Bitcoin Transactions Soar as Ordinals Barrel Past 2.5 Million, Notch Daily Record
April 30, 2023

Bitcoin Transactions Soar as Ordinals Barrel Past 2.5 Million, Notch Daily Record

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Ordinals notched a new record on Saturday as the protocol used for inscribing digital assets on Bitcoin—producing assets comparable to Ethereum-based NFTs—had its busiest day yet.

The daily number of inscriptions made through Ordinals on Saturday totaled around 223,000, according to a widely-used Dune dashboard. It marked the first time over 200,000 inscriptions were made in a single day and suggests the protocol is as popular as ever as it enters its fifth month since launch.

In April alone, the daily record for inscriptions made was shattered four other times. That included roughly 72,000 inscriptions on April 2 and 193,000 inscriptions on April 23, according to the Dune dashboard.

At the same time, the number of Bitcoin transactions neared levels not seen in several years, according to blockchain analytics firm IntoTheBlock. On Sunday, the firm said that the weekly average of daily Bitcoin transactions was around 396,000, its highest level since December 2017.

 

Looking at some of the latest inscriptions using ordinals.com, what once resembled a sea of images early on has morphed into a wall of text-based inscriptions. The tides began to shift last month as people discovered Ordinals could be used to create fungible tokens on Bitcoin, in a way that’s analogous to what one can do on Ethereum.

The trend was kicked off by a pseudonymous on-chain data enthusiast named Domo, who created the “BRC-20” token standard as an experiment. And as of Sunday, close to 6,900 tokens using the new-developed standard have been launched, including several meme tokens with multi-million dollar market caps, according to data from brc-20.io.

North of 99.8% of the total inscriptions made on Saturday was text-based compared to just 272 image-based inscriptions, which represented 0.1% of the daily total. While not every text-based inscription is tied to fungible tokens, the ratio on Saturday represents a shift in Ordinals’ use compared to when the month began.

When the daily record for inscriptions made was broken on April 4, text-based subscriptions accounted for only 86% of the daily total, while image-based ones made up nearly 13% at 9,273.

Aside from the creation of fungible tokens under the so-called BRC-20 standard, Ordinals is opening the door to activity on Bitcoin in other ways, such as the Sats Name (.sats) standard that resembles name services built on Ethereum.

On Friday, the self-described NFT Historian @LeonidasNFT recognized recent developments in the Ordinals space, saying that “ordinals protocol innovation on Bitcoin has been increasing exponentially.”

That same day, the account celebrated a separate milestone for Ordinals, as the total number of inscriptions crossed 2 million. Just a couple of days later, the total number of inscriptions is now over 2.5 million, according to the Dune dashboard.

“It’s thrilling to see inscriptions growing the way they are,” Ordinals Project Communications Director Isabel Foxen Duke told Decrypt, “I’m concerned these numbers are inflated by a flood of inscription-generated BRC-20 tokens which are highly insecure and may pose a risk to retail investors.”

Indeed, some projects that have quickly embraced the experimental token standard have encountered headwinds, such as UniSat Wallet. Shortly after the digital wallet project—which supports inscriptions and BRC-20 tokens—launched its own marketplace, the service was compromised “due to a vulnerability in [its] codebase.”

UniSat Wallet indicated it will compensate users who were affected by the incident on Twitter, which it said had impacted 70 transactions. The project did not immediately respond to requests for comment from Decrypt.

Inscriptions are sometimes referred to colloquially as Bitcoin NFTs, but the process for creating inscriptions and how each one’s corresponding data is stored is distinct compared to digital assets that are created on blockchains like Ethereum or Solana.

NFTs are unique digital tokens minted using smart contracts, where people interact with code that operates on decentralized protocols. They represent the ownership of an item, often digital art, and though it’s possible to store assets such as images on-chain using Ethereum or Solana, most NFTs point to an asset that is stored off-chain.

 lInstead of creating a token that’s entirely new, using Ordinals, people inscribe content like images or text to individual Satoshi, the smallest denomination that a Bitcoin can be divided into (1/100,000,000 BTC). And that content is stored directly and permanently on Bitcoin’s blockchain.

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