Grayscale Reports Explosive Popularity of Ordinals, a New NFT on BTC
- Despite criticisms, GBTC argues that Ordinals positively impact Bitcoin
- The positive impact includes increasing fees paid to miners and attracting developers.
According to a report from Grayscale Bitcoin Trust (GBTC), the largest institutional crypto fund, a new non-fungible token (NFT) called Ordinals is quickly gaining popularity on the Bitcoin network.
In the report, GBTC described Ordinals as unique digital assets created by attaching data to individual satoshis, the smallest denomination of Bitcoin (BTC). It added that the numerical assignment allows for uniqueness, and Ordinals have generated significant attention in the crypto ecosystem, surpassing one million inscriptions on April 8, 2023.
Notably, Ordinals were first created in December 2022 by Bitcoin developer Casey Rodarmor. Since then, they have quickly become a popular way to create and trade unique digital assets on the Bitcoin network.
While the use of Ordinals deviates from the conventional peer-to-peer electronic cash system, numerous criticisms have arisen from those who disapprove of them. The concerns include that it strays from Bitcoin’s initially conceived purpose, blockchain bloat, and compromising fungibility.
However, Grayscale argued that Ordinals are a byproduct of utilizing the Bitcoin blockchain as it exists today and the subsequent crypto innovations that have come since, even if not initially envisioned by Bitcoin’s creator.
Regardless of the widespread criticisms, the institutional crypto fund believes that Ordinals favor the Bitcoin network in two ways. It said Ordinals have increased total fees paid to miners, which could establish a sustainable baseline level of transaction fees to incentivize miners.
Secondly, Ordinals have the potential to attract renewed developer excitement to the Bitcoin community, which some crypto insiders and developers have criticized as a relatively stagnant community and blockchain.