Passed fad? Bitcoin Ordinals inscriptions just hit a new milestone

Bitcoin-based NFTs and meme tokens are not losing steam. Far from it – Ordinal inscriptions topped 9 million on Thursday, tripling the total number of digital objects on the blockchain since May 1, when the number was just over 3 million, per public blockchain data curated by Dune.

Ordinals is a protocol for “writing” things like artwork, profile pictures, and even applications and playable games onto the Bitcoin blockchain. It was launched in January and quickly became a phenomenon as users etched media onto the blockchain.

While some critics continue to call Ordinals an abuse of the Bitcoin blockchain that should be blocked on the network — amid increasing network congestion and transaction fees — other Bitcoin advocates like MicroStrategy founder Michael Saylor call the protocol a “catalyst” for Bitcoin adoption.

“Anytime someone builds an application that’s cool on Bitcoin, like all the Ordinals and inscriptions and whatever drives up transaction fees, that’s a catalyst,” Saylor said on the PBD Podcast earlier this month.

Saylor went on to say at last week’s Bitcoin 2023 event that MicroStrategy — the public company with the largest holdings of Bitcoin on its balance sheet — is looking at how to use Ordinals to launch applications that run on the blockchain.

Bitcoin Ordinals were already a hot topic after Bitcoin developer Casey Rodamor launched the protocol in January, but it wasn’t immediately clear whether the short-term buzz would last.

Ordinal’s popularity increased again after the BRC-20 token standard was implemented in March, enabling the creation of fungible tokens (including meme tokens) on Bitcoin using the same protocol. Today, everyday text-based inscriptions used to stamp BRC-20 symbols far outnumber inscriptions for works of art and other media.

With BRC-20, creative developers began loading the Bitcoin network with meme tokens that sent the cost of network transactions skyrocketing. On May 8, the daily fees paid to create Bitcoin Ordinals peaked at 257 BTC, around $6.7 million at the time.

“Contrary to what you might see in certain filter bubbles on Twitter, higher fees on Bitcoin are a very good thing,” said pseudonymous Ord.io founder Leonidas Decrypt after the Ordinals number reached 3 million. “It indicates strong demand for Bitcoin’s block space, which is critical to the long-term success of the protocol.”

NFT marketplaces have noticed the popularity of Ordinals. In April, Magic Eden added support for Ordinals, and Binance added support for its marketplace in May.

And the rise of NFTs and meme tokens via Ordinals has also spread beyond Bitcoin: Ordinals have been transferred to both Litecoin and Dogecoin, which share origins in Bitcoin’s code, leading to increasing transactions across these chains as well.