• Ordinal NFTs, a recently deployed Bitcoin protocol, have pushed the 14-day Exponential Moving Average of transactions on the Bitcoin network to its highest level since April 2021.
• Despite taking up 526MB of block space and associated with a 6.77 BTC spend, the Ordinal NFTs do not appear to have had any impact on network fees thus far.
• Whether or not Ordinals will result in a wider uptick in Bitcoin’s network activity that benefits its price is uncertain at this point.
Impact Of Ordinal NFTs On The Bitcoin Network
Ordinal NFTs are a recently deployed Bitcoin protocol that has pushed the 14-day Exponential Moving Average (EMA) of transactions on the Bitcoin network to its highest level since April 2021, according to data from crypto analytics firm Glassnode. As of February 7th, over 13,000 Ordinal NFTs had been minted directly onto the Bitcoin blockchain, taking up 526MB of block space and associated with a spend of 6.77 BTC (worth around $150,000 at current prices).
Ordinals And Network Fees
The deployment of Ordinal NFTs directly onto the Bitcoin blockchain has been controversial, with some claiming it goes against pseudonymous Bitcoin creator Satoshi Nakamoto’s original vision for only financial purposes on the blockchain. Despite this debate over their existence, they are making an impression on the network – but so far without impacting network fees significantly. According to Glassnode data there has been no notable uptick in fees yet; as such miner revenue relative to its recent history remains suppressed.
BTC Price Impact Of Network Activity
The minimal impact on network fees means that it can be assumed that these new protocols have had little effect on the BTC price thus far either. Meanwhile, though transaction traffic has increased due to them, there does not seem to have been any significant change in unique daily users of the blockchain either according to Glassnode data.
Long-Term Impact On The Network & Price?
Whether or not Ordinals will result in a wider uptick in activity that benefits the BTC price is uncertain at this point; however some analysts and commentators have voiced concerns that if it led to an increase in network fees then miners would benefit long-term and security would be improved for everyone using bitcoin – but until now this does not seem likely given how low fees remain currently.
Conclusion
The deployment of Ordinal NFTs onto the bitcoin blockchain has had an impact on transactions and traffic without affecting mining revenues or pushing up fees yet – therefore its effects on bitcoin’s price remain unclear for now until further developments take place within this new protocol space which could affect wider levels of activity across all areas around bitcoin usage and value.