A new NFT collection by Peter Schiff
Bitcoin Ordinals may be the key to revealing hidden Bitcoin values
Introduced in January 2023, Bitcoin Ordinals are a method of generating Bitcoin NFTs by tying information to individual satoshis. They allow the use of block space on each Bitcoin satoshi to be an identifiable inscription of metadata, which can provide additional context or record as an output. The output leads to the creation of a digital artifact, which is like NFTs.
Until recently, NFTs have primarily been minted and used on blockchains such as Ethereum, Solana and BNB Chain. This changed when the team behind Ordinals recognized that non-fungible tokens could also have a place on the Bitcoin blockchain. Since launch, over 200,000 mainstream NFTs have been minted by a growing community of users, developers and enthusiasts excited about the potential of native Bitcoin NFTs.
A maximum amount of data of 3.9 MB can be added to a given Satoshi transaction, and much of this data is currently used for digital art files. The introduction of Ordinals gives the Bitcoin blockchain a new lease on life, as creators can now serve a purpose on the network.
Stacks, formerly Blockstack, is an open source platform to enable smart contracts, DeFi, NFTs and apps for Bitcoin. Stack’s blockchain is a “layer” for Bitcoin similar to the Lightning Network. In addition to smart contracts, the Stacks project provides open source software for authentication and data storage.
Concerns about internet privacy, security and data breaches drew attention to the Stacks project. Software developers have used the Stacks software to build decentralized alternatives to popular services. The Stacks (STX) token is the native cryptocurrency of the Stacks blockchain, which is used as a gas fee to execute smart contracts and process transactions.
According to one point of view, Ordinals may be the key to revealing hidden Bitcoin values. Nevertheless, from another point of view, Ordinals can significantly detract from Bitcoin’s primary goal of evolving into a new type of digital currency. At worst, Ordinals could deter institutional investors from investing in Bitcoin and attract unwanted regulatory inspection. In other words, there could be money to be made here, which would encourage more business people and inventors to grow the market for Bitcoin NFTs. Some estimates place the current year’s value of the NFT market at close to $20 billion, with Ethereum now accounting for the lion’s share of that sum.
Compared to other markets where Bitcoin has an impact, the current size of the NFT market is small. The worldwide money transfer business, where Bitcoin is becoming more and more significant, is still one-sixth the size of the NFT market, even if you look at things optimistically and estimate the NFT sector to be worth $20 billion.
It is estimated in trillions of dollars, not billions, how valuable markets other than those where Bitcoin is gaining market share are. For example, some investors consider Bitcoin to be a type of “store of wealth”. Also, the physical gold reserves around the world are worth about 12 trillion dollars.
