Ordinals, the Signal for Bitcoin Boom
Could Ordinals signal the resurgence of the Bitcoin Network?
Last week, Ordinals trading volume peaked at $35.2M, setting a new record and driving unprecedented NFT activity with 2.4M Inscriptions on the Bitcoin network. In fact, Ordinals activity have generated a total of $97.9M in fees, indicating a strong demand for participating in the ecosystem. However, this success has led to network congestion, resulting in higher transaction fees and greater confirmation time.
Inscriptions taking 35% of Bitcoin's blockspace caused a 46% rise in average block confirmation time to 158 minutes. This led to a 174% increase in network transaction fees, totaling $11.75M—over twice that of Ethereum's $5.58M fees. This situation benefited Bitcoin miners, earning them $40M in revenue, a milestone not attained since April 2022.
With the potential spot ETF approvals and Bitcoin halving by early next year, it is highly likely that we will see a rise in institutional and retail Bitcoin demand. However, network congestion remains a significant hurdle, deterring mass adoption due to extended transaction times and increased costs. Similar to Ethereum, implementing Layer 2 solutions could address these challenges, allowing for higher transaction throughput while supporting the execution of smart contracts.
The record-breaking achievements of Ordinals have highlighted the need for scalable solutions and infrastructure upgrades on the Bitcoin network. As Ordinals gain popularity and compete for blockspace, continuous innovation is essential to meet evolving network demands and ensure seamless operations.