Bitcoin: over 1 million non-fungible tokens
Ordinals were launched less than three months ago, but the Non-Fungible Tokens (NFT) equivalents on Bitcoin’s blockchain have already passed one million.
This weekend, Bitcoin Ordinals subscriptions crossed 1 million, generating over $4.8 million in tx fees for the network pic.twitter.com/aSxgngYBsO
— Will Clemente (@WClementeIII) 10 April 2023
According to data posted on dune.com, as of April 8, Ordinals inscriptions had passed 1,000,000, and are now approaching 1.1 million.
It is worth noting that until March 21 they had been growing steadily, but without a real boom, and then until April 1 the growth even slowed down a little.
There was a boom in the first nine days of April, when they rose from 680,000 to 1,050,000.
This boom seems to have stopped for now, but the average growth since they were officially launched is 15,000 new inscription ordinals created every day.
The fees for non-fungible tokens on Bitcoin
One of the main concerns with this initiative is the impact on fees.
In fact, inscriptions can neither be created nor exchanged using Bitcoin’s Layer 2 solution such as the Lightning Network, but only on-chain.
Since the number of daily transactions supported by Bitcoin’s blockchain is actually limited, a large number of transactions related to Ordinals can significantly increase the fees for BTC transactions on the chain.
To be fair, despite the boom, fees on Ordinals transactions were only high in the first half of February, and from March 22nd to 25th, and then almost always below 5 BTC per day in total.
In fact, the average cost per transaction on Bitcoin’s blockchain over the past two and a half months has increased a lot only in the days around March 23, and most likely not because of Ordinals.
In fact, these days the price of BTC experienced a temporary bump, going from $28,500 to $26,700 in a very short time, thus causing a lot of movement. In other words, it was BTC’s legacy transactions that affected Ordinal’s fees, and not the other way around.
In fact, for three days now, Ordinal’s transactions have generated less than 1 BTC per day in fees overall. Meanwhile, the average cost per transaction on Bitcoin’s blockchain, while down from March, is still around November 2022 levels, and only slightly lower than it was in May 2022.
Suffice it to consider that to date the total fees paid for Ordinals transactions are just over $5 million, which is only a small fraction of those paid for BTC transactions.
The preferred types of Non-Fungible Tokens (NFTs) created
One thing that is surprising is that the preferred type of Ordinals inscription created is text symbols, followed only by images.
At first, meaning most of the month of February, images dominated unchallenged, but since then textual inscriptions have taken over.
It is worth remembering that while real Non-Fungible-Tokens (NFT), for example on Ethereum, are just codes attached to a file, inscriptions on Bitcoin are real content, in text format, image, video and so on, which is registered on the blockchain.
On a strictly technical level, they are not NFTs, but actually having the same function as real NFTs attached to files, they work in an extremely similar way.
48% of all Ordinals created so far are text, followed by 34.5% of png images and 9% of webp images.
The numbers on Ordinals
In light of these numbers, it is possible to say that Ordinals has certainly been a good success, perhaps even more successful than expected, but it has not been a resounding boom.
It is also worth mentioning that this in itself is not a great time for the NFT market, but the trading volumes of NFTs on Ethereum are still hugely larger.
So while the launch turned out to be a success, perhaps even more successful than expected, this in no way means that the Ordinals market has exploded.
It will probably be necessary to wait for a general recovery in the NFT market to judge it, to assess above all its competitiveness with Ethereum and the other chains most used for this purpose.
Also, the chain that to date seems most capable of competing with Ethereum in this regard is Polygon, which is an Ethereum layer 2 that significantly reduces fees.
On average, today a transaction on Bitcoin’s blockchain costs around $2, with the median around $1, a figure that is significantly lower than on-chain transactions on Ethereum, but significantly higher than those on Polygon.
