A new use on Bitcoin – Over the past few weeks, we have witnessed something surprising, to say the least, with the rise of NFTs on the network. Bitcoin through the Ordinals project. This new project has led to renewed interest and activity in Bitcoin.
Ordinals: NFTs on Bitcoin
At the end of January, the project Ordinals has started to be talked about. In fact, this one has introduces NFTs to the Bitcoin network. A first in the use cases of the network, until now reserved for financial transactions.
To do this, the protocol will transform potential NFT satoshis. These satoshis can then be identified using software developed by Ordinals. In practice, Ordinals takes advantage of the Taproot update which relaxed the block size limit. Therefore, Ordinals is able to store its NFTs on-chain.
Since then, interest in NFTs, Bitcoin has exploded. So, Ordinals issued a collection of NFTs OrdinalsPunkinspired (not to say copied) from Ethereum’s CryptoPunks.
Some items in this collection were sold OTC at several BTC. For example, on February 10, a OrdinalsPunk been sold for the modest sum of 10.5 BTCor $216,000.
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Ordinals Pushes New Records on Bitcoin
Unsurprisingly, the Ordinals NFT craze has led to an uptick in Bitcoin activity. This has been demonstrated Glassnode in its latest Bitcoin report.
Thus, Bitcoin registered a new ATH in the number of addresses with a positive balance. In total, Bitcoin now has 44.06 million addresses with a positive balance.
In addition, Ordinals also represent new competitors in the bitcoin fee market. Indeed, faced with the demand for these NFTs, many blocks have been saturated with Ordinals transactions.
“Due to this new activity, the Bitcoin network has found a new block space buyer, creating upward pressure in the fee market. Fee market analysis is a good indicator of increasing demand for block space, and tends to show up during periods of overall demand growth. »
Ordinals Drives Taproot Adoption
The update Taproot was activated in December 2021 on the Bitcoin network. However, it has been used very little for almost a year.
However, Ordinals has had a positive impact on Taproot usage. In effect, Taproot adoption skyrocketed, from 1% in December 2022 to 9.4% currently. The same goes for Taproot usage, which grew from 1% at the end of January to 4.2%.
Now, several developers are thinking about creating a decentralized marketplace to avoid OTC trading. However, the increase in activity and therefore fees on Bitcoin is a boon for miners. So, the latter have seen their income explode.
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