Bitcoin (BTC) Ordinals, also referred to as Bitcoin NFTs, have the potential to reignite developer interest in Bitcoin and increase mining fees, according to cryptocurrency investment firm Grayscale. In an April 27 “Market Byte” blog post, the firm suggested that Ordinals offer two key benefits to the growth and development of the Bitcoin ecosystem.
Firstly, Grayscale contends that the introduction of Ordinals has led to a significant increase in fees paid to miners, potentially establishing a sustainable baseline for transaction fees to incentivize miners. This could ensure “continued network security throughout the lifetime of the Bitcoin network.” Within two months of the protocol’s launch, Bitcoin miners received more than $600,000 in fees due to Ordinal inscriptions. At the time of publication, this figure exceeds $6.5 million.
Secondly, the investment firm posits that the “velocity of NFT adoption” through Ordinals could attract new Bitcoin users and stimulate more development on the Bitcoin network, promoting a development-oriented community and culture.
On April 30, Ordinals reached a new record with daily inscriptions surpassing 300,000. Around the same time, the number of Bitcoin transactions neared multi-year peaks, per blockchain data firm IntoTheBlock.
However, the rapid ascent of Ordinals has sparked controversy in the wider Bitcoin community. Critics, predominantly Bitcoin maximalists, argue that the Ordinal movement deviates from Bitcoin’s original purpose as a peer-to-peer electronic currency and unnecessarily congests valuable block space.
Blockstream CEO Adam Back is among these critics, labeling Ordinals as “useless” and reiterating his preference for Bitcoin as a currency. He also acknowledged Bitcoin’s censor-resistant design but urged for more efficient methods to avoid block space waste.
In summary, the rise of Bitcoin Ordinals has generated a significant debate within the crypto community: Are Ordinals the savior of network security and a catalyst for development on the Bitcoin network, or do they represent a detour from Satoshi’s original vision for the leading cryptocurrency? The answer depends on one’s perspective, but the impact of Ordinals on mining fees and developer interest is undeniable.