According to cryptanalytic platform Glassnode, the launch of Bitcoin’s non-fungible tokens (NFTs), known as ordinals, has pushed the number of non-zero Bitcoin addresses to a new all-time high of 44 million.
In a February 13 Glassnode report, the firm explained that for the first time in Bitcoin’s 14-year history, a portion of network activity is being used for purposes other than peer-to-peer Bitcoin (BTC) money transfers:
“This is a new and unique moment in the history of Bitcoin where innovation generates network activity without the classic transfer of coin volume for monetary purposes.”
Glassnode explained that the surge in ordinals contributed to a “short-term spike in Bitcoin network usage recently,” which has resulted in many “new active users” with non-zero BTC balances on the network:
“The main source of this activity comes from Ordinals, which, instead of carrying a large payload of coins, instead carry a large payload of data and new active users,” said Glassnode.
“It describes the growth of the user base […] from uses outside of the typical use cases for investments and remittances,” he added.
A new player competes for a place in the block
Glassnode noted that Ordinals is currently competing for block space demand, which is “creating upward pressure on the fee market,” but noted that this has not led to a significant increase in Bitcoin transaction fees.
According to Glassnode, since the launch of Ordinals on January 21st, the upper range of Bitcoin’s average block size has increased from 1.5MB-2.0MB to 3.0MB-3.5MB in a few weeks.
However, this did not lead to an increase in fees. While there have been some short-lived spikes, Glassnode stated that “a new lower bound on the transaction fee required to enable a block” has been reached since the ordinals hit their stride on January 21st.
The technology applications behind the Ordinal protocol were included in the Taproot soft fork, which went into effect in November 2021. Bitcoin Ordinals launched on January 21st.
Using the Ordinals numbering scheme, Bitcoin users can assign arbitrary satoshi content — the smallest denomination of BTC — allowing them to inscribe images similar to non-fungible tokens (NFTs), native bitcoins.
So far, over 78,400 NFT-like images and videos have been inscribed.
However, the impact of NFT-like images on Bitcoin has not been without controversy.
Bitcoin is already in “the next bull market cycle” – Pantera Capital
Some well-known “Bitcoiners,” such as Blockstream CEO Adam Back, have recently voiced their dislike of the Ordinals protocol, suggesting that it deviates from Bitcoin’s goal as a peer-to-peer electronic money system.
However, others were more open to the idea. Bitcoin bull Dan Held has argued several times that ordinals bring more “financial use cases for Bitcoin.”
Credit : cointelegraph.com
