BRC20 vs. Taproot Assets: Who's Hype? Who's innovating?

Original author: Haotian (twitter: @tmel0211)

Ordinals assets, easy to distribute, but difficult to grab, Taproot Assets assets do not need to be grabbed, but difficult to distribute. There is very little talk of BRC20. Why? Because it is clear that Brc20 is essentially in the category of market speculation, and there is no technical component to speak of. If you think I’m biased against Brc20, I think it’s your lack of reverence for Bitcoin’s UTXO technology.

I understand that there is a shilling behavior in the market, but it doesn’t have to be based on the premise of obfuscation.

What do you think of the multi-asset narrative of Taproot Assets and Ordinals? To put it simply: Ordinals assets are easy to distribute, but difficult to grab, and Taproot Assets assets are not grabbed, but difficult to distribute.

Ordinals BRC20

Ordinals is a third-party data index, and the depoly, mint, transfer and other behaviors of the token are all realized by users publishing specific data fields to the chain, and Ordinals can only explain the “legitimacy” based on the retrieved decentralized data.

The benefits are:

1. It naturally has the characteristics of fair launch, and users can directly send transaction notes to the chain with specific parameters to participate in asset circulation;

2. Easy Fomo speculation, there is information and cognition so poor that some people can make a lot of money with the help of market sentiment;

3. In line with the interests of miners, the overall miner fee will be raised under the Fomo sentiment.

The disadvantages are:**

1. Fair launch is just a change of concept, and there are really growing assets, and it is difficult for you to participate in the early mint or low-price absorption process;

2. Fomo: Most small white retail investors may lose a large amount of assets, but mint less than assets;

3. Easy market manipulation, dark banks can depoly a token at any time, and then rely on pulling to get traffic and supporters.

If you don’t have to talk about technical logic, you will find a bunch of bugs, such as: when depositing and withdrawing Brc20 assets to the exchange, it is easy to have errors in the reconciliation of the Ordinals index ledger and the exchange platform ledger, which can easily lead to fake deposit attacks; Another example: it is technically possible to monitor Mempool data in real time to thwart the deployment behavior of Brc20 and interfere with the fairness of token issuance; Or there may be errors in the accounting logic between the Ordinals index and some proxy service platforms, resulting in the disruption of the order of asset circulation.

All in all, due to the “delay” effect of on-chain block confirmation, Ordinals-related tokens cannot have a clear state cut like Ethereum smart contract tokens, and can only manage assets through multiple platform bookkeeping and reconciliation.

I don’t have any bias against BRC20, it’s just that it doesn’t fall under the category of technical logic, and it would be right to understand it based on the realm of market speculation. Use the so-called technical advantages to shilling a thing of pure market logic, and you can see the leek green above your head from thousands of meters away.

Taproot Assets

Taproot Assets is based on Bitcoin multi-signature and hash timelock for asset issuance, and uses the trust channel of the Lightning Network to distribute and circulate assets in large quantities, and the whole process is provided by the Bitcoin mainnet for asset settlement, and the Lightning Network, as a trusted off-chain link that has been developed for many years, also has a strong consensus support, which is equivalent to a Bitcoin scaling solution like layer2.

Although the technical aspect is more Make sense, and the distribution of tokens based on Lightning Network wallets and relay nodes can form consumption and bring long-term application value to Bitcoin. However, the issuance model of Taproot Assets is similar to that of ICO, which is easy to issue coins and difficult to follow-up operation and distribution, which requires the project party to have strong comprehensive strengths in technology, operation, and market.

1. Assets can only be circulated if the initialization channel is established in advance;

2. The channel capacity is limited, and the capacity of each channel is limited, so the channel scale must be increased to expand the scale;

3. The distribution efficiency is limited, and there are also throughput limitations for the transfer of assets in the channel, and users are not used to using the Lightning Network for asset interaction.

This makes it difficult for Taproot Assets to have a short-term Fomo effect.

Many people don’t know that more than 40,000 assets have been released on Taproot Assets, including tokens and NFTs. However, this kind of token is not issued with a first-mover advantage, anyone can issue SATS, but choose whose narrative to believe, whose car to choose, and the ability to continue to operate and grow. It’s obviously more like a new Bitcoin ICO era that is on the move, and the question is what kind of story to tell?

Fortunately, the narrative of Taproot Assets has just begun, and it has not yet been deviated from the rhythm, and it is still optimistic about its main circulation track as a “stablecoin”, activating a new wave of Bitcoin application narrative. It can benchmark Ethereum’s coin issuance to DEX and CEX token distribution and circulation full-level proxy distribution mechanism. Let’s take a look at the evolution of Taproot Assets.

In general, if you speculate in the short term, it may be more fragrant to go to the BRC20, but you have to be wary of people who tell you about long-term value on the speculative road, long-term value discovery, you must not miss Taproot Assets, but don’t expect too much in the short term, otherwise it will also be used by speculators.

Smart officials can understand this logic, go their own way, and stop dissing and confusing each other.

Let “them” see clearly before making a choice.