Jack Kubinec

Taproot Wizards, the bitcoin ordinals startup that announced a $7.5 million round led by Standard Crypto last week, is bringing on the pseudonymous developer Rijndael as its chief technology officer.



Co-founded by Udi Wertheimer and Eric Wall, Taproot Wizards is a generative art collection inscribed with bitcoin ordinals, a recent add-on to the network that lets data be inscribed as NFTs and other digital collectibles.&nbsp;



Bitcoin ordinals have seen a November spike in popularity, spurring nearly $30 million in transaction <a href="https://app.blockworksresearch.com/assets/btc/analytics?tags=btc">fees</a> since Nov. 4, per Blockworks Research. Largely due to blockspace demand created by ordinals, bitcoin transaction fees have become more expensive than Ethereum’s for the first time in three <a href="https://x.com/laurashin/status/1726467957180559467?s=20">years</a>.



Read more: <a href="https://blockworks.co/news/bitcoin-ordinals-ethereum-flippening">Ethereum won’t flip Bitcoin anytime soon, but Ordinals could change that</a>



Before coming to Taproot Wizards, Rijndael <a href="https://x.com/rot13maxi/status/1727357668778529204?s=20">says</a> he worked as the technical lead at Amazon’s NFT project and more recently on Bitkey’s self-custody wallet.&nbsp;



In an X thread announcing the career move, Rijndael <a href="https://x.com/rot13maxi/status/1727357689804509521?s=20">lamented</a> the inability for “less-dogmatic Bitcoiners” to take part in the bitcoin community “without picking up a very particular set of puritan values.”



“The <a href="https://blockworks.co/tag/ordinals">Ordinals</a> ecosystem has a real opportunity to expand what we think of as Bitcoin culture, and give more kinds of people an opportunity to connect with a Bitcoin that they can relate to,” Rijndael <a href="https://x.com/rot13maxi/status/1727357691457343953?s=20">wrote</a>. 



Read more: <a href="https://blockworks.co/news/avalanche-ordinals-asc20-transaction-record">Avalanche gets the ‘Ordinals’ bump, sets new transaction record</a>



The incoming CTO also <a href="https://x.com/rot13maxi/status/1727357792984641645?s=20">said</a> he’s looking to hire a full-stack engineer.



Taproot Wizards plans to mint 2,121 of its <a href="https://blockworks.co/tag/nfts">NFTs</a>, which are variations of a Microsoft Paint drawing of a wizard <a href="https://www.reddit.com/r/ads/comments/1q1h40/magic_internet_money/">posted</a> to Reddit to promote bitcoin a decade ago.



Generative NFT projects like Taproot Wizards have been among crypto’s most successful to date. Bored Apes and CryptoPunks <a href="https://www.cryptoslam.io/">are</a> the second and third-highest selling NFT collections ever, according to CryptoSlam, with both being stored on the <a href="https://blockworks.co/tag/ethereum">Ethereum</a> blockchain.



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Bitcoin ordinals startup Taproot Wizards hires CTO after seed raise

Bessie Liu

A new brand of crypto collectibles — similar to Bitcoin <a href="https://blockworks.co/news/bitcoin-ordinals-ethereum-flippening">Ordinals</a> — has apparently hit Avalanche, and it’s responsible for more than <a href="https://app.blockworksresearch.com/analytics?search-field=asc-20">95%</a> of its daily on-chain transactions.



The transaction count on Avalanche’s C-Chain (responsible for handling smart contracts) over the past week has set new all-time highs, reaching an estimated <a href="https://app.blockworksresearch.com/analytics?category=avax">2.3 million</a> transactions per day on November 19. Avalanche has historically seen around 450 thousand per day on average.



Like Bitcoin Ordinals, Avalanche&#8217;s &#8220;ASC-20&#8221; tokens use inscription to put information onto a blockchain, Jacob Everly, a technical product manager at Ava Lab, told Blockworks.&nbsp;



“Bitcoin Ordinals involves assigning numbers to Satoshis (sats), which are stored in the witness portion of the Bitcoin transaction. With ASC-20s, the user transcribes information within the Call-Data of a transaction so that information is stored on-chain for a reduced cost compared to the ERC-20 token standard,” Everly said, referring to Ethereum-based tokens.



“The surge in ASC-20s led to the Avalanche Primary Network, which consists of over ~1500 consensus-participating validators, to average 40-plus transactions per second and even approach 100 per second at some moments,” Everly noted.&nbsp;



The block time-to-finality has, however, held firm at roughly one second, Everly added. “Average gas price hovered around 80 nAVAX, resulting in a rough average cost of $0.05 per ASC-20 transaction,” he said.



According to Blockworks Research analyst Dan Smith, there have been over 6.8 million transactions that have interacted with ASC-20 tokens so far.



Still, it appears too early for ASC-20s to be actively traded, as there doesn&#8217;t seem to be any specialized marketplaces as yet (there&#8217;s also no handy portal to view what has been minted). The number of individual users responsible for all the transactions is also unclear. 



Despite the significant jump in transaction count, daily average transaction fees and unique active addresses <a href="https://app.blockworksresearch.com/analytics?category=avax">remain unchanged</a>, Blockworks Research data shows.



In any case, Avalanche is not the only network aside from Bitcoin seeing activity spikes due to inscription minting.



Polygon’s PoS chain also saw similar <a href="https://app.blockworksresearch.com/analytics?category=matic">activity</a> last week , and just like Avalanche, transaction fees and daily unique addresses have remained relatively stable so far.



Litecoin and <a href="https://blockworks.co/news/dogecoin-flips-ethereum-transaction-count">Dogecoin</a> also had their turn earlier this year.



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Avalanche gets the ‘Ordinals’ bump, sets new  transaction record

David Canellis

Bitcoin block space looks set to be the hottest commodity in crypto.



Bitcoin once again occupies more than half the entire crypto market, having outperformed ether by nearly double so far in 2023. Now, the long-prophesied “flippening” of ether over bitcoin is even further in the future.



The market currently values Bitcoin three times higher than Ethereum. Bitcoin’s market cap, at $727 billion, has swelled by $400 billion in 2023 — a figure bigger than Mastercard’s entire stock valuation and about twice that of Netflix’s.



Ethereum’s valuation has grown by $100 billion, jumping from under $145 billion in January to nearly $245 billion today.&nbsp;



Some anticipate that Ethereum’s market cap will one day eclipse Bitcoin’s, despite the latter’s half-decade head start.&nbsp;



Things were looking good coming out of the 2019 bear market and into 2021’s explosive bull cycle. DeFi summer and NFT mania boosted interest in Ethereum, at times driving up fees for certain actions beyond $250.



<ul>
<li><a href="https://blockworks.co/tag/bitcoin">Bitcoin</a>&#8216;s market value was 925% of <a href="https://blockworks.co/tag/ethereum">Ethereum&#8217;s</a> — $130 billion to $14 billion — at the end of 2019 (bottom of the bear market).</li>



<li>That figure had shrunk to under 200% by the end of 2021 (peak bull market).</li>



<li>Bitcoin&#8217;s market value is now 300% of Ethereum&#8217;s.</li>
</ul>



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/15819231/embed#?secret=7P1yBenbDx" data-secret="7P1yBenbDx" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">The Bitcoin rally has widened the gap</figcaption></figure>



The case for flippening has recently taken a hit by a different flip: The Bitcoin network now rakes in more fees than Ethereum for the first time since December 2020.



Over the past four days, Bitcoin users have paid miners about $40 million to have their transactions processed.&nbsp;



Ethereum users, meanwhile, forked out less than $27 million ether (most of those fees have been burned, slightly reducing Ethereum’s overall supply).



Layer-2 Ethereum networks <a href="https://blockworks.co/tag/arbitrum">Arbitrum</a> and <a href="https://blockworks.co/tag/optimism">Optimism</a> haven’t bridged that gap as they each generate less than $200,000 in fees per day right now.



The fee-flippening (flee-pening?) is awkward when you consider the sheer amount of use cases supported by Ethereum. Decentralized exchanges, DAOs, memecoins, NFTs, stablecoins, DeFi and GameFi all run atop Ethereum.



Read more: <a href="https://blockworks.co/news/ethereum-bitcoin-merge">Ethereum’s Justin Drake is unconcerned despite ether’s middling year pricewise: Q&amp;A</a>



Bitcoin, on the other hand, had for the longest time mostly had one application — bitcoin transactions. But the rate of on-chain transactions had until recently sustained very little growth since 2015. Perhaps due to its “digital gold” narrative and the rising ubiquity of alternative cryptocurrencies.&nbsp;



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/15816806/embed#?secret=ANeyQ4Cjzu" data-secret="ANeyQ4Cjzu" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Over the past five years, Ethereum users have paid $17 billion in fees, Bitcoin users just $2.9 billion</figcaption></figure>



All that changed with Ordinals — a protocol for inscribing individual units of bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) with unique data to create digital collectibles, first launched in January.



Music, text, art, video and <a href="https://blockworks.co/news/play-doom-bitcoin">even code for browser-based</a> DOOM clones have since been inscribed to Bitcoin, resulting in an on-chain collectibles market worth thousands of BTC. Bitcoin users trade Ordinals as Ethereum or Solana users would trade NFTs.



Today, anywhere from around a third to one half of Bitcoin transactions contain Ordinals, driving up demand for blockspace as well as transaction fees. At times today, “medium priority” <a href="https://mempool.space/">transactions</a> went for around $11 compared to around $2.30 for the <a href="https://etherscan.io/gastracker">same</a> on Ethereum (more priority generally means faster processing), although those prices have since come down.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/15818011/embed#?secret=CUyCOwRuzE" data-secret="CUyCOwRuzE" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Tron comes in third overall for monthly fees, mostly thanks to stablecoin Tether</figcaption></figure>



So is Bitcoin netting more fees than Ethereum good for Bitcoin? Maybe not.&nbsp;



Some Bitcoin insiders <a href="https://blockworks.co/news/play-doom-bitcoin">worry</a> the network isn’t properly equipped to handle Ordinals and potential influxes of interest in its original use case, BTC payments.



The CryptoKitties incident in December 2017 — during which a NFT game grew so popular that it spectacularly <a href="https://consensys.io/blog/the-inside-story-of-the-cryptokitties-congestion-crisis">clogged</a> Ethereum — first showed that Ethereum probably couldn’t handle serving as the “<a href="https://www.youtube.com/watch?v=j23HnORQXvs">World Computer</a>” just yet.



Then, the 2021 bull market saw NFT mint costs soar to $250 at <a href="https://www.coindesk.com/tech/2021/11/22/ethereums-fees-are-too-damn-high/">times</a> — a reminder of how necessary it was to port activity to smaller chains, including rollups. Still, <a href="https://blockworks.co/news/pepe-memecoin-red-flags-abound">memecoins and low quality token projects</a> ratcheted up fees beyond $20 earlier this year, drastically reducing Ethereum’s <a href="https://blockworks.co/news/ethereum-deflationary-model">usefulness for non-critical tasks</a>.



The NFT craze of 2021 made Ethereum block space the hottest commodity in crypto. Even while tanking its utility.&nbsp;



Ordinals may end up having the same effect on Bitcoin, especially if demand keeps up and the bull market truly hits.



At that point, it would seem reasonable to value Bitcoin and Ethereum more similarly. It might just take another run.



Updated Nov. 16, 2023 at 4:25 pm ET: Corrected reference to percentages in bullet points.



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Ethereum won’t flip Bitcoin anytime soon, but Ordinals could change that

The second installment of The Rise of Blus, an animated movie being funded in chunks by the Nouns DAO, released Wednesday.&nbsp;



Produced by crypto-native animation studio Atrium, the movie’s $3 million budget is contingent on a string of governance proposals passing. In contrast to the film industry’s black box status quo, the studio’s founder Supriyo Roy periodically <a href="https://www.propdates.wtf/prop/317">publishes</a> on-chain updates regarding the film’s progress and how funds are being spent. <a href="https://drive.google.com/file/d/1gdInCNXaLvKA5Vrxe6aCTiOtE67jNpG6/view">Scripts</a> have also been made public ahead of the releases.&nbsp;



Several of the movie’s producers worked on Spider-Man: Into the Spider-Verse, Roy told Blockworks, giving the Nouns movie’s animation a similar flavor to the Marvel hit.&nbsp;



The Rise of Blus has a crew of 45 people and an estimated final budget of $2.78 million, Roy said. For context, the recent Teenage Mutant Ninja Turtles animated movie <a href="https://deadline.com/2023/08/teenage-mutant-ninja-turtles-mutant-mayhem-box-office-1235453107/">cost</a> $70 million to produce.&nbsp;



Five of the <a href="https://www.youtube.com/watch?v=tWETBcBsxPA">movie’s</a> eight chapters have been funded, and the next three episodes, running around 10 to 11 minutes each, will be <a href="https://houseofnouns.wtf/nouns/proposals/425">released</a> over the next eight months or so. If completed, the full movie will run around 80 minutes, Roy said.&nbsp;



The Rise of Blus follows a boy named Gi who lives in the floating city of Blus and wants to be an adventuresome “rover” rather than follow his father in becoming a boring “recycler” when he grows up. The Nouns NFTs’ signature “Noggles” feature prominently in the movie. Roy said the movie’s main conceit is the glasses providing freedom of choice.&nbsp;



While never mentioning NFTs or crypto, the movie seemingly pays homage to its origins. The second installment introduces viewers to an apparently important fictional substance named ether — which is also the name of the currency used to auction Nouns.&nbsp;



Read more: <a href="https://blockworks.co/news/nouns-fork-two-dao-treasuries-spending">Nouns DAO is forking again</a>



But Maria Shen, general partner at Atrium investor Electric Capital, said crypto may not matter much to the animators being funded by the DAO’s treasury.&nbsp;



“Frankly, alright, I don&#8217;t think any of them have a special affiliation with crypto,” Shen said. “They&#8217;re actually here because it&#8217;s an alternative way for them to have a revenue source and artistic freedom that they otherwise wouldn&#8217;t have…it&#8217;s really about what are the new use cases that crypto can enable? And this is very clearly one of them.”



<h2 class="wp-block-heading">Web3 games migrate networks in record numbers</h2>



65 Web3 games changed networks so far this year, up from 48 last year and 12 the year before, according to Game7’s “State of Web3 Gaming” <a href="https://research.game7.io/state-of-web3-gaming-2023">report</a>.



Leading destinations for games were layer-2s Polygon, Immutable and Arbitrum. 73% of games that changed networks this year chose an Ethereum virtual machine (EVM)-based chain, the report said.



The RPG “Champions Ascension” moved from Ethereum to Polygon in May, <a href="https://x.com/ChampionsIO/status/1656256600405934081?s=20">promising</a> an end to “bloated gas fees.”&nbsp;



<h2 class="wp-block-heading">One interesting stat:</h2>



<ul>
<li>Bitcoin ordinals, a protocol that enables NFT storage on bitcoin, <a href="https://app.blockworksresearch.com/analytics?category=btc">generated</a> over $4 million in transaction fees Thursday, according to Blockworks Research. Daily ordinal fees were in the $10,000 to $20,000 range for much of October.</li>
</ul>



<h2 class="wp-block-heading">Also of note:</h2>



<ul>
<li>Disney partnered with Dapper Labs to release collectible pins for Disney characters as NFTs. Notably, the product’s <a href="https://www.dapperlabs.com/newsroom/dapper-labs-announces-disney-pinnacle">marketing</a> shied away from using the term “NFT” to describe the pins.</li>



<li>SocialFi platform Friend.tech released a global <a href="https://www.friend.tech/account">feed</a> where users vote to rank posts. Votes are <a href="https://x.com/confugen/status/1725450313102983389?s=20">allocated</a> to users based on key prices.</li>



<li>Lens Protocol released V2 of its decentralized social infrastructure. It teased Smart Posts where content can be directly monetized — like a payment pop-up on blog posts, <a href="https://twitter.com/LensProtocol/status/1724064920139133146">for instance</a>.</li>
</ul>



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Web3 Watch: Nouns DAO-funded movie releases second installment

Sebastian Sinclair

Casey Rodarmor, inventor of Bitcoin Ordinals, has proposed a new system for creating digital assets on the Bitcoin network, in a bid to offer a cleaner version to the current BRC-20 standard.



In a recent <a href="https://rodarmor.com/blog/runes/">blog post</a>, Rodarmor pointed out that BRC-20, while popular, leads to the unnecessary proliferation of “junk” UTXOs (Unspent Transaction Outputs), an issue he proposes to address with &#8220;Runes.&#8221;



Ordinal Theory, first introduced in January, is a technique that assigns numerical identifiers to &#8220;sats,&#8221; the smallest unit of bitcoin. The method utilizes a First-In-First-Out algorithm meaning the first sat recorded is the first one to be utilized or processed.



It paved the way for inscriptions — essentially Bitcoin NFTs — that skyrocketed in popularity in April, rising from 1.2 million to today’s 34.7 million units, according to the latest figures from a <a href="https://dune.com/dgtl_assets/bitcoin-ordinals-analysis">Dune dashboard</a>.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Should bitcoin have fungible tokens? On the one hand, fungible tokens are 99.99% bullshit and scams, and weaken bitcoin&#39;s purity. On the other hand, they would bring an enormous amount of fee revenue, developers, and users to bitcoin. People fucking love tokens, they&#39;re like the…&mdash; Casey (@rodarmor) <a href="https://twitter.com/rodarmor/status/1706214717558272163?ref_src=twsrc%5Etfw">September 25, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Inscriptions have been criticized for increasing the complexity and cost of transacting on the Bitcoin network, and leading to <a href="https://blockworks.co/news/who-broke-bitcoin-ordinals">unintended consequences</a>.



The main problem, according to Rodarmor, is that this clutter complicates the system and makes it less efficient, leading to higher costs. Runes aim to simplify how fungible tokens can be issued, transferred and burned within the Bitcoin ecosystem.



Specifically, balances would be held by UTXOs, which can contain varying amounts of any number of runes. A transaction would also contain a protocol message if it has an output with a specific script, allowing for easy identification of transactions.



“Should such a thing exist? I don&#8217;t know. It&#8217;s about as simple as possible, does not rely on off-chain data, does not have a native token and fits nicely into Bitcoin&#8217;s native UTXO model,” Rodarmor mused.



The approach, Rodarmor said, could attract users and developers from systems with less efficient on-chain operations, thereby boosting Bitcoin&#8217;s popularity and encouraging broader adoption.



“On the other hand, the world of fungible tokens is a near totally irredeemable pit of deceit and avarice, so it might be a wash,” he said.



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Bitcoin Ordinals creator wants to clean up BRC-20 standard

James Cirrone

Yuga Labs, the studio behind the Bored Ape Yacht Club, is trying to generate interest in bitcoin ordinals once again.&nbsp;



The NFT creator <a href="https://twitter.com/yugalabs/status/1699060451534045404">announced</a> Tuesday a 13-week cipher puzzle series based on its TwelveFold bitcoin NFT collection. Twelvefold is a 300-piece generative art collection that uses a 12&#215;12 grid and was released back in February.



For the first 12 weeks, a Moon Puzzle will be released once every week. The prize for correctly solving one of them is 0.12 BTC (a little over $3,000). 



Read more:<a href="https://blockworks.co/news/yuga-labs-nft-collection-bitcoin-ordinals"> Yuga Labs debuts first NFT collection on bitcoin</a>



On the thirteenth week, the last puzzle will be dropped, and the fastest to solve it will be awarded with a yet unspecified Twelvefold ordinal.



All answer submissions will be inscribed on satoshis, Bitcoin’s smallest unit of account, for a fee of $4 to $8 depending on network traffic, according to <a href="https://blockworks.co/tag/yuga-labs">Yuga Labs</a>. Additionally, users will need a bitcoin ordinals wallet to participate.



“There can only be 1 winner per puzzle. If two people submit the right answer in the same Bitcoin block, we’ll accept the answer with the lower inscription number. Winners will be notified by email,” Yuga Labs explained in a thread on X, formerly Twitter.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">The first correct answer that gets inscribed is the puzzle winner. There can only be 1 winner per puzzle. If two people submit the right answer in the same Bitcoin block, we’ll accept the answer with the lower inscription number. Winners will be notified by email.&mdash; Yuga Labs (@yugalabs) <a href="https://twitter.com/yugalabs/status/1699060451534045404?ref_src=twsrc%5Etfw">September 5, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The first puzzle has already been solved, according to the <a href="https://twelvefold.io/puzzle/1">website</a>. It featured six images of what were seemingly Twelvefold ordinals with the clue: “Having two together during hibernation can make all the difference.”&nbsp;



One user apparently solved it, saying the answer was “Jigsaw.”



This person deduced the supposed answer by first noticing that each of the six images merged two ordinals, with one being much blurrier than the other. So they subtracted the edition numbers of each ordinal to find the difference, a concept which was alluded to in the hint.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">I solved <a href="https://twitter.com/yugalabs?ref_src=twsrc%5Etfw">@yugalabs</a>&#39;s first TwelveFold cipher puzzle. (Sadly, I didn&#39;t submit my answer in time.) Either way, here&#39;s the answer — and why. 🧵👇 [1/11] <a href="https://t.co/aXtvVjqYDL">https://t.co/aXtvVjqYDL</a>&mdash; subvert ✍🏻 (@subvert_nft) <a href="https://twitter.com/subvert_nft/status/1699091418126717014?ref_src=twsrc%5Etfw">September 5, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The numbers this user got, when matched up with the letters of the alphabet, spelled “Jigsaw.”&nbsp;



Blockworks reached out to Yuga Labs to ask if “Jigsaw” was indeed the answer to the first puzzle but didn’t receive an immediate response.&nbsp;



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Yuga Labs offers bitcoin prizes to solve ordinal puzzles

Didar Bekbauov

In the past month, the crypto community has been going wild over Ordinals, a protocol that enables users to mint NFT-like assets called inscriptions directly onto Bitcoin.&nbsp;



With nearly 12 million inscriptions now created on top of the BTC blockchain, the hype around this new tech has led to a surge in demand for computing power. As the latter is required to validate transactions in the Bitcoin network, this sudden increase in demand has significantly raised transaction fees as miners compete for available resources.&nbsp;



Some experts have spoken out against Ordinals, emphasizing the protocol’s vulnerability to scams and issues with slower speeds. But I maintain that this network overload will likely be transitory, and viable layer-2 protocols will emerge to improve transaction speeds and security.&nbsp;



I’m strongly in favor of Ordinals, regardless of any temporary issues currently at hand — because I believe they will have a net positive effect on the profitability of BTC mining in the long run, especially considering the upcoming 2024 halving.&nbsp;



New testing opportunities for Bitcoin applications are an innately worthy trend, adding more meaning to the cryptocurrency in the grand scheme of things.



<h2 class="wp-block-heading">Raising the stakes for bitcoin mining</h2>



As a Bitcoin ideologist, I see why so many users are attracted to Ordinals. It&#8217;s safe to say that Bitcoin has one of the most powerful brands in the crypto industry. BTC is still the largest cryptocurrency by market capitalization, and Bitcoin has the most extensive history among all blockchains. It’s a big deal that it finally became possible to launch NFT-like assets on the network.



For miners like myself, the rising popularity of Ordinals has been more than welcome news. With Bitcoin&#8217;s scalability limited to around seven transactions per second (TPS), a sudden increase in demand for computing power often translates to higher fees. As each halving reduces block rewards (validators&#8217; primary source of revenue) by 50% every four years, this shift in profitability away from rewards is something that should be welcomed by many miners.



<h2 class="wp-block-heading">Why 2017 has little to do with 2023</h2>



For a long time, the 2017 bull market was the last time Bitcoin transaction fees surpassed block rewards for miners. This changed in May 2023, when multiple mining pools mined blocks where fees exceeded the 6.25 BTC block subsidy.



But don’t you worry that 2017 has much in common with the 2023 situation.&nbsp;



Six years ago, Bitcoin transaction fees were higher than block subsidies due to the overall crypto market hype and massive bull run, which significantly increased demand for regular transfers. Since then, several improvements have been made to the Bitcoin protocol to enhance its TPS capacities, such as SegWit, transaction batching and intra-exchange transactions.



Read more from our opinion section: <a href="https://blockworks.co/news/decentralization-zero-sum-game" target="_blank" rel="noreferrer noopener">Decentralization is a zero-sum game</a>



Now, for the second time in history, we see that miners are not fully dependent on block rewards. Most importantly, the current period of high transaction fees changed the perception of the sustainability of bitcoin mining. Practically speaking, I see that transaction fees will most likely become the main source of revenue in the future&#8217;s mining industry. And as Bitcoin&#8217;s adoption and usability increase, miners are expected to earn more from commissions than via block rewards.



<h2 class="wp-block-heading">Bitcoin miners learn to adapt&nbsp;</h2>



The hype around Bitcoin Ordinals came with a number of changes, and we, bitcoin miners, will need to adapt to remain profitable. We need to upgrade our mining infrastructure and software and optimize energy efficiency to address the challenge of reduced block rewards.



I expect that more applications will be written on top of the Bitcoin protocol now that Ordinals have paved the way, and we will see more use cases and a greater boost in Bitcoin adoption in the next couple of years.&nbsp;



Regardless of the concerns raised with how Ordinals as a technology exists now, I still believe that experimenting with the Bitcoin network’s capabilities can only help support the overall ecosystem, both now and in the future.



<hr class="wp-block-separator has-alpha-channel-opacity"/>


<div class="wp-block-post-author-biography">Didar Bekbauov is the founder and CEO of Bitcoin group mining company Xive. He is an entrepreneur with 10 years of leadership experience and a Bitcoin miner. Bekbauov has a strong financial background attaining a UK Master’s degree in Financial Management. He also acts as a mentor at the Founder Institute startup accelerator program in Houston, Texas.</div>


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Ordinals deserve a red carpet welcome

Bitcoin Ordinals have received fresh utility with the introduction of a new token standard aimed at facilitating the migration of Ethereum-based NFTs onto Bitcoin.



Dubbed BRC-721E, the new standard permits the transformation of Ethereum&#8217;s ERC-721 NFTs into Ordinals — which allow for text, images and code to be “inscribed” on a single satoshi.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Time for a brand new protocol. 👉 Permissionless bridging from ETH to BTC 👉 Instantly listed on marketplaces once inscribed 👉 Cost efficient for large collections 👉 From the minds of <a href="https://twitter.com/OrdinalsMarket_?ref_src=twsrc%5Etfw">@OrdinalsMarket_</a> and <a href="https://twitter.com/BitcoinMiladys?ref_src=twsrc%5Etfw">@BitcoinMiladys</a> Introducing BRC-721E 🥝🧵 <a href="https://t.co/J50MagEVi3">pic.twitter.com/J50MagEVi3</a>&mdash; kiwidream.eth (@kiwi_dream) <a href="https://twitter.com/kiwi_dream/status/1663266009841811457?ref_src=twsrc%5Etfw">May 29, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



In other words, users can send their favorite digital collectibles straight to Bitcoin from Ethereum by initiating a bridging contract acting as a single on-chain inscription request.



BRC-721E is a collaboration between NFT collection Milady Maker and Ordinals Market — a marketplace dedicated to the buying and selling of Ordinals.



The process involves transferring a user’s NFT to a burn address, effectively rendering their NFT unusable on Ethereum thereafter. Once burned, users can inscribe valid BRC-721E data onto Bitcoin.



The burn process prompts an on-chain inscription request where Ethereum transaction data is then parsed to find and record any uninscribed burns, according to the marketplace’s <a href="https://ordinals.market/brc-721e">webpage</a>.



After a successful burn and inscription, the migrated NFT appears on the Ordinals Market collection page with its accompanying metadata.



While the BRC-721E standard does not initially store metadata directly on the Bitcoin network, it does have the capacity for this to change and evolve over time, the creators said.



Still, the point regarding the NFTs provenance is an important one. As such, Milady Maker and Ordinals Market offer solutions while the protocol adapts.



According to the creators that involves either:



<ul>
<li>Preserving a less detailed version of the image directly on the blockchain, and incorporating a link to the original Ethereum token within the primary image data</li>



<li>Employing a combined structure of BRC-721 and BRC-721E to provide on-chain information, complete with evidence of the asset&#8217;s &#8216;burning&#8217; or transfer process</li>



<li>Preserving data with multiple components directly on the blockchain, where one of these components is a valid BRC-721E JSON format data</li>



<li>Leveraging established methods like &#8216;teleburn&#8217;, which requires users to record information beforehand and direct it to an unconventional &#8216;burn&#8217; address</li>
</ul>



In other words, these strategies suggest ways to embed lower-quality images and key information about digital items on Bitcoin&#8217;s public ledger, attempting to shore up their accessibility and visibility while preserving a link to their original details.



BRC-721E’s execution follows the launch of the Ordinal Inscriptions protocol on Jan. 21, amid fanfare, that sought to introduce digital art use cases for the first time to the aging Bitcoin network.



The approach has been well-received so far. Earlier this month, the Bitcoin network hit a record by processing the <a href="https://blockworks.co/news/bitcoin-transactions-record-ordinals">highest number of transactions</a> in a single day, largely due to Ordinals.



Others still are attempting to emulate that success across different blockchains.



Last week, the Interchain Foundation in collaboration with blockchain development company Bianjie introduced the <a href="https://blockworks.co/news/interoperable-nft-standard-cosmos">ICS-721 NFT token standard</a> on Cosmos. The hope is that the application will enhance interoperability across chains without the need for a bridge.



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Transfer Your Ethereum NFTs to Bitcoin With New Token Standard

OKX will be debuting a marketplace within its wallet that supports minting trading Bitcoin Ordinals across over 60 supported chains by June.&nbsp;



Right now, users can only view and transfer their Ordinals in OKX’s wallet, but this week, they’ll be able to trade BRC-20 tokens. By late May, customers will be able to mint Ordinals and BRC-20 tokens within the wallet. 



And by June, the ability to trade Ordinals will come to the OKX platform. That follows Binance plans <a href="https://blockworks.co/news/bitcoin-ordinals-nfts-binance">to add Bitcoin NFT compatibility to its marketplace</a>. 



OKX Chief of Innovation Jason Lau told Blockworks that his company is “bullish” on Bitcoin and Ordinals.&nbsp;



“What we&#8217;re really excited to see is this new energy around expanding the use cases of Bitcoin [and] expanding the design space that allows developers and users to start to tinker and do more with Bitcoin,” Lau said.&nbsp;



There are hurdles to adoption, though, because Ordinals and BRC-20 tokens are a new way to transact, Lau said. Accessibility and ease of use are things OKX is trying to tackle.



In a bid to make things less complicated for current traders of Ordinals, Lau told Blockworks that OKX partnered with open source Bitcoin wallet UniSat to sync up their respective indexers.&nbsp;



“We&#8217;re working with that community to make sure that there&#8217;s no conflict between how we recognize these Ordinals and how we recognize these BRC-20 transactions on top of the blockchain,” Lau said.&nbsp;



Another potential headache for OKX is how to deal with the cyclical nature of crypto and NFTs. It’s hard to predict when people will be interested in trading, so there’s often a boom and a bust. 



Currently, NFT daily trading volumes have come way down since this year’s peak in late February. More specifically, the daily trading volume for Ordinals skyrocketed in early May, topping at over $15 million on May 8. 



<a href="https://blockworks.co/news/bitcoin-transactions-record-ordinals">Bitcoin even broke transactions records</a> set way back in the bull run of 2017 thanks to Ordinals. Since then, the numbers have come back down to reality.&nbsp;



“The highs are high and the lows are low…if people aren&#8217;t keen on NFTs today, that&#8217;s okay. There&#8217;s other things for them to do, even if they&#8217;re just managing and safely storing their assets,” Lau said.



He continued, “We are taking a very long term approach to this. We believe that users will ultimately not only be playing with NFTs but they&#8217;ll be doing it across multiple chains.”



Additionally, the Seychelles-based crypto exchange will soon support the Bitcoin Lightning Network on the OKX Wallet. Previously, Lightning was only supported on the exchange.



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OKX to Offer Ordinals Trading Within its Wallet by June

Binance will support Bitcoin <a href="https://blockworks.co/tag/ordinals" target="_blank" rel="noreferrer noopener">Ordinals</a> — akin to NFTs on Ethereum — on its NFT marketplace beginning in late May 2023.



This means that Binance users will no longer need a separate Bitcoin wallet that supports Ordinals inscriptions, making transactions quite a bit easier.&nbsp;



“Binance users will also be able to purchase and trade Bitcoin NFTs directly with their Binance accounts,” a statement from Binance said. “This integration offers even more seamless and efficient trading for Binance users.”&nbsp;



The largest centralized crypto exchange also said it would be offering Bitcoin NFT creators “royalty support” and additional ways to generate revenue.&nbsp;



Mayur Kamat, Head of Product at Binance, told Blockworks that it&#8217;s too early to tell how transformational bringing Ordinals to the NFT platform will be, but “time will tell.”



“Since the beginning, everyone has wondered about Bitcoin use outside of [an] inflation hedge or [a] store of value. Not only has it shown massive value, but we are now seeing that the network can aspire to be more,” Kamat said.



Ordinals <a href="https://blockworks.co/news/cant-ignore-bitcoin-nfts">launched in January</a>, allowing users to “inscribe” text, audio, art or even <a href="https://blockworks.co/news/play-doom-bitcoin">video games </a>into individual satoshis, BTC’s smallest unit. They reside entirely on the blockchain.&nbsp;&nbsp;



This news of Binance’s integration of Ordinals comes after a rush of Ordinals inscriptions contributed to Bitcoin <a href="https://blockworks.co/news/bitcoin-transactions-record-ordinals">processing the highest number of transactions</a> in its 14-year history on May 1, 2023, <a href="https://dune.com/dgtl_assets/bitcoin-ordinals-analysis" target="_blank" rel="noreferrer noopener">on-chain data</a> shows.



More generally, Bitcoin transactions are breaking all-time records — there were <a href="https://blockworks.co/news/binance-bitcoin-withdrawals">444,000 unconfirmed transactions</a> sitting in the <a href="https://www.blockworksresearch.com/glossary#mempool" target="_blank" rel="noreferrer noopener">mempool</a> Monday morning. 



This surge in transactions and the skyrocketing fees were the reasons Binance gave for temporarily halting bitcoin withdrawals on Sunday. The company said it would adjust its fees to “prevent a similar recurrence in the future,” and flirted with a possible integration of the Bitcoin Lightning Network to speed up transactions.



<a href="https://twitter.com/binance/status/1655380303383261185" target="_blank" rel="noreferrer noopener">https://twitter.com/binance/status/1655380303383261185</a>



<a href="https://blockworks.co/news/binance-to-launch-nft-marketplace-in-june">Binance NFT</a> already added support for the Polygon POS network in March 2023 and the Ethereum network in October 2021.



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Bitcoin Ordinals NFTs Coming to Binance in Late May

Shalini Nagarajan

Binance has boosted BTC withdrawal fees in response to a significant backlog of pending transactions on the Bitcoin blockchain.



The top crypto exchange by trade volume had for about an hour suspended bitcoin withdrawals early Sunday morning, and had suspended them a second time throughout the day.



Binance increased its bitcoin withdrawal fees from 00002 BTC ($5.59) to 0.001 BTC ($27.94) per withdrawal, a spokesperson told Blockworks.



&#8220;Due to an increase in the overall network fee on the Bitcoin network, the operational cost of maintaining withdrawals for BTC also increases,&#8221; they said. 



&#8220;There is a need to increase the withdrawal fee charged on the Binance platform for the Bitcoin network to ensure users’ transactions are picked up by mining pools.&#8221;



Pending bitcoin transactions refer to those submitted by users but yet to be added to the blockchain by the network’s miners.&nbsp;



Unconfirmed transactions sit in the <a href="https://blockworks.co/news/bitcoin-mempool-surges-new-life-for-blockchain" target="_blank" rel="noreferrer noopener">blockchain’s “mempool,”</a> which on Monday morning recorded its highest ever count in its 14-year history at 444,000.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="2856" height="1236" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-08-at-09.30.33.png?w=1024&amp;h=1024" alt="" class="wp-image-54714" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-08-at-09.30.33.png?w=2856 2856w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-08-at-09.30.33.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-08-at-09.30.33.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-08-at-09.30.33.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-08-at-09.30.33.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-08-at-09.30.33.png?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-08-at-09.30.33.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-08-at-09.30.33.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-08-at-09.30.33.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-08-at-09.30.33.png?w=80 80w" sizes="(max-width: 2856px) 100vw, 2856px" /><figcaption class="wp-element-caption"> Bitcoin has blown past its previous mempool records set during the 2017-2018 bull market (<a href="https://jochen-hoenicke.de/queue/#BTC,all,count" target="_blank" rel="noreferrer noopener">source</a>)</figcaption></figure>



At times like these, when demand for Bitcoin blockspace is competitive, miners will opt to prioritize transactions with higher fees attached. Binance had not accounted for the demand, which led to longer withdrawal times.



The average transaction fee has surged nearly five times since March, reaching its highest point in two years. Data from <a href="https://ycharts.com/indicators/bitcoin_average_transaction_fee?referrer=KM13492686" target="_blank" rel="noreferrer noopener">YCharts</a> shows the current transaction fee has skyrocketed to $19.21, reflecting a staggering 789% jump compared to the same time last year.



An influx of Ordinals inscriptions and BRC-20 mints have been <a href="https://twitter.com/LaurentMT/status/1655206752457981958" target="_blank" rel="noreferrer noopener">attributed</a> to the surge.



Binance said it was also <a href="https://twitter.com/binance/status/1655419624962527233" target="_blank" rel="noreferrer noopener">working</a> to enable bitcoin withdrawals on the Lightning Network, the layer-2 network intended to make transactions faster and cheaper, to help alleviate similar future scenarios.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><a href="https://twitter.com/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$BTC</a> withdrawals are now resumed on <a href="https://twitter.com/hashtag/Binance?src=hash&amp;ref_src=twsrc%5Etfw">#Binance</a>. Thank you for your patience and we apologize for any inconvenience.&mdash; Binance (@binance) <a href="https://twitter.com/binance/status/1655250881997332482?ref_src=twsrc%5Etfw">May 7, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Binance expects to provide another update once all pending transactions have been processed.



As for bitcoin&#8217;s price, it has dropped 3% over the past five days to around $28,000, but still up 70% year to date.



Updated May. 8, 2023 at 6:19 am ET: Added confirmation of Binance&#8217;s new bitcoin withdrawal fees.



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Binance Resumes Bitcoin Withdrawals As Transaction Fees Skyrocket

Macauley Peterson

A pseudonymous Bitcoin and Lightning Network developer going by the name “Supernestnet” was poking around Ordinal Theory — <a href="https://blockworks.co/tag/ordinals">Ordinals</a> for short — on Thursday, when he discovered a bug.



Ordinals are <a href="https://blockworks.co/news/new-bitcoin-ordinals-marketplace">an attempt to make Bitcoin fun again</a>. They allow text, images and code to be “inscribed” on a satoshi — the smallest denomination of bitcoin. Each satoshi has <a href="https://github.com/casey/ord/blob/master/bip.mediawiki">a unique number</a> between 0 and (eventually) 2,100 trillion, assigned in the order in which they are mined. While usually thought of as fungible, the Ordinals protocol makes them non-fungible, like an NFT.



Just as each satoshi is numbered, each Ordinals inscription has a number — there are more than <a href="https://dune.com/dgtl_assets/bitcoin-ordinals-analysis">3.7 million</a> of them to date.



Supernestnet found a way to break inscription numbers, by inscribing a satoshi that he didn’t own. Then, just as he <a href="https://twitter.com/super_testnet/status/1654383946782629888?s=20">inadvertently</a> riffed on the <a href="https://www.holy-bhagavad-gita.org/chapter/11/verse/32">Bhagavad Gita</a>, thinking it was an homage to the film Oppenheimer, he also <a href="https://twitter.com/super_testnet/status/1654212346171064328?s=20">asked</a> rhetorically whether he had “broken” Ordinals.


<div class="wp-block-image">
<figure class="aligncenter size-large"><img decoding="async" loading="lazy" width="1280" height="720" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-5.png?w=1024&amp;h=1024" alt="" class="wp-image-54642" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-5.png?w=1280 1280w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-5.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-5.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-5.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-5.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-5.png?w=464 464w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-5.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/image-5.png?w=80 80w" sizes="(max-width: 1280px) 100vw, 1280px" /><figcaption class="wp-element-caption">Source: https://github.com/supertestnet/breaker-of-jpegs</figcaption></figure></div>


Not so much, according to Danny Diekroeger, founder and CEO at Deezy, who works on infrastructure for the <a href="https://blockworks.co/tag/lightning-network">Lightning Network</a>.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">the legend <a href="https://twitter.com/super_testnet?ref_src=twsrc%5Etfw">@super_testnet</a> has produced the first valiant attack on ordinal inscriptions by inscribing a 0-value transaction, causing joy from hater maxis, and panic from JPG grifters like me but the situation is not as bad as it sounds, here&#39;s my understanding:&mdash; danny ⚡️ deezy (@dannydiekroeger) <a href="https://twitter.com/dannydiekroeger/status/1654259984375615490?ref_src=twsrc%5Etfw">May 4, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



&#8220;Inscription numbers are just a vanity metric putting an order to which inscriptions came first,” he tweeted. “[S]ome collectors like having the 100,000th inscription, for example…these are all messed up now, because [Supertestnet]&#8217;s transaction exposed some logic in the software.”



It was an “edge case” and only provides a new example of a known issue, according to Ordinals advocate, LeonidasNFT. They <a href="https://twitter.com/LeonidasNFT/status/1654281261609877504">said</a> on Twitter, “there has been debate about inscription numbers being off by a lot more than one for almost three months now.”



Plus, it may all have been a <a href="https://twitter.com/dannydiekroeger/status/1654259996937560064?s=20">marketing ploy</a>.



Is it funny? A little. Is it important? Not really.



What is notable is that mean-average transaction fees have increased by just shy of 300% in the past two weeks, according to a Galaxy Research <a href="https://glxy.galaxy.com/weekly-research-brief-tokens-on-bitcoin-spiking-fees-to-2021-highs">note</a> on Friday.



It currently costs between $5 and $6 to get a transaction through the Bitcoin <a href="https://mempool.space/">mempool</a>.



That’s one of the points of Ordinals, as its originator, Casey Rodarmor, <a href="https://github.com/casey/ord/blob/master/bip.mediawiki">noted</a> right off the bat: “Since Bitcoin requires the development of a robust fee market, this is a strong positive of the proposal.”



But the recent bump in transaction fees likely has more to do with the “<a href="https://blockworks.co/news/defi-on-bitcoin">DeFi on Bitcoin</a>” efforts around the BRC-20 token standard, which shares a similar technique with Ordinals but is used differently.



Galaxy Research views this as “a notable development for Bitcoin,” but whether it has any long-term significance remains to be seen. It seems rather like trying to fit a <a href="https://ethresear.ch/t/proposal-change-ether-currency-symbol-from-to/120">diamond</a> peg in a round hole.



But fine: Experiments are <a href="https://blockworks.co/news/defi-on-bitcoin">being run on Bitcoin</a>. Some people think it’s <a href="https://twitter.com/LeonidasNFT/status/1653102966474256384?s=20">fun</a> and <a href="https://twitter.com/ercwl/status/1653508862631084036">good</a> for Bitcoin. Others are <a href="https://twitter.com/mission_bitcoin/status/1654299881215778816?s=20">mad</a>.



Bitcoin continues, as always, just with slightly higher transaction fees.



In any case, Supertestnet has now <a href="https://twitter.com/super_testnet/status/1654518626345537543?s=20">changed</a> their story.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">I did not break ordinals, just crashed the ordinal explorer used by unisat and ordinalswallet (that explorer is now fixed) and uncovered a bug in another that lets you misnumber inscriptions They clarify this in the article but the headline is clickbate h/t <a href="https://twitter.com/udiWertheimer?ref_src=twsrc%5Etfw">@udiWertheimer</a> <a href="https://t.co/ItVFEQiSk8">https://t.co/ItVFEQiSk8</a>&mdash; Super Testnet (@super_testnet) <a href="https://twitter.com/super_testnet/status/1654518626345537543?ref_src=twsrc%5Etfw">May 5, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



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Who ‘Broke’ Bitcoin Ordinals? What Does it Mean?

Bitcoin just processed more transactions in a single day than at any point in its 14-year history — thanks to Ordinals.



The daily <a href="https://bitinfocharts.com/comparison/bitcoin-transactions.html#alltime">number</a> of Bitcoin transactions surged beyond 568,300 on Sunday — nearly 78,000 more than its previous peak during the top of the 2017 bull run.&nbsp;



Over 307,000 of those transactions were Ordinals, the most on a single day ever and a 16% jump on the previous record set on Saturday, per a <a href="https://dune.com/dgtl_assets/bitcoin-ordinals-analysis">Dune dashboard</a>.



That means Ordinals contributed around 54% of Bitcoin’s daily transactions at its all-time record.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1698" height="592" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=1024&amp;h=1024" alt="" class="wp-image-53941" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=1698 1698w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/05/Screen-Shot-2023-05-01-at-12.34.09.png?w=80 80w" sizes="(max-width: 1698px) 100vw, 1698px" /><figcaption class="wp-element-caption">More Bitcoin transactions than ever before (source: <a href="https://blockchair.com/bitcoin/charts/transaction-count" target="_blank" rel="noreferrer noopener">Blockchair</a>)</figcaption></figure>



<a href="https://blockworks.co/news/cant-ignore-bitcoin-nfts" target="_blank" rel="noreferrer noopener">Debuted in January</a>, Ordinals allow data such as audio, art or even <a href="https://blockworks.co/news/play-doom-bitcoin">video games</a>, to be attached (or “inscribed”) to individual satoshis, BTC’s smallest unit.&nbsp;



The result is a unique digital asset in the same vein as an Ethereum-based NFT, for example. Although, the relevant data exists entirely on the Bitcoin blockchain, rather than hosted externally, as is often the case.



More than 2.39 million Ordinals have been inscribed to date, per Glassnode, which said it has seen a “marked character shift” in Bitcoin mempools this year (Bitcoin mempools store unconfirmed bitcoin transactions).



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">We can see a shift in preference as it relates to inscription types. Image Inscriptions 🟧 dominated until very recently, but have been surpassed by text based 🟦. Over 2.39M Inscriptions have been added to the <a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a> ledger, adding 9.3GB in data, and paying 212 <a href="https://twitter.com/search?q=%24BTC&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$BTC</a> in fees. <a href="https://t.co/KZPy074WoP">pic.twitter.com/KZPy074WoP</a>&mdash; glassnode (@glassnode) <a href="https://twitter.com/glassnode/status/1652804155839500288?ref_src=twsrc%5Etfw">April 30, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div><figcaption class="wp-element-caption">Text-based Ordinals inscriptions are apparently growing in number.</figcaption></figure>



Ordinals aside, most other bitcoin transactions right now are monetary in nature, often triggered by crypto exchanges, according to Glassnode.



“Importantly, Inscriptions represent approximately 30% to 40% of mined transactions — 10% to 20% of fees paid,” Glassnode said.



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Bitcoin Just Processed More Transactions Than Ever Before

Michael Bodley

Let them eat digital gold.



That’s the general consensus, at least in a Web3 sense, behind one of Jeremy Fall’s latest NFT collaborations: Golden Egg Club, which bills itself on <a href="https://opensea.io/collection/goldeneggclub">OpenSea</a> as a “private membership inspired by the traditional country club.”&nbsp;



The club was created in partnership with the South African artist Johnathan Schultz, and it’s bringing literal physical <a href="https://blockworks.co/tag/gold">gold</a> eggs to the blockchain war party.&nbsp;



The collection on Tuesday is officially set to launch on Bitcoin via Ordinals, the <a href="https://blockworks.co/news/cant-ignore-bitcoin-nfts">NFT protocol that hit Bitcoin’s mainnet in January</a>. The first Bitcoin-powered digital collectible went up for <a href="https://ord.city/auctions/1031514-ordinal-golden-egg">sale</a> on Monday, with a minimum bid of 3.1 million satoshis ($944).&nbsp;



Golden Egg Ethereum NFTs had already been listed since September 2022. Those Ethereum tokens can each be <a href="https://physical.goldeneggclub.io/">redeemed</a> for a 24 karat gold egg sculpture, but the 333 Bitcoin Ordinals won’t be backed in the same way. Instead, the artists are raffling off three of the eggs for Ordinals buyers.



Ordinals went live to an ensuing dose of controversy fueled by debate between bitcoin maximalist factions — as well as cryptocurrency industry participants more broadly. And bitcoin’s relationship to gold as a store of value <a href="https://blockworks.co/news/one-third-of-surveyed-gold-buyers-view-bitcoin-as-the-better-bet">has continued to make headlines</a>.&nbsp;



Now, the club is showing up on the Bitcoin <a href="https://blockworks.co/tag/nft">NFT</a> scene.



<figure class="wp-block-image size-large"><img decoding="async" loading="lazy" width="1600" height="771" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/04/image-1.png?w=1024&amp;h=1024" alt="" class="wp-image-52644" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/04/image-1.png?w=1600 1600w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/image-1.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/image-1.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/image-1.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/image-1.png?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/image-1.png?w=428 428w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/image-1.png?w=470 470w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/image-1.png?w=389 389w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/image-1.png?w=80 80w" sizes="(max-width: 1600px) 100vw, 1600px" /><figcaption class="wp-element-caption">A digital egg that grants access to a virtual country club | Source: <a style="font-style: italic;" href="https://magiceden.io/ordinals/launchpad/eggs?preview">Magic Eden</a></figcaption></figure>



The community is pitched as the kind of place where buyers with means can chill in a “new age virtual club where chipped nail polish and designer sneakers live alongside suits and sweatpants.”&nbsp;



Floor prices for Ethereum-bound Golden Egg Club NFTs are around 1.05 <a href="https://blockworks.co/price/eth" target="_blank" rel="noreferrer noopener">ETH</a> ($2,200).



The collection was co-created by Fall and Schultz, who is used to working with precious metal mediums. Schultz, now based in Miami, crafted the physical golden eggs that are tied to each NFT purchase.&nbsp;



Fall and Schultz in separate interviews told Blockworks that driving home the community’s networking capabilities is crucial to getting momentum behind in-person and online exclusive events — without coming off as a literal digital country club.&nbsp;



The ecosystem has already put on a number of real world events, according to Fall, and has plans to get more of those on the books in the coming months. Some of those concepts include pickleball match get-togethers, “real life pop ups” and dinner parties.&nbsp;



“It’s a way to bring people together that are all connected through our creativity and Web3, and it’s [driven by] people in Web3, like very involved founders, creators, artists — and it’s also people who are interested and in the work from a business perspective or just collectors,” Fall said.&nbsp;



“You don’t have to be deeply ingrained in Web3 to want to be a part of it. We wanted to create a club that welcomes people [who] are also trying to get in, but might have an interest in just connecting with people in that world. They might just be interested in art.”


<div class="wp-block-image">
<figure class="alignright size-medium"><img decoding="async" loading="lazy" width="1920" height="2560" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/04/IMG_8466-2-scaled.jpg?w=300&amp;h=300" alt="" class="wp-image-52653" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/04/IMG_8466-2-scaled.jpg?w=1920 1920w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/IMG_8466-2-scaled.jpg?w=225 225w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/IMG_8466-2-scaled.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/IMG_8466-2-scaled.jpg?w=1152 1152w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/IMG_8466-2-scaled.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/IMG_8466-2-scaled.jpg?w=193 193w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/IMG_8466-2-scaled.jpg?w=196 196w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/IMG_8466-2-scaled.jpg?w=164 164w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/IMG_8466-2-scaled.jpg?w=60 60w" sizes="(max-width: 1920px) 100vw, 1920px" /><figcaption class="wp-element-caption">Jeremy Fall with the golden eggs | Source: Golden Egg Club</figcaption></figure></div>


<h2 class="wp-block-heading">Gold on gold on gold&nbsp;</h2>



One partner on the physical gold product&#8217;s launch, Courtyard, struck its own partnership in February with Brink’s Inc., the business behind the armored Brinks trucks that move mounds of cash (or eggs of gold?) from location to location. The Golden Egg NFT collection falls under Courtyard. 



If it all sounds like Web3-meets-vintage-Silicon Valley for a drink, joined by Hollywood, Wall Street and artists everywhere, well…maybe that’s the point.&nbsp;



The collection, Fall said, is one big effort to tie together a bunch of ambitious business lines the serial entrepreneur has become involved in over the years.&nbsp;



Fall, who is based in Los Angeles, made his career in the restaurant industry, and then he started dabbling in all kinds of startups outside of the restaurant industry, ranging from entertainment to technology to fashion — all of which, he said, are sectors finding their own Web3 footing.&nbsp;



Even as US public perception of the crypto industry more broadly has taken its fair share of <a href="https://blockworks.co/tag/regulation">regulatory</a> bumps and bruises in 2023.&nbsp;



Golden Egg Club NFTs were 222 in number when they were minted on Ethereum in the fourth quarter of last year. 



In the duration, 222 have been vaulted and tied one-to-one to a real world, physical egg crafted out of plated gold, which Fall pegged as worth $5,000 apiece in January in a <a href="https://twitter.com/jeremyfall/status/1611398016946286593?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1611398016946286593%7Ctwgr%5Ee363e2abbb6d3d0711a4c096e3a5458c459acf92%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fblockster.com%2Fphysical-gold-backed-nft-collection-golden-egg-club-on-the-brink-of-new-heights">tweet</a> thread describing updates to the project.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">14k gold eggs and what ordinals mean to me 🧵🥚&mdash; jeremy fall (@jeremyfall) <a href="https://twitter.com/jeremyfall/status/1647338197129494529?ref_src=twsrc%5Etfw">April 15, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



<h2 class="wp-block-heading">‘Never going to zero’</h2>



Schultz, who is also the artist behind NFT collection <a href="https://opensea.io/collection/the-gemesis-by-js">Gemesis</a>, in a video interview said that formulating the Golden Egg Club started accidentally, “like an experimental joke.”&nbsp;



Pointing to the gold-plated hat he wore on his head that he designed, Schultz said that he started crafting physical gold-plated items after friends bet him he couldn’t properly pull it off.&nbsp;



Golden Egg Club was born later, he said, when Schultz became increasingly interested in exploring opportunities to tie physical gold to blockchain investments with actual utility behind each use case.&nbsp;



And, beyond the investment thesis, Schultz said he’s into the idea of a genuine Web3 community built with networking at its core.&nbsp;



That community, according to the collections’ OpenSea listing, is “a place where sipping mimosas with a sweater tied around your neck is the norm, as long as you’re not an asshole.”



Asked why he got behind this project to craft these physical and digital golden eggs in this most recent crypto cycle, Schultz said that there’s “no better time than now to actually put physical [assets] and gold behind” Web3 projects.



“If you take a look at what’s been happening in the past, even the blue-chip projects have been just folding,” he said. “It’s kind of crazy how they’ve dropped. And when you look at what the physical side brings — and especially if you’re incorporating precious metals like gold — then I think that brings extra tangible assets, in a way…So, you’re never going to go to zero.”



Updated April 18, 2023 at 6:31 pm ET: Corrects the purity of the physical golden eggs, as well as the number of NFTs minted on Ethereum. Also clarifies the relationship of the company Courtyard to the NFT collection.



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Brinks Trucks to Bitcoin: Golden Egg Club is Hatching Ordinals

Ordinals infrastructure is taking shape, with multiple marketplaces now servicing the budding Bitcoin digital collectible community.



Gamma.io is the latest, having built its presence by supporting creation and auctions for NFTs issued on Stacks, the smart contract layer for Bitcoin.



The platform now supports <a href="https://blockworks.co/tag/ordinals" target="_blank" rel="noreferrer noopener">Ordinals</a> auctions in the same vein as Ethereum NFT marketplace <a href="https://blockworks.co/tag/opensea" target="_blank" rel="noreferrer noopener">OpenSea</a>, allowing users to trade inscribed satoshis peer-to-peer. (Stacks NFTs are a separate concept to Bitcoin-native Ordinals.)



Gamma also launched a “no-code” Ordinals creation tool last month, allowing users to upload and inscribe any image to the Bitcoin blockchain. The firm says it has assisted production of more than 30,000 inscriptions to date, making up almost 10% of all Ordinals on the network.



&#8220;As Ordinals become the bright spot in this crypto winter, our trustless Bitcoin ordinals marketplace showcases our commitment to an exceptional Web3-native experience,&#8221; Jamil Dhanani, founder and CEO of Gamma, said in a statement.&nbsp;



Currently, Gamma allows access to only Stacks NFTs and Ordinals, but not Ethereum NFTs. However, Ethereum wallets can be connected to a single profile, enabling users to showcase NFTs across the three networks.



Stacks NFTs can be purchased with the network’s native token, STX, while Ordinals can be bought with bitcoin (<a href="https://blockworks.co/price/btc" target="_blank" rel="noreferrer noopener">BTC</a>).



<h2 class="wp-block-heading">What are Bitcoin Ordinals</h2>



Casey Rodarmor wanted to <a href="https://twitter.com/rodarmor/status/1619520557934059521?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1619520557934059521%7Ctwgr%5E40fa2a2936070d9aecda805f93c7d8eba4a4ec98%7Ctwcon%5Es1_&amp;ref_url=https%3A%2F%2Fwww.coindesk.com%2Fconsensus-magazine%2F2023%2F02%2F23%2Fcasey-rodarmor-why-i-developed-the-ordinals-bitcoin-nft-project-coindesk%2F" target="_blank" rel="noreferrer noopener">make Bitcoin fun again</a>. 



Following the Taproot upgrade in 2021, he <a href="https://blockworks.co/news/cant-ignore-bitcoin-nfts" target="_blank" rel="noreferrer noopener">identified</a> a way to store text, images, SVGs and HTML to be stored individually on the Bitcoin blockchain using a numbering scheme for satoshis — the smallest denomination of bitcoin.



Using an accounting-like method, individual satoshis were made non-fungible once they were able to be differentiated in a closed-off system, making them uniquely identifiable.&nbsp;



Many in the industry are excited about this new development, with Stacks co-founder Muneeb Ali saying: “Ordinals came out of nowhere and at the right time that has ignited interest in the Bitcoin builders culture again.”



“Overall, that is a very healthy thing for Bitcoin,” Muneeb said. “So many people who forgot about Bitcoin because they wanted to play with NFTs and other types of experimental things, they&#8217;re now booting up Bitcoin nodes and reconnecting with Bitcoin.”



<figure class="wp-block-image"><img decoding="async" src="https://lh6.googleusercontent.com/XdDYTpa9OjNMF_oG6v8nOq691SFNF7ymi-gNow9UJCI9pu_P9kRL0fbbtRpZKUP4-7JXrY4xowJKF0AV7zL81CqZjc_c-JEGxTLlfBupvmO4yiX4KkXNU5yb2HMQYF7Dltf-JrnWHmLGZ-CZqFi3Ddc" alt=""/><figcaption class="wp-element-caption">“Ordinals Sock Monster” is one of the first Bitcoin-bound collections to hit Gamma</figcaption></figure>



This sentiment is shared by Nick Sainato, Gamma co-founder, who told Blockworks that “as the most secure, decentralized and trusted settlement layer available, Bitcoin is the logical choice for creators to utilize for art, open-source code, historical and cultural artifacts, important documents, and more.”



“Though other innovative ways of using Ordinals remain to be discovered, we are committed, as we have been for the last 18 months, to providing accessible tools and a platform for everyone to discover the potential of Bitcoin,” Sainato said.



Gamma’s Ordinals marketplace will not be the first in the market. ORDX and Ordswap were the first two trustless marketplaces to have launched in the space. Other marketplaces such as scarce.city also exist.



These marketplaces all have relatively similar functionality, allowing its users to buy and sell inscriptions. Ordswap also acts as an Ordinals wallet so that no external wallets need to be connected to the site to execute transactions.



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