The surge in transactions drove a dramatic spike in bitcoin mining earnings.
According to statistics from the cryptocurrency research firm Messari, the new Ordinals NFT platform on Bitcoin [BTC] has experienced exponential growth since mid-January.
The New #Ordinals NFT project on Bitcoin aims to dispel the enduring myth that straightforward financial transactions should be the main use of the blockchain.
Additional information from Messari’s Twitter thread indicated that network costs had increased by 25% and that more of the available block space was being used.
While introducing an intriguing new use case, Ordinals has also sparked discussions about the ultimate goal of the Bitcoin network.
How do NFTs function on Bitcoin?
Simply said, Ordinals are NFTs that may be created directly on the Bitcoin blockchain, as opposed to NFTs on Ethereum (ETH), which refer to off-chain data and depend on token standards like ERC 721 to assemble a group of tokens. While Ethereum NFTs may be changed using metadata, all material saved in Ordinals since they are created on the blockchain is permanent and unchangeable.
Ordinals concentrate on satoshis, the smallest Bitcoin units. The protocol, according to NFTNow, enables users to encode each satoshi with data.
The non-financial use case of Ordinals, which critics claim would clog the network and increase transaction costs on the chain, has caused a rift in the crypto community.
On-chain activity sharply increases.
Data from Santiment indicated that the expansion of the Ordinals platform seems to have increased network traffic on Bitcoin.
Over the past week, the transaction volumes have multiplied and increased by more than four times. Additionally, a large jump in the velocity indicator suggested that BTC was being transferred between wallets rather regularly.
The prospect of increased network congestion may scare BTC purists, but miners may celebrate. According to Glassnode statistics, the miner revenue increased significantly following extended periods of decline.
As we approach the 2022 bear market’s lows, mining Bitcoin might become more lucrative with more rewards for their work.
Bitcoin-native NFTs might provide BTC the much-needed boost in the near term as it wilts under pressure from the SEC’s tightening rules on the crypto industry.
It can bring the chain in direct rivalry with market leaders in NFT trading like Ethereum [ETH] and Solana [SOL] if a new target audience is established.