200K Bitcoin NFTs and Counting, But Has the Crypto Craze for Ordinals Lost its Fizz?

200K Bitcoin NFTs and Counting, But Has the Crypto Craze for Ordinals Lost its Fizz?

2 March 2023

This January, Ordinals rocked the Bitcoin network, quickly becoming a heavily discussed topic among crypto enthusiasts. On Monday, however, this conversation was taken to new heights; data from Dune Analytics showed that over 200 thousand Bitcoins Inscriptions had been made so far.

Ordinal Inscriptions function in a similar way as non-fungible tokens (NFTs) and exist as virtual exchangeable assets inscribed on the smallest Bitcoin unit — an individual satoshi — named after Satoshi Nakamoto, the mysterious creator of Bitcoin. Inscribing became possible following the Taproot upgrade, which was activated on the Bitcoin network on November 14th, 2021, and allowed users to record information onto satoshis.

With Ordinals seeing immense popularity lately, fees on the Bitcoin network soared as high as $170,500 in inscriptions alone on February 15th this year. A total of $1.31 million has been paid to Bitcoin miners so far.

However, fees paid to Bitcoin miners have seen a steady decline from $54,000 on February 20th to just over $11,000 at the time of writing. This trend has been persistent since February 15th.

Casey Rodarmor, an architect of Ordinals, acknowledged that updates had not been released quickly enough and promised to remedy the problem in a timely manner.

Yuga Labs could also play a role in reviving the hype. A new series of 300 Ordinals was announced by Bored Ape Yacht Club on February 28th, and it will be the most high-profile use of the technology yet.

When it comes to Bitcoin transactions, the amount of fees you pay is calculated based on how large your transaction data is and the speed at which you want it processed. In times when network traffic is high, paying extra can be advantageous if you’d like instant confirmation of your transfer.

Fees increase when the demand for transaction processing exceeds the number of miners available. As per Bitcoin’s protocol, each individual block has a size of 1MB which limits the total transactions that can be processed in one block to just 1MB.

During the peak of Ordinals’ popularity, users inscribed anything that could fit in 1 MB blocks, ranging from a copy of a videogame Doom to messages and other creative content.

On February 7th, a total of 21,824 Bitcoin NFTs were created on the blockchain; these prints comprised text, pictures, videos, and sound recordings. The number of such assets minted is just over 5400 in a day at the moment.

With the overwhelming buzz around Ordinals, developers on other proof-of-work networks like Litecoin and Dogecoin have sought to emulate its success.

On February 19th, software engineer Anthony Guerrera initiated the Litecoin Ordinals project on GitHub after replicating the code from Bitcoin Ordinals.

According to Guerrera, the decision to use Litecoin was due to its indistinguishable functionalities and SegWit and Taproot upgrades comparable to those of Bitcoin.

Taking advantage of the newfound enthusiasm for Bitcoin NFTs, developers of applications on BTC sidechains such as Stacks have launched Ordinal-compatible wallets and venues, all fueled by their own tokens.

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