Too much of a good thing… Ordinals are having a moment. Launched early this year, the NFT-like “inscriptions” let owners store and trade photos, videos, and (yes) ape jpegs directly on the bitcoin blockchain. They’re wildly popular, with 1.2M+ new ordinals made just last weekend. And last week trading volume hit $305M+, more than triple the NFT trading volume on ethereum and solana over the same period. But that popularity comes at a cost:
Pay to play: Bitcoin transaction fees skyrocketed to $37 on Sunday (up from $1 to $2 in September), a high not seen since April 2021.
All queued up: Ordinals are contributing to blockchain congestion, with 300K+ transactions stuck waiting to confirm over the weekend.
Toll booths welcome traffic… While everyday crypto traders may gripe about climbing fees, for bitcoin miners the spike couldn’t come at a better time. That’s because companies like Riot Platforms, Marathon Digital, and Hut 8 are staring down the barrel of this coming spring’s bitcoin halving, when once every four years the amount of BTC miners get for mining a block is cut in half. Now, ordinal-driven transaction fees are swooping in to boost bottom lines: Q4 mining revenue is already up 60% to $2.5B.
Stumbling blocks can help build a foundation… The long-term viability of bitcoin is tied to the fortunes of miners. And while transaction fees bumped by ordinals could serve as an impediment to crypto adoption (picture: a $37 fee to buy a latte), they also incentivize miners to validate transactions. Now, as fees go up, publicly traded miners are seeing their stocks pop. Still, some critics say ordinals are “spamming the blockchain” and should be banned.