Yuga Lab’s embrace of Bitcoin NFTs is a big deal
It couldn’t be a more interesting time in Bitcoin.
Yuga Labs, the $4 billion company behind the Bored Ape Yacht Club non-fungible token (NFT) series, generated $16.5 million from its first NFT auction using the Ordinals protocol on Bitcoin. These 288 NFTs, part of a collection called TwelveFold, sent shockwaves through the crypto community on Tuesday.
The company announced its plans to launch the project last week, a move that should not be underestimated. Yuga Labs is a juggernaut in the NFT space – it developed three of the current top 10 most valuable NFT collections and owns the intellectual property for more – and so far has not created any NFTs on any blockchain other than Ethereum, where the majority of digital collectibles currently exist – meaning one of the biggest companies in crypto is betting big on Bitcoin.
Aubrey Strobel is host of The Aubservation podcast and former head of communications at Lolli.
Interestingly, Bitcoin has been trending upwards during this crypto downturn. This week there has been talk of distributing ZK [zero-knowledge] rollups on Bitcoin, the Ordinals project has kept its momentum and a busy decentralized social media protocol called Nostr, which uses Bitcoin Lightning payments, is gaining users.
Where did all this begin? For many years, people viewed the world’s number one digital currency as a pet rock. This is not a dig against Bitcoin, it is a result of its careful design and management. Bitcoin is meant to be good money – and it does a fantastic job of it. But at the same time, people and companies have been asking, can Bitcoin be bigger?
Although NFTs began on Bitcoin via counterparties, they were not popular during the recent bull market because Bitcoin is not smart-contract friendly. Building on the network requires a bit more work than building on networks designed to run decentralized applications. The Ordinals project took advantage of a Bitcoin upgrade from 2021, called Taproot, and makes it possible to write digital artifacts onto the blockchain itself.
So-called bitcoin NFTs are notably different and potentially better than NFTs on Ethereum, which often require data to be stored on remote servers such as IPFS. An Ethereum NFT is an immutable token, which links back to potentially mutable data. Ordinals make storing NFTs more secure, because settlements stay on Bitcoin’s chain forever. It is possible that many other popular NFT series may follow Yuga’s footsteps and distribute projects on Bitcoin.
Actually Ordinals creator Casey Rodamor created a “burning address” which makes it possible to destroy an NFT series on Ethereum while entering and redistributing it on Bitcoin. It remains to be seen whether people and capital will ditch networks like Ethereum and Solana for Bitcoin entirely, but it is impossible to deny that this is a new day for Bitcoin. Instead of just being held, more and more bitcoins will be put to use.
Yuga’s embrace of the Ordinals is just a catalyst for embers that were already burning. Last year, for example, Trust Machines, a startup that wants to build the bitcoin ecosystem, raised $150 million last year to build bitcoin products. Counterparty, Liquid, Stacks, RSK, Lightning and others have been around for years building audio infrastructure that people can spend their audio money on.
Of course, many of these projects have been met with varying amounts of skepticism – a trend encapsulated by the love it/hate it response to Ordinals. In one camp, many believe that Bitcoin should not be a test bed for development or a home for rogue projects. In the second is that Ordinals, Nostr and other projects are the next ramp for Bitcoin adoption.
Now, the online Bitcoin community is on a metaphorical path, because Ordinals aren’t going away anytime soon. People want to build on Bitcoin, and because it’s open source they can. This brings us to perhaps the most important element here, the proof of chain. One statistic you can’t deny is that the Ordinals project tipped the number of non-zero Bitcoin addresses to a new all-time high of 44 million, according to Glassnode.
Time will tell about the future of Bitcoin. Yuga’s embrace of Bitcoin should be a signal that the future is bright and there is still much to explore in this exciting and dynamic industry.
