TL;DR
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ICYMI: Until January of this year, you couldn’t make NFTs or meme coins using the Bitcoin network. But once the functionality was proven, the floodgates opened.
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There are now 5 million Bitcoin NFTs (aka “Ordinals”) in circulation (while there were only 2.5 million this time last week). And the value of Bitcoin-based meme coins totaled just over $1 billion.
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The increased volume of “stuff” to be traded on the Bitcoin network is slowing everything down. More meme coins/NFTs traded on the network means more congestion.
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Some people on the Bitcoin developer team don’t want these “junk coins” slowing down Bitcoin…so they’re trying to rally support to scrap the functionality all together.
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This would essentially invalidate the 5 million Bitcoin NFTs and $1 billion worth of BTC meme coins and massively reduce the cost per transaction on the Bitcoin network.
Full story
ICYMI: Until January of this year, you couldn’t make NFTs or meme coins using the Bitcoin network.
But once the functionality was proven, the floodgates opened.
There are now 5 million Bitcoin NFTs (aka “Ordinals”) in circulation (while there were only 2.5 million this time last week).
And the value of Bitcoin-based meme coins totaled just over $1 billion.
…ok, that sounds like growth (?) Why is there ‘a war brewing’?
The increased volume of “stuff” to be traded on the Bitcoin network is slowing everything down. More meme coins/NFTs traded on the network means more congestion.
Bitcoin purists hate it – they believe Bitcoin should serve one coin (BTC), with one function (a decentralized digital form of money).
But Bitcoin miners are love It!
Miners run the Bitcoin network.
It’s the people who have warehouses full of computers competing to process transactions. Without them, Bitcoin is just an idea.
So why do they like this increased congestion? The money honey!
Look, miners are currently getting 6.25 Bitcoin (~$176k) for every group (or ‘block’) of transactions they process – and a new block is processed every 10 minutes.
They all compete to solve complex math problems – and the first to solve it wins the right to process the block (and collect 6.25 Bitties).
…but they also receive transaction fees from the people sending the Bitcoin (the higher the fees, the faster the transaction is processed).
Know that for the most part people really pay close attention to transaction fees – they get too distracted by the whopping 6.25 BTC reward.
But with so much competition to get transactions processed, the cost alone has EXPLODED. To the extent that miners sometimes earn more in fees than in block rewards (so a total of $353,000).
(No wonder they love it!).
Which brings us to the brewing war.
Some people on the Bitcoin developer team don’t want these ‘junk coins’ slowing down Bitcoin…
So they are trying to rally support to scrap the functionality all together.
(It’s the nuclear approach).
This would do two things:
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Essentially nullify the 5 million Bitcoin NFTs and $1 billion worth of BTC meme coins.
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Massively reduce the cost per transaction on the Bitcoin network.
Will they be able to convince the rest of the BTC community to put the meme coin/NFT genie back in the bottle?
No idea! But we suggest they consult Kristina.
