Decoding Ordinal’s NFT Project on Bitcoin- Can it compete with ETH NFTs?
- Bitcoin-native NFTs recorded a 25% growth in network fees.
- Bitcoin mining revenue rose sharply, driven by an increase in transactions.
The new Ordinals NFT platform on Bitcoin [BTC] recorded exponential growth since mid-January, data from crypto research firm Messari showed. The daily Ordinal NFT coins increased by 300 times in the same time period.
1/ If we told you #Bitcoin NFTs made waves in the sector would you believe us?
The new #Ordinals The Bitcoin NFT project attempts to challenge the long-standing debate that the blockchain should primarily be used for simple financial transactions. 🧵 pic.twitter.com/2O0jHjzRLZ
— Messari (@MessariCrypto) 9 February 2023
Additional data from Messari’s Twitter thread pointed to a 25% growth in network fees and an increased share of available block space.
While Ordinals has presented an exciting new use case, it has also sparked debates surrounding the ultimate purpose of the Bitcoin chain.
Read Bitcoin Price Prediction 2023-2024
How do NFTs work on Bitcoin?
To put it simply, Ordinals are NFTs that can be minted directly on the Bitcoin blockchain, unlike NFTs on Ethereum [ETH] which points to off-chain data and relies on token standards such as ERC 721 to create a pool of tokens. Since Ordinals are minted on the blockchain, all stored content is permanent and immutable while Ethereum NFTs can be changed using metadata.
Ordinals focus on BTC‘s smallest units, satoshis. In accordance NFT Now, the protocol allows users to enter each satoshi of data. This data can include smart contracts that are then used to activate NFTs.
Another potential advantage of Bitcoin NFTs over Ethereum NFTs could be the low transaction fee due to Taproot upgrade which was intended to make Bitcoin transactions more efficient.
However, Ordinals have divided opinion in the crypto community, and those who don’t object to its non-financial use case which will overload the network and increase transaction fees on the chain.
Activity in the chain picks up decisively
The growth of the Ordinals platform appeared to have increased network activity on Bitcoin, Santiment data showed.
Transaction volumes increased in the last week, increasing by more than four times. The speed indicator also revealed a sharp spike, suggesting that BTC was frequently moving between wallets.
Source: Sentiment
While BTC purists may be horrified by the idea of more network congestion, miners got a chance to rejoice. According to data from Glassnode, miner earnings witnessed significant growth after sustained periods of downturns.
With increased rewards for their efforts, BTC mining could become more profitable, coming off the lows of the 2022 bear market.
Source: Glassnode
How much is 1,10,100 BTC worth today?
With BTC wilting under pressure from the SEC’s increased regulation of the crypto market, Bitcoin-native NFTs could give it the much-needed boost in the short term.
With a new target audience in place, it could put the chain in direct competition with market leaders in NFT trading such as Ethereum [ETH] and Solana [SOL].
