The popularity of Ordinals NFTs has led to an unprecedented surge in transaction fees on the Bitcoin network, reaching a new high.
Bitcoin “NFTs” has become a contentious issue
According to on-chain data, the past two weeks have seen a significant increase in transaction fees on the Bitcoin network. Fees have risen from $0.77 on January 29 to a peak of $1.95 on February 10. The median transaction fee on the blockchain has also risen to $0.73 from $0.25 on January 30.
The Ordinals project works by assigning metadata to satoshis, the smallest unit of Bitcoin, thus giving each satoshi a distinct identity and making them non-interchangeable and traceable, similar to NFTs. This became possible after the Bitcoin network underwent two updates, Segwit in 2017 and Taproot in 2021.
The high demand for Ordinals NFTs is thought to be the primary cause of this rise in fees, and experts have expressed worries that the network may be unable to keep up with the growing demand. This rise in fees has sparked concerns about the future of Bitcoin, with some experts questioning if the network is capable of handling the increase in demand.
The increase in transaction fees has raised questions about the future of the world’s leading cryptocurrency. Some experts have suggested that the network may struggle to keep up with the growing demand for NFTs, leading to increased fees and slower transaction times.
Demand for Ordinals NFTs on the rise
A study by BitMEX Research found that during the period of December 14 to February 7, over 10,000 NFTs were created, taking up 526 megabytes of block space. During this time, 6.77 BTC was spent on Ordinals-related transactions, which has contributed to the increased demand and value of NFTs.
The booming interest in Ordinals NFTs has also led to a rise in their value, with NFT Now reporting that some NFTs have sold for as high as 11 BTC due to skyrocketing demand. This surge in NFT demand is believed to be contributing to the rise in Bitcoin transaction fees, and some experts are worried that the network may not be equipped to handle this growth in the long run.
Major NFT projects are turning to Bitcoin
Despite the concerns, many in the crypto community remain optimistic about the future of Bitcoin. They believe that the network will continue to evolve and improve, adapting to the growing demand for NFTs and other digital assets.
Despite not having official backing from Yuga Labs, the creators of CryptoPunks and Bored Apes, the Ordinals project has already gained the attention of well-known collectors. This is because the Ordinals project has made it possible for the CryptoPunks collection to be recorded on the Bitcoin blockchain.
The Ordinals project presents itself as the “pioneering collection of 10,000 NFTs on the Bitcoin network.” Although the artwork has been pre-recorded on the blockchain, the satoshis have yet to be associated with them.