Onchain: Bitcoin's luxury problems, Sui taking an L, and memecoin mania meets reality
Bitcoin's luxury problems
Recently, Bitcoin has run into a luxury problem: too much use. The Bitcoin network has seen its transactions and fees hit near all-time highs. And it wasn’t because Michael Saylor suddenly found a reason to move his Bitcoin.
Up until this year, there wasn’t a whole lot you could do with Bitcoin except for HODL. Ever since the Ordinals protocol went live, that has changed drastically. Thanks to Ordinals, users can attach data to Satoshis (the smallest unit of Bitcoin) in a process called inscription. While the first use case for inscriptions were NFTs, people quickly realized it’s quite expensive to add JPEGs on Bitcoin. The Bitcoin Apes spent $1.1 million to upload 1.46GB of monkey pictures to the chain.
Now the devs have done something and enabled the creation of tokens on Bitcoin with the BRC-20 standard. Good news for those who missed Pepe on Ethereum, the same now also exists on Bitcoin - much to the dismay of Bitcoin maxis who preferred when Bitcoin was just digital gold and not about frog coins.
Takeaway: Bitcoin, when used, has high fees, just like other blockchains ruining the low-cost payment network narrative. Transaction fees going up is good for network security but bad for users. A tale as old as crypto.
Sui Network takes an L
You would think that projects have realized by now that launching new layer-1 blockchains works as little as real-life adoptions of classic anime by Netflix. Nevertheless, Sui decided to launch its mainnet on May 3rd.
What makes Sui different, you might ask? It’s hard to tell, but their pitch mainly consists of being a layer-1 blockchain that is fast, scalable, and solves all the problems of previous Layer-1s (or something along those lines). It also has its own programming language called Move, and a huge pot of VC funding, having raised $300 million last year.
The native Sui token initially launched at a price of $2.16. Within minutes the price dropped to below $1.40. The price chart seems to tell just one story, and it’s a big L.
Takeaway: Bootstrapping an entire new Layer-1 ecosystem is hard. High throughput is worth little when genuine demand is lacking. In an environment where other teams are launching Layer-3s, yet another Proof-of-Stake chain by ex-Big Tech engineers ain’t all that interesting.
Memecoin mania meets reality
While Prince Charles in England received his crown to become the new King of Britain, the frog-themed Pepe memecoin crowned itself when hitting a 1 billion market capitalization last week.
However, things didn’t quite continue on this path. As with other memecoins, the biggest utility of Pepe is that it serves as a meme and gives people hope of attaining financial freedom without having to work for it.
Pepe investors holding on to their gains like.
Unfortunately, that often ends in tears, and Pepe is no exception. At the start of the week, Pepe traders lost $7.23 million on liquidations, with the value of the coin dropping more than 50% from its all-time high.
Takeaway: Memecoins are best viewed as Memes. They are part of crypto culture and won’t go away. Nevertheless, it’s worth noting that their supply is normally in the hands of a few whales who don’t hesitate to dump their bag on naive buyers. Much wow.
Fact of the week: The burden placed on King Charles to fill Queen Elizabeth’s footsteps isn’t the only thing that weighs heavy. The St. Edwards’ Crown that was placed on his head during the coronation weighs a solid 2.2kg. 👑 Still not as heavy as crypto investors' illiquid memecoin bags.
Naomi from CoinJar
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