Bitcoin Exceeds 1M Ordinals Inscriptions
NFT-like assets may be here to stay
One million NFT-like assets have been entered onto the Bitcoin network, as the popularity of the Ordinals protocol increases on the world’s most valuable blockchain.
Ordinal usage jumped at the beginning of the month and passed the million mark on Sunday.
Inscription’s growing popularity a little more than two months after its debut suggests that the new asset class is here to stay, a fact that could have long-term implications for the financial health of the Bitcoin network.
On April 10, Bitcoin traded above $30,000 for the first time since June 2022. The digital asset is up 80% this year.
BTC priceSource: The Defiant Terminal
“In the long term, I think it significantly increases both the security and durability of the bitcoin network,” Alex Miller, CEO of Bitcoin developer tools company Hiro, told The Defiant.
Former Bitcoin core engineer Casey Rodarmor led the team that developed Ordinals, and the protocol was first used to “write” data, such as images and videos, directly to the Bitcoin blockchain in February. Ordinals take advantage of upgrades that came to Bitcoin in 2017 and 2021, and have started a debate about the proper use of the network.
Adam Back, the founder of Blockstream, for example, cited the “sheer waste and stupidity of a coding.”
However, in Miller’s view, Ordinals are increasing usage and demand for the bitcoin network.
Because inscriptions take up storage space, they increase the size of each block that miners compete to add to the chain. Fuller blocks are worth more, and miners should in theory be willing to invest to increase computing power and increase their chances of winning the mathematical lottery that gives them the privilege of adding the next block and earning the resulting bitcoin payout.
That inscription-filled blocks are worth more will matter a lot, since the Bitcoin-denominated reward for producing blocks is halved every few years.
“Ordinals have already contributed tens of millions of dollars to the Bitcoin security budget,” Miller said. “If you want to maintain the budget on [Bitcoin] security … so that people are still willing to spend a lot of money to mine, which increases competition and makes it harder to attack the network, miners need to be able to make money from somewhere [other than block rewards].”
Ordinals have attracted Ethereum-native projects like CryptoPunks to the Bitcoin network, but have also spawned grassroots gatherings, such as Taproot Wizards.
“The fact that it’s had this persistence and the rate of inscriptions has held up and grown … I think that’s a big deal,” Miller said. “Crypto sees a lot of things that pop up, are hot for a week or two, and then just go away.”
