NFT
According to a report from Grayscale Bitcoin Trust (GBTC), the largest institutional crypto fund, a new non-fungible token (NFT) called Ordinals is rapidly gaining popularity on the Bitcoin network.
In the report, GBTC described Ordinals as unique digital assets created by linking 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, with over a million inscriptions as of 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 is a departure from the conventional peer-to-peer electronic money system, it has been widely criticized by those who decry them. Concerns include deviating from Bitcoin’s initially conceived purpose, blockchain bloat, and compromising fungibility.
However, Grayscale argued that Ordinals are a by-product of using the Bitcoin blockchain as it exists today and the subsequent crypto innovations that have come since, even though they were not initially envisioned by Bitcoin’s creator.
Despite widespread criticism, the institutional crypto fund believes that Ordinals favor the Bitcoin network in two ways. It said Ordinals have increased the total fees paid to miners, which could establish a sustainable base level of transaction fees to incentivize miners.
Second, 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.
