Bitcoin Miners Earn $600K from Ordinals NFT Transactions15. February 2023
• Bitcoin miners have earned nearly $600,000 in two months from a new NFT protocol called Ordinals.
• This protocol was made possible by Bitcoin’s network soft fork upgrades Segregated Witness (SegWit) and Taproot.
• The number of pending SegWit and Taproot transactions has surged since the launch of Ordinals.
Bitcoin Miners Earned Nearly $600K From NFT Transactions
The hype around nonfungible tokens (NFTs) is real, with inscriptions now regularly taking over 50% of Bitcoin block space. In two months, Bitcoin miners have earned nearly $600,000 in BTC transaction fees from a new controversial NFT protocol called Ordinals.
What Are Bitcoin Ordinals?
Ordinals allow users to inscribe data in images and other media types into newly mined blocks on the blockchain that is otherwise largely used for peer-to-peer (P2P) monetary transactions. Since its launch in mid-December 2022, users have inscribed nearly 74,000 NFTs into the Bitcoin blockchain.
Increasing Demand for Block Space
The introduction of Ordinals was made possible by Bitcoin’s Segregated Witness (SegWit) and Taproot network soft fork upgrades from 2017 and 2021 respectively. These upgrades increased the block capacity to four megabytes (4 MB), while also allowing batching together multiple transactions as long as their size does not exceed 4 MB. This feature allows the inscription of data such as images and videos into Bitcoin blocks. The mean block size jumped from 1.5–2 MB to between three and 3.5 MB in early February alongside rising demand for block space due to the surge in SegWit and Taproot transaction numbers since the launch of Ordinals.
Debate Over Place For NFTs In The Ecosystem
The influx of users inscribing NFTs on to the blockchain has sparked debate over whether they should take up so much space or not; some argue that it could be better allocated elsewhere while others argue that this type of activity is necessary for bringing real life use cases onto the blockchain and increasing adoption overall.
The emergence of Ordinals has opened up a world of possibilities when it comes to creating scarcity around digital collectibles through true ownership on a secure chain like Bitcoin’s blockchain – an exciting development for both those invested in cryptocurrencies as well as those looking to trace back ownership rights for digital artifacts using immutable records stored on an immutable ledger like that found within cryptocurrency technology today!