Late Wednesday, one Ordinal Punk NFT minted on the Bitcoin-native Ordinals Protocol sold for 9.5 BTC, roughly $214,000.
Feb 9, 2023 at 1:47 p.m. EST
The NFT collection minted on the Bitcoin-native Ordinals Protocol, sold out its mint earlier this month and features 100 NFTs in the style of NFT behemoth Yuga Labs’ CryptoPunks collection, which is built on Ethereum.
Ordinals Protocol utilizes Bitcoin’s Taproot upgrade, an improvement to secure the network and more efficiently facilitate transactions. It stores NFTs through inscriptions, a method of “inscribing” data in satoshis, or sats, which represent one hundred millionth of one bitcoin.
The NFTs comprising the Ordinal Punks collection were minted on the first 650 inscriptions of the Bitcoin network.
The concept of Bitcoin NFTs has caused a heated debate within the dominant blockchain’s community. Some purists believe the blockchain should be limited to financial transactions, while others point to the Ordinal Protocol’s popularity as a positive catalyst that will fuel more development on the blockchain.
Sam Callahan, Bitcoin analyst at financial services company Swan Bitcoin, told CoinDesk that while the popularity of Ordinal Punks will drive demand for block space, miner revenue and eventually Taproot adoption, it doesn’t come without risks.
“In the long term, if demand for these inscriptions proves to be long lasting, there is a risk that these inscriptions could impact other Bitcoin use cases like payments via the Lightning Network due to distorting Bitcoin’s fee market away from its use as an open monetary protocol,” said Callahan.
Network activity on the Bitcoin blockchain has hit a level not seen since China banned crypto miners in May 2021, according to data from CryptoQuant. The uptick stems from the popularity of the Ordinals protocol, which allows NFTs to be stored on Bitcoin. Okcoin Chief Operating Officer Jason Lau reacts to the report.
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