscape has suddenly ignited with activity—driven largely by the rise of Ordinals, BRC20 tokens, and a wave of new protocols building on Bitcoin’s foundational layers. The market, once quiet, is now buzzing with innovation, speculation, and renewed interest in Bitcoin as more than just digital gold.
But can this momentum last? And what are the key developments shaping the future of Bitcoin's expanding ecosystem?
Let’s dive into the core innovations driving this shift, explore their differences, and assess whether this is another short-lived meme cycle or the beginning of a sustainable evolution in Bitcoin’s utility.
The Rise of Ordinals and BRC20
Ordinals: NFTs on Bitcoin
In previous bull markets, NFTs were primarily built on Ethereum using standards like ERC-721. But some developers questioned whether NFTs could exist natively on Bitcoin—despite its lack of smart contract functionality.
Enter Ordinals, a protocol introduced in early 2023 by developer Casey Rodarmor. The idea was simple yet revolutionary: assign a unique ordinal number to each satoshi (the smallest unit of Bitcoin), effectively making individual sats trackable and identifiable. By inscribing data—such as images, text, or even videos—onto specific sats, users could create Bitcoin-native NFTs.
This breakthrough transformed Bitcoin from a pure value-transfer network into a platform capable of hosting digital collectibles. Since its launch, Ordinals have sparked massive adoption:
- Over 41 million inscriptions have been minted.
- More than $100 million in fees paid to miners.
- A surge in new marketplaces dedicated to buying and selling ordinal-based NFTs.
BRC20: Fungible Tokens on Bitcoin
While Ordinals enabled NFTs, the next logical step was creating fungible tokens—similar to Ethereum’s ERC-20 standard. That’s where BRC20 comes in.
Proposed by an anonymous developer known as “Domo,” BRC20 allows users to deploy and transfer interchangeable tokens directly on the Bitcoin blockchain using JSON data inscribed via Ordinals. Though initially criticized for technical limitations—like reliance on third-party indexers and complex transfer mechanics—it gained traction due to its simplicity and fairness in distribution.
The real catalyst? The listing of ORDI, the first major BRC20 token, on top-tier centralized exchanges. This event triggered a domino effect:
- Increased liquidity across BRC20 assets.
- Emergence of DeFi-like tools: token launchpads, aggregators, swap platforms.
- Shift from pure meme culture toward functional use cases.
Today, BRC20 is evolving beyond novelty—laying the groundwork for a full-fledged ecosystem on Bitcoin.
Beyond BRC20: Competing Protocols Emerge
Ethscriptions: Bringing Inscriptions to Ethereum
Inspired by Ordinals, Ethscriptions was introduced in June 2023 by Tom Lehman, co-founder of Genius. It aims to reduce NFT creation costs on Ethereum by storing asset data off-chain while referencing it on-chain—similar in concept to how Ordinals work.
Although Ethereum already has mature NFT infrastructure (ERC-721/ERC-1155), Ethscriptions found unexpected traction through its native token, ETHS. Minted in June 2023 with a total supply of 21,000, ETHS became a symbol of community-driven experimentation.
Despite skepticism—some called it a step backward for Ethereum—the protocol highlights growing demand for low-cost, accessible digital ownership models across blockchains.
Atomicals: A More Decentralized Alternative
Launched in September 2023, Atomicals offers a fundamentally different approach to token issuance on Bitcoin. Unlike BRC20, which relies on external indexing, Atomicals uses Bitcoin’s UTXO model directly—binding each token to a single satoshi’s UTXO.
Key advantages:
- True 1:1 token-to-satoshi mapping.
- Enhanced programmability via UTXO composition.
- Native support for NFTs, domains (Realms), and fungible tokens (ARC20).
The first ARC20 token, ATOM, was minted on September 21, 2023, with a total supply of 2.1 million tokens distributed across 21,000 units.
However, Atomicals faces challenges:
- Requires running a full Bitcoin node to mint.
- High technical barrier limits accessibility.
- Risk of accidental loss during transactions.
Still, many experts view Atomicals as more aligned with Bitcoin’s original decentralization ethos—making it a strong contender for long-term viability.
New Frontiers: Runes, Pipe, and Taproot Assets
Runes & Pipe: Efficiency Meets Fairness
Casey Rodarmor, creator of Ordinals, expressed concern about the "spam" caused by BRC20 tokens—calling 99% of inscriptions scams. In response, he proposed Runes, a UTXO-based protocol designed to streamline token creation and reduce network bloat.
Though Casey later paused Runes development to focus on improving Ordinals, others took up the mantle. Developer benny from Trac expanded the concept into Pipe, combining the best aspects of BRC20 and Runes.
Pipe advantages:
- Simpler user experience.
- Fair launch mechanics.
- Compatibility with the Lightning Network.
The first Pipe token launched on September 27, 2023, with a fixed supply of 21 million—mirroring Bitcoin’s scarcity model.
👉 See how next-gen protocols are redefining value transfer on blockchain networks.
Taproot Assets: Bridging Bitcoin and Lightning
Announced by Lightning Labs, Taproot Assets enables token issuance on Bitcoin by embedding metadata into transaction outputs under the Taproot upgrade. However, unlike BRC20, these tokens must be moved to the Lightning Network for transfers.
Key features:
- Tokens registered on Bitcoin but transacted off-chain.
- Centralized indexing required—users must trust third-party services or run their own nodes.
- Project teams control initial minting; no self-service option.
The first Taproot Asset, Trick & Treat, issued 420 million tokens—with nearly 20% airdropped via Nostr on the Lightning Network. As the first meme coin on this layer, it marks an important milestone.
RGB: Smart Contracts Without Changing Bitcoin
Proposed back in 2016 by security expert Peter Todd, RGB has re-emerged as a promising smart contract solution for Bitcoin. Rather than modifying Bitcoin’s base layer, RGB operates off-chain while using Bitcoin’s UTXO set for security anchoring.
How it works:
- Smart contract states are verified via cryptographic proofs stored in UTXOs.
- Data is managed by dedicated RGB nodes.
- Contracts are isolated—no shared global state (unlike Ethereum).
RGB supports complex applications like asset issuance, DeFi primitives, and confidential transactions. Backed by Tether for potential USDt issuance on Bitcoin, RGB could become a cornerstone of Bitcoin’s future scalability.
Frequently Asked Questions (FAQ)
Q: Are BRC20 tokens secure?
A: BRC20 relies on external indexers to interpret inscriptions, which introduces centralization risks. While transactions occur on Bitcoin, there’s no native consensus validation for token balances—making proper custody crucial.
Q: How does Ordinals affect Bitcoin’s network performance?
A: High inscription activity increases block congestion and transaction fees. Some critics argue this undermines Bitcoin’s primary role as a settlement layer—but proponents see it as organic demand driving miner revenue.
Q: Can I store BRC20 or Ordinal NFTs in any wallet?
A: No. You need wallets that support Ordinals (e.g., Xverse, Leather, Hiro). Standard Bitcoin wallets may not recognize inscribed sats, risking loss of assets.
Q: Is there a gas fee for transferring BRC20 tokens?
A: Yes. Each transfer requires a Bitcoin transaction fee since it involves moving UTXOs containing the token data.
Q: Why are so many new protocols emerging now?
A: The success of Ordinals unlocked creative possibilities on Bitcoin. Developers are racing to build better alternatives—focusing on efficiency, decentralization, and usability.
Q: Which protocol has the most long-term potential?
A: While BRC20 leads in adoption today, protocols like Atomicals and RGB offer stronger technical foundations. Ultimately, integration with the Lightning Network and improved UX will determine winners.
Final Thoughts: A New Chapter for Bitcoin
From Ordinals to BRC20, and from Atomicals to RGB, we’re witnessing a renaissance in Bitcoin’s utility. These innovations aren’t just memes—they’re experiments pushing the boundaries of what’s possible on the world’s most secure blockchain.
While early stages often bring hype and speculation, they also lay the foundation for real infrastructure. Just as DeFi transformed Ethereum in 2020–2021, we may be seeing the early signs of a Bitcoin-powered application layer emerge.
Whether you’re bullish on ORDI or intrigued by Pipe’s efficiency, one thing is clear:
👉 Stay ahead of the curve—explore how emerging protocols are unlocking new dimensions in digital finance.
Bitcoin isn’t just surviving—it’s evolving. And this time, the ecosystem might just have staying power.