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Bitcoin (BTC) serial numbers, also known as Bitcoin NFTs, could rekindle developer enthusiasm for Bitcoin and raise mining fees, according to cryptocurrency investment firm Grayscale.
In an April 27 Market Byte blog post, the firm suggested that ordinals provide two key benefits to the growth and development of the Bitcoin ecosystem.
#Ordinals have generated a great deal of attention in the cryptocurrency ecosystem by introducing #NFT-like assets on the #Bitcoin blockchain. @mzhao8 and our research team explore their potential in our latest Market Byte:
https://t.co/7muc9Lyrok— Grayscale (@Grayscale) April 28, 2023
First, according to Grayscale, is the significant increase in fees paid to miners that has been observed since the protocol was launched in January.
“The emergence of serial numbers has led to an increase in the total amount of commissions paid to miners […]which could potentially set a sustainable baseline for transaction fees to incentivize miners.”
Grayscale claimed that this would provide “continuous network security throughout the lifetime of the Bitcoin network.”
Less than two months after its launch, more than $600,000 has been paid out to Bitcoin miners solely as a result of fees generated by ordinal inscriptions, Cointelegraph reports. At the time of publication, that figure has surpassed the $6.5 million mark.
The investment firm also believes that ordinals and the “speed of NFT adoption” could also attract new Bitcoin users and spur further development of the Bitcoin network.
“We believe that the advent of ordinals is likely to foster a development-oriented community and culture in support of the Bitcoin network.”
On April 30, the Ordinals set a new record with over 300,000 entries per day.
Around the same time, the number of bitcoin transactions approached peaks not seen in the last few years, according to blockchain data firm IntoTheBlock.
Related: Magic Eden Launches Bitcoin Ordinals Marketplace
The meteoric rise of ordinals has been a controversial topic in the wider Bitcoin community, as Bitcoin maximalists have widely criticized it for deviating from Bitcoin’s original purpose as a peer-to-peer e-currency and littering valuable block space.
One such critic is Blockstream CEO Adam Back, who made a number of comments calling ordinals “worthless” and stating that he is “more into bitcoin as a currency.”
“you can’t stop them” well ofc! bitcoin is designed to be censor resistant. doesn’t stop us mildly commenting on the sheer waste and stupidity of an encoding. at least do something efficient. otherwise it’s another proof of consumption of block-space thingy.
— Adam Back (@adam3us) January 29, 2023