Bitcoin hits record 44 million non-zero addresses thanks to Ordinals: Glassnode

The launch of Bitcoin nonfungible tokens (NFTs) – known as Ordinals – has tipped the number of non-zero Bitcoin addresses to a new all-time high of 44 million, according to crypto analytics platform Glassnode.

In a February 13 report from Glassnode, the firm explained that for the first time in Bitcoin’s 14-year history, some network activity is being used for purposes other than peer-to-peer Bitcoin (BTC) monetary transfers:

“This is a new and unique moment in Bitcoin history, where an innovation generates network activity without a classic transfer of coin volume for monetary purposes.”

Glassnode explained that the rise of Ordinals has contributed to a “short-term surge in Bitcoin network usage recently” that has brought many “new active users” with a non-zero BTC balance to the network:

“The primary source of this activity is due to Ordinals, which instead of carrying a large payload of coin volume, instead carry a larger payload of data and new active users,” Glassnode said.

“This describes a growth in the user base […] from uses beyond the typical investment and remittance use cases,” it added.

A new player competing for block space

Glassnode noted that Ordinals are now competing for demand for block space, which “creates 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 Ordinals launched on January 21st, the upper range of the average Bitcoin block size has increased from 1.5-2.0MB to 3.0-3.5MB within a few weeks.

However, this has not led to an increase in fees. While there have been some short-lived spikes, Glassnode stated that a “new lower limit transaction fee required for block inclusion” has been reached since Ordinals made their mark on January 21st.

The technological applications behind the Ordinal protocol were enabled by the Taproot soft fork, which took effect in November 2021. Bitcoin Ordinals were launched on January 21.

Through the use of the Ordinals numbering scheme, Bitcoin users can assign arbitrary content to satoshis – the smallest denomination of BTC – enabling them to enter Bitcoin-native, nonfungible token (NFT)-like images.

There have been over 78,400 NFT-like images and videos entered so far.

However, the impact of NFT-like images on Bitcoin has not come without controversy.

Related: Bitcoin is already in its ‘next bull market cycle’ – Pantera Capital

Some notable “Bitcoiners” such as Blockstream CEO Adam Back have recently expressed their distaste for the Ordinals protocol, suggesting that it deviates from Bitcoin’s purpose as a peer-to-peer electronic cash system.

Others, however, have been more open to the idea. Bitcoin bull Dan Held has claimed on several occasions that Ordinals bring more “economic use cases to Bitcoin”.