While everyone’s talking about the Bitcoin halving and ETFs, there’s a serious issue brewing that could slow down Bitcoin’s growth: the explosion of token standards.
Fragmented Token Standards
A recent analysis pointed out the increasing number of different standards for issuing tokens on Bitcoin. BRC-20, Inscriptions, and the upcoming Runes are all competing for dominance.
The Problem
Token standards are supposed to ensure compatibility and make it easier for developers to create new tokens and applications. But the lack of rules for creating new standards is causing problems.
Impact on User Experience
The analyst predicts that the proliferation of token standards will make it harder for users to interact with Bitcoin. Wallets, exchanges, and other services will have to support multiple standards, which could lead to confusion and poor user experience.
Is Diversity a Strength?
Some argue that multiple token standards are a sign of strength, similar to Ethereum’s ERC-20 and ERC-721 standards. They believe that network effects will eventually favor the most popular standard.
The Future
It remains to be seen how this situation will play out. The widespread adoption of Inscriptions in 2023 has already impacted user experience, and the introduction of Runes could further complicate things.
