In the world of non-fungible tokens (NFTs), Bitcoin has been making waves with its Ordinals feature. Ordinals are NFTs that can be minted directly onto the Bitcoin blockchain, unlike Ethereum-based NFTs that rely on off-chain data. This new feature has seen significant growth since its introduction in January, with nearly 35 million inscriptions minted by September, according to a report by blockchain analytics firm Galaxy Research.
Despite the broader NFT market experiencing a downturn, Ordinals have gained traction and flourished on the Bitcoin network. While NFT trade volumes declined in 2023, Ordinals accounted for 18% of all NFT volumes in May. This surge in activity has propelled Bitcoin’s NFT trading volume to rank third in the market, only behind Ethereum and Solana.
However, the popularity of Ordinals has also led to increased transaction fees on the Bitcoin network. The high demand for blockspace due to the bulk minting of BRC-20 tokens caused a transaction jam in the mempool that lasted for about four months. As a result, users had to bid up fees to ensure their transactions were included in blocks.
Despite its success, Ordinals still has room for improvement. Bitcoin’s minting activity in the first 200 days was significantly lower compared to other networks with well-developed NFT ecosystems. The BRC-20 standard used for minting inscriptions was found to be inefficient, and more efficient token standards were proposed to simplify the process. Additionally, there is a need to put a greater emphasis on minting image-based NFTs.
Overall, Bitcoin’s venture into the NFT space with Ordinals has been a promising one. While there are areas for improvement, the growth and success of Ordinals show the potential of Bitcoin as a network for facilitating NFT transactions. With continued development and innovation, Bitcoin’s future in the NFT market looks bright.