Ordinals, the protocol that has sparked the NFT fever on the Bitcoin network, encourages the construction of a new ecosystem beyond the financial layer.
Digital asset investment management company Grayscale has published a paper on the positive impact of Ordinals on the Bitcoin network.
While this protocol has claimed a lot of attention in recent months, generating a great debate over the use of the Bitcoin blockchain for the registration of NFTs, Grayscale believes that ordinals have much to contribute to the network, unlocking new capabilities in Bitcoin that can enrich its digital ecosystem.
More than 2 million ordinals registered on the Bitcoin blockchain
In her article, the company explains how Ordinals have become an innovation that is transforming the approach with which Bitcoin was designed.
Ordinals have the ability to unlock the cultural potential of the blockchain network, Grayscale said, elevating Bitcoin's use cases beyond the financial layer.
At present, the number of ordinals registered in the Bitcoin blockchain exceeds 2,6 millionAt the beginning of April, there were just over 1 million ordinals stored on the network, which gives us an idea of the importance and interest that this protocol has generated in its short existence.
According to Grayscale, although many criticize or fear that these inscriptions, which live entirely on the Bitcoin blockchain, could divert the initial purpose for which the cryptocurrency was created and affect the performance of the chain, in reality ordinals represent one of the greatest opportunities to accelerate its adoption, attracting new users to the network.
The impact of ordinals on BTC
Bitcoin is the leading cryptocurrency on the market and the most capitalized blockchain in the crypto industry. However, it is generally regarded as a rigid and even stagnant blockchain ecosystem, whose solutions and use cases are focused solely on the financial world.
For investors, Bitcoin is the leading alternative investment asset and store of value. The cryptocurrency is also considered digital money, serving as a “peer-to-peer electronic cash system.” However, compared to other blockchains like Ethereum, Bitcoin lacks some attractive features for developers, such as the ability to easily create and deploy decentralized applications (DApps).
All of this is transformed by the arrival of the Ordinals protocol. Launched in late 2022 by developer Casey Rodarmor, the protocol Ordinals allows you to store files, from images to videos, directly on the Bitcoin blockchain, adding data to a BTC transaction and immutably linking that data to a satoshi, the cryptocurrency's smallest unit of currency.
Grayscale believes that the registration of NFT-like files on Bitcoin has great potential, although it was not initially planned in its design.
A cultural transformation
One of the main reasons why Grayscale sees the arrival of Ordinals on Bitcoin as positive is the ability to generate a cultural transformation in the community of cryptocurrency users.
On the other hand, the investment management company points out that ordinals can help ensure the stability and security of the blockchain network when mining activity comes to an end.
Once all bitcoins are mined, transaction rewards may be insufficient to incentivize miners to stay online to ensure sufficient hash power to secure the chain, the company noted. However, ordinals may result in an increase in the commission fees paid to miners, making them more attractive.
Finally, while there are legitimate concerns about ordinals, for Grayscale this innovation can attract a new wave of users to Bitcoin and encourage developers to build on this blockchain.
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