Analyzing the impact of Ordinals on Bitcoin [BTC] network traffic

• Bitcoin difficulty reached a new all-time high on March 18.
• Of the total fees collected by BTC miners, Ordinals trading accounted for 22%.

According to data from Bitcoin explorer Mempool, the difficulty of Bitcoin [BTC] network hit a new all-time high of 43.55T, representing a 23% year-over-year (YTD) increase.

Due to the increase in difficulty levels, BTC miners had to use more computational power to mine blocks, as the hash rate jumped to 351 EH/s.

Source: Mempool

The total traffic on the network has increased significantly since the launch of Ordinal NFTs on the Bitcoin Mainnet in January 2023.

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Extra-‘Ordinals’

Since its launch, Bitcoin Ordinals has taken the crypto world by storm. According to Dune Analytics, the total number of Ordinals inscriptions reached 521,843 at the time of writing, with a staggering 58% of them minted in March alone.

The figure reached its all-time high on March 9 when more than 30,000 inscriptions were struck in a single day.

Source: Dune Analytics

Furthermore, the total transaction fees paid on the Bitcoin network have more than doubled in the past two months.

Source: Mempool

According to data from Dune, of the total fees collected by miners, Ordinals trading accounted for 22%.

In particular, Ordinals focus on BTC’s smallest units, satoshis. The protocol allows users to enter each satoshi of data. This data can include smart contracts that are then used to activate NFTs.

With BTC feeling the pinch of increased regulatory scrutiny, Bitcoin-native NFTs could give it the much-needed boost in the long run.

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Concerns about congestion

Despite the astonishing increase, the Ordinals project has divided opinion in the crypto community, with BTC purists alarmed by the idea of ​​more congestion on the network, resulting in higher fees and slower transactions.

However, their fears are not entirely unfounded. At the time of writing, memory consumption per block exceeded the 300MB limit by 366MB, causing the blockchain to discard any transaction worth less than 3.07 sats/vB, or Satoshi per byte.

Source: Mempool

However, more than 30,000 transactions had yet to be confirmed, suggesting that the network was slowing down considerably.