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Ordinals, Inscriptions & NFTs On Bitcoin
By Laxmikant Khanvilkar
Since the beginning of 2023, Web 3 space has witnessed a resurgence in Bitcoin prices which, according to analysts, was driven by the emergence of Ordinals and Inscriptions on scene leading the increase in the most popular virtual digital currencies use cases.
Innovation of Ordinals and Inscriptions witnessed the start of ‘Bitcoin NFTs’ has shifted focus back to the entire Bitcoin ecosystem.
Analysts have maintained that ‘Inscriptions’ led a noticeable impact on Bitcoin’s on-chain metrics, and there is a rise in transaction fees. Perhaps, the speed of innovation is increasing and developers are shipping updates left, right and center.
The Ordinal protocol going live on January 2023, has enabled inscription of arbitrary data such as images, video, text etc., on the Bitcoin blockchain, to create a digital artifacts or NFTs.
Total Inscriptions are over 600,000 currently and growing fast. The renewed change has brought excitement in Bitcoin, with increased focus on projects building around the network and the entrance of major players such as Yuga Labs and Magic Eden.
Analysts have highlighted that not only has Bitcoin seen an impact through its mempool, transaction fees and block size, there has also been a cultural shift with how Bitcoin is being looked at.
Existing projects are getting more attention, while new builders are flocking to the ecosystem. IT seems there is suddenly an organic demand for Bitcoin blockspace. Much of this attributed to the prospect of higher rewards for the miners – who mine Blockchain to match buyer and seller – earlier relying on transaction fees and block rewards.
Transaction fees have averaged 1-2% of total miner rewards. Since start of 2023, transaction fees trending towards 2-3% of total rewards, with Hashrate Index rising towards 5%. It is definitely a change in the right direction, as analysts suggest.
How much of this is driven by Ordinals and Inscriptions is something to debate, yet, on-chain metrics would indicate that they are at least partially behind the increase.
Given the increase in activity on the Bitcoin blockchain, there is a possibility of opening up a plethora of new use cases for Bitcoin, will naturally lead the question of scalability and ability to handle the traffic.
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