May 01, 2023
Ordinals Could Boost Bitcoin Mining Fees, Grayscale Suggests
The Bitcoin (BTC) Ordinals, also known as Bitcoin NFTs, have the potential to reinvigorate developer enthusiasm for Bitcoin and increase mining fees, according to cryptocurrency investment firm Grayscale.
In a recent Market Byte blog post, Grayscale highlighted two key benefits that Ordinals can provide to the Bitcoin ecosystem. The first is an increase in miner fees. The firm noted that since the launch of the protocol, fees paid to miners have risen substantially.
“The advent of ordinals has led to an increase in total fees paid to miners, which could establish a sustainable baseline level of transaction fees to incentivize miners and ensure continued network security throughout the lifetime of the Bitcoin network.”
Since its launch, more than $6.5 million has been paid to Bitcoin miners in fees generated by Ordinal inscriptions. On April 30, the number of daily inscriptions hit a new record, surpassing 300,000. This increase in transactions has also led to Bitcoin transaction numbers reaching levels not seen in a number of years, according to blockchain data firm IntoTheBlock.
Grayscale also believes that Ordinals and the rapid adoption of NFTs could attract new users to the Bitcoin network and spur more development.
“We believe the emergence of ordinals is likely to promote a development-oriented community and culture in support of the Bitcoin network.”
The surge in popularity of Ordinals has been met with criticism from some Bitcoin maximalists, who argue that the protocol is straying from its original purpose as a peer-to-peer electronic currency and clogging up valuable block space. Blockstream CEO Adam Back has been a vocal critic of Ordinals, claiming that he is “more into Bitcoin as a currency.”
However, despite the criticism, Ordinals have become increasingly popular among crypto enthusiasts and have opened up a new avenue for NFTs to be marketed and sold on the web3 space. NFT marketing agencies are now offering services to help promote and sell NFTs on Twitter. Web3 agencies are also offering services to help businesses navigate the complex web3 landscape.
The potential of Ordinals to increase miner fees and attract new users to the Bitcoin network could be an important step in the continued growth and development of the Bitcoin ecosystem. As the demand for NFTs continues to grow, it will be interesting to see how Ordinals and other NFTs will shape the future of the crypto industry.
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