The launch of Bitcoin nonfungible tokens (NFTs) — referred to as Ordinals — has actually tipped the variety of non-zero Bitcoin addresses to a brand-new all-time high of 44 million, according to crypto analytics platform Glassnode.
In a Feb. 13 report from Glassnode, the company described that for the very first time in Bitcoin’s 14-year history, a part of network activity is being utilized for functions aside from peer-to-peer financial Bitcoin (BTC) transfers:
“This is a new and unique moment in Bitcoin history, where an innovation is generating network activity without a classical transfer of coin volume for monetary purposes.”
Glassnode described that the Ordinals rise has actually contributed to a “short-term uptick in Bitcoin network usage of late” which has actually brought lots of “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, is instead carrying a larger payload of data and new active users,” stated Glassnode.
“This describes a growth in the user base […] from usage beyond the typical investment and monetary transfer use cases,” it included.
A brand-new gamer completing for block area
Glassnode kept in mind that Ordinals is now completing for block area need, which is “creating upward pressure on the fee market,” but noted that this hasn’t led to a significant increase in Bitcoin transaction fees.
According to Glassnode, since Ordinals launched on Jan. 21, the upper range of the mean Bitcoin block size has increased from 1.5-2.0 MB to 3.0-3.5 MB in a matter of weeks.
However, this hasn’t led to a surge in fees. While there have been some short-lived spikes, Glassnode stated that a “new lower bound transaction fee required for block inclusion” has actually been reached because Ordinals made their mark on Jan. 21.
The technological applications behind the Ordinal protocol were enabled by the Taproot soft fork, which took effect in November 2021. Bitcoin Ordinals launched on Jan. 21.
Through the use of the Ordinals numbering scheme, Bitcoin users can assign arbitrary content to satoshis — the smallest denomination of BTC — which enables them to inscribe Bitcoin-native, nonfungible token (NFT)-like images.
There have been over 78,400 NFT-like images and videos inscribed thus far.
The impact of the NFT-like images on Bitcoin hasn’t come without controversy though.
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 his disliking the Ordinals protocol, suggesting that it deviates from Bitcoin’s purpose as a peer-to-peer electronic cash system.
However, others have been more open to the idea. Bitcoin bull Dan Held has asserted on several occasions that Ordinals bring more “financial use cases to Bitcoin.”
