Bitcoin's Ordinals protocol could be here to stay

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Bitcoin's Ordinals protocol could be here to stay

NFT-like assets could be there to stay.

The value of the Ordinals protocol has surged as one million NFT-like assets have been inscribed on the Bitcoin network, as the popularity of the Ordinals protocol surges on the world's most valuable blockchain.

Ordinary use jumped at the beginning of the month and passed the million mark on Sunday.

Inscriptions' increasing popularity a little more than two months after their debut suggests the new asset class is here to stay, a fact that could have long-term implications for the Bitcoin network's financial health.

Bitcoin has traded for the first time since June 2022, with the price of the currency hovering above $30,000. The digital asset is up 80% this year.

The Defiant spoke to Alex Miller, the CEO of Bitcoin developer tooling company Hiro.

Casey Rodarmor, a former Bitcoin core engineer, led the team that created Ordinals, and the protocol was first used to 'inscribe' data, such as images and videos, directly to the Bitcoin blockchain in February. Ordinals leverages upgrades that came to Bitcoin in 2017 and 2021, and has led to a debate over the proper use of the network.

Because inscriptions take up storage space, they increase the fullness of every block that miners compete for to append to the chain. Miners should, in theory, be willing to invest to boost computing power and increase their chances of winning the mathematical lottery that grants them the privilege of appending the next block and earning the resulting bitcoin payout.

The bitcoin-denominated reward for producing blocks halves every few years will be a great deal as Inscription-filled blocks are worth more.

Ordinals have attracted Ethereum-native projects like CryptoPunks into the Bitcoin network, but have also spawned grassroots collections like Taproot Wizards.

Miller said he would not comment on the outcome, but added: ''I don't think we have to go to war,'' i.e., we have to make choices,'' he said.