Rise in popularity of Bitcoin NFTs
The popular ETH-based NFT collection “CryptoPunks”, which drove the NFT (non-fungible token) boom, seems to have sparked the price of Bitcoin NFT as well.
— DEGEN NEWS 🗞️ (@DegenerateNews) February 9, 2023
In case you missed it: OrdinalPunks Inscription #620 sold for 9.5 BTC (~$214,766.5)
The Ordinals Protocol, which just launched on January 21st of this year, made it possible to create NFTs on the Bitcoin blockchain. The Bitcoin NFT, which traded at a value of 27.4 million yen, is called “Ordinal Punks” in a style reminiscent of Yuga Labs’ “CryptoPunks” collection built on Ethereum.
A total of 100 Ordinal Punks NFTs were made and have already sold out. This time, the high of 9.5 BTC is “Punk 94,” which is based on the extremely rare alien CryptoPunks, and the original has reportedly fetched the equivalent of 3.15 billion yen ($24 million).
The surge in interest in Bitcoin NFTs can also be read from on-chain data.
The research division of crypto asset (virtual currency) derivatives exchange BitMEX analyzed Bitcoin blockchain data on Ordinals. It is pointed out that the use of Ordinals has increased rapidly this month. By February 7th, more than 13,000 Ordinals NFTs were confirmed, consuming 526MB of block space and spending transaction fees of 6.77BTC.
Ordinals Cumulative Number of Transactions
connection:Biggest 4MB Bitcoin NFT Ever Minted, Community Controversial
What is Ordinals
Ordinals is a protocol designed by former Bitcoin Core contributor Casey Rodarmor. By using the functions introduced in the Bitcoin upgrade “Taproot” that enhances the safety and efficiency of the network, any data can be stored directly in the Bitcoin blockchain without going through sidechains or Layer 2. .
Ordinals allows users to explore, transfer and receive individual satoshis by serializing the smallest unit of bitcoin, the satoshi (1/100 millionth of 1 BTC). Data such as videos and images can also be included in a single satoshi.
In Ordinals, adding content such as text and images to individual satoshis is called Inscription, and the data is expressed as “digital artifacts” instead of NFTs.
Bitcoin NFT created one after another
NFT collections similar to Ordinal Punks have also been created, such as ‘Bitcoin Punks’, a minted replica of all 10,000 original CryptoPunks.
Also, the Ethereum NFT collection “OnChain Monkey”, which appeared in 2021, was born as an NFT on the Bitcoin blockchain via Ordinals.
OnChainMonkey is the first 10K collection to be inscribed on Bitcoin via Ordinals!
Own an ETH OCM Genesis = Owning a BTC OCM Genesis
All on-chain on Bitcoin on Feb 8, 2023, and all on-chain on Ethereum on Sept 11, 2021!
— OnChainMonkey (@OnChainMonkey) February 9, 2023
All 10,000 NFTs, the same number as Ethereum NFTs, have been completely replicated on Bitcoin. Following this announcement, the price of OnChain Monkey’s NFTs surged nearly threefold.
Metagood, which runs OnChain Monkey, said enabling trading of Bitcoin NFTs is the next step, noting the need to create trading-related tools around Ordinals. The company plans to build a bridge between Ethereum and Bitcoin in the future, allowing NFT holders to switch between the two versions.
Limited trading environment
Ordinal’s bitcoin NFT is attracting attention, but the environment for trading on open markets such as OpenSea like conventional NFTs is not yet ready. Transactions such as Ordinal Punks are conducted directly between users or through escrow services. In order to transfer between wallets, it is necessary to operate a full node, which is a very high technical hurdle.
Some users have warned that this lack of trading infrastructure could be the biggest NFT scam in history.
The biggest NFT scam of all time?
Unless you’ve been living under a rock the last week, you’ve probably heard about Ordinals
Here’s why you should be EXTREMELY careful about this, and why your favorite influencer might not have your best interest in mind 🧵👇
— TheNorwegian 💎 (@TheNorwegianNFT) February 9, 2023
TheNorwegian pointed out that all transactions are over-the-counter (OTC) transactions, and the large information asymmetry and low transparency are likely to be hotbeds for fraud.
Whether the Ordinal boom is just a temporary thing or whether it will continue to grow depends on how much the marketplace, brand power, wallet, and other ecosystems that support Bitcoin NFT will be enriched in the future. It depends.