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A new solution, BRC-721E standard

BRC-721(1) is a newly released token standard which brings Bitcoin and Ethereum even closer. It builds an important bridge from one to another, allowing users to transfer their NFTs to the Bitcoin network. The new standard has been launched by Ordinals market (a Bitcoin ordinals-based marketplace) in collaboration with Bitcoin Miladys collection. Ordinals provide the mechanism to transfer ERC-721 NFTs to the Bitcoin blockchain. It has become a message of the day of launch and its popularity sprang high in the following days. According to Dune Analytics, the number of unique inscriptions reached 10M, owing to Ethereum â€“ Bitcoin burning inscriptions.

The creators claim that turning Ethereum NFTs into Bitcoin Ordinals is to become immutable. ERC-721 Ethereum NFT will transform into BRC-721 Bitcoin NFT, which has been rather challenging before. The mechanism took time and effort to create, but now transferring assets from Ethereum to Bitcoin is much easier.

The process

An ERC-721 is sent to the burn address by means of the protocol and then the valid BRC-721 data is inscribed on the Bitcoin network. After the bridging this NFT and its corresponding metadata appears on the ordinals.market. To ensure that the token has a unique one-of-the-kind valid inscription and the address matches the call data of the transaction, certain indexes help with checking burnt token data inscriptions. Double-counting across different blockchains is impossible. According to the developers, an ETH call function is used in the process of burning. In addition, the size of the Ethereum NFTs content may be rather small (100 bytes only), but it will be turned into an ordinal anyway.

The impact, benefits and challenges

What effect will BRC-721E produce on the Bitcoin network and community, apart from attracting high interest (as the Bitcoin NFT amount has grown significantly since its introduction)? The trade volume has increased, which led to transaction fees and confirmation time rising. Due to the fact that the metadata of Ordinals inscriptions is not financial data it occupied more block space.

Although BRC-721 has a number of benefits, there are some issues with the invention, which have not been solved yet. The bridge is one-way, so NFTs once transferred from Ethereum to Bitcoin can not be â€˜reversedâ€™. Then, the metadata which passes from Ethereum to Bitcoin is going to be stored off-chain and the protocol offers an NFT image to be presented on-chain, but of lower quality. The daily amount has fallen since May, which may mean market stabilization. Also the protocol creator Casey Rodarmour is said to have left the team leading position.(2)

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