The Ordinals inscription protocol, launched by Casey Rodarmor in January 2023, has revolutionized the NFT world with the ability to inscribe data into satoshis, the smallest Bitcoin denomination. It appears that Ordinals are currently enjoying a new wave of traction due to the creation of the BRC-20 token standard on March 8 by Domo, a pseudonymous on-chain analyst.
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BRC-20 stands for Bitcoin Request for Commitment and greatly expands the functionality of the Ordinals protocol by allowing users to deploy and interact with token contracts, just as it is possible with the Ethereum's ERC-20 standard.
Prior to the implementation of BRC-20, which is also known as text Ordinals, the protocol had been mainly used for minting image-based NFTs. According to statistics from blockchain analyst Dgtl_assets posted on Dune, the total number of text Ordinals was 3,400 on March 8 while on May 6, the number reached nearly 400,000.
Another pseudonymous Web3 analyst Finish posted a tweet yesterday claiming that "the amount of inscriptions is literally mooning and has doubled in the last 10 days, the place in the Bitcoin blocks gets more and more expensive," adding, "this kind of demand drives the fees even higher. We are at yearly ATH at ~$29.43 for a single tx. We haven't seen such high prices since April 21."
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Dgtl_assets reported that Ordinals' record fees totaled $7,214,499.51 yesterday, compared to fees paid on March 8 amounting to $27,855.38. At press time, fees paid over time totaled $27,644,155.73, while the majority of Ordinals transactions are now conducted for minting rather than money transfers.
According to Finish, "already half of all $BTC transactions are BRC-20. It was a long time since the $BRC network has seen such demand," but it is not yet possible to tell if this is just "meme-season hype or new reality." In the meantime, data provided by Dgt_assets shows that 86.2% of all inscriptions are text Ordinals.
While many Ordinals enthusiasts are excited about the success of the protocol, there is still an ongoing debate about the long-term impact of the protocol on the Bitcoin network. Some conservative Bitcoinists are concerned about rising transaction fees, while others criticize the protocol simply for not being in line with Satoshi Nakamoto's original concept since Bitcoin's creators designed the network primarily as a means of payment.
Interestingly, the popularity of Ordinals has also led to competition between Ethereum-based NFTs and Ordinals supporters who believe their preferred network is the best place to mint NFTs.
As Twitter user Fred Krueger posted in April, "The point is the ease of transcription. This is an entirely new level of utility over ERC-20 + NFTs on ETH," while Ordiscan developer with Twitter name Tristan responded that despite the ease of transcription, "there's no chance BRC20 will ever surpass ERC20 as an actual token protocol."
