The world of non-fungible tokens (NFTs) has been gaining significant attention in recent years, with the global NFT market expected to grow to $25 billion by 2025. NFTs are digital assets that represent ownership of unique items such as digital art, music, and video game items. The rise of NFTs has led to the development of various protocols and blockchains for creating, buying, and selling them.

One such protocol is the Ordinals Protocol, which has recently made headlines after reaching a significant milestone. According to Dune Analytics, the cumulative number of inscriptions on the Ordinals Protocol has exceeded 500,000, with transaction fees exceeding 100 BTC (about $2.74 million) in March 2023. This is a remarkable achievement for the protocol, which was launched in 2019 with the goal of creating a new type of transaction that could encode arbitrary data, including metadata, into the Bitcoin blockchain.

@azcoinnews

Unlike Ethereum NFTs that require off-chain data on IPFS, Ordinals Protocol allows for all data to be written directly to the blockchain, resulting in perfect NFTs. This makes the Ordinals Protocol unique among other NFT issuance protocols, which typically use the expression “minting” when issuing NFTs, while Ordinals Protocol refers to it as “inscription.” An inscription is data inscribed in Bitcoin, including smart contracts, and is a combination of media files such as JPEG of images and text.

The success of the Ordinals Protocol has sparked debates within the Bitcoin community. Critics argue that the use of the Bitcoin blockchain should be limited to financial transactions and that storing NFT data on it undermines the original mission of Bitcoin, which was to enable peer-to-peer financial transactions without banks or third parties.

There are also concerns about the energy consumption of Bitcoin’s proof-of-work and its limited storage capacity. The maximum storage space for Bitcoin data is 4 megabytes, and the larger the storage capacity, the faster one block is consumed. Transaction fees increase with more transactions on the network, resulting in slow transfer speeds and significant gas costs that are inconsistent with NFTs.

However, supporters of the Ordinals Protocol believe that it will lead to a cultural change and technical improvement in the NFT space. According to a report by Galaxy Digital, the Bitcoin-based NFT market is expected to grow to $4.5 billion by 2025, and the profitability of miners can be strengthened if transaction fees increase with various transactions, including NFT inscriptions. Increased demand for Bitcoin blocks will increase the scarcity of Ordinals Protocol and users will be willing to pay more fees.

Furthermore, the use of the Ordinals Protocol can help secure the liquidity of Ethereum-based NFT markets such as OpenSea. Users can take care of the security of proven assets with Bitcoin, Dapps, and layer 2 protocols running on the Ethereum virtual machine. The inscription market is expected to grow through marketplaces such as Gamma, and layer 2 protocols such as Stacks using Bitcoin will emerge outside the realm of existing financial transactions.

In conclusion, the Ordinals Protocol’s success highlights the potential for Bitcoin to expand beyond its traditional use in financial transactions and into the NFT space. As the market for NFTs continues to grow, it will be interesting to see how Bitcoin and other blockchains continue to evolve to meet the demands of users and developers alike. While there are criticisms and concerns surrounding the use of Bitcoin for NFT inscriptions, the Ordinals Protocol’s growing popularity suggests that it may play a significant role in the future of NFTs.

#BitcoinNFT #NFT #Ordinals #azcoinnews #crypto2023

This article was republished from azcoinnews.com

- The Bitcoin Ordinals site faced a DDoS attack, causing a crash, which is ironic given Ordinals' criticism for spamming the Bitcoin network.
- Casey Rordamor, the creator, labeled it a DDoS, but critics like Luke Dashjr highlight Rordamor's own network "spamming."
- Dashjr's comparison of Ordinals to a heinous act intensified the already heated debate.
- Despite backlash, the Ordinals site is back up, adding more entries to the network.
- Bitcoin's network congestion worsens, with over 370,000 unconfirmed transactions and soaring fees, exacerbating the "spam" scenario.

Certainly, here's an alternative text broken down into paragraphs:
Recently, the Bitcoin Ordinals' classification as "spam" triggered a heated debate on Twitter. Almost instantly, factions emerged among developers and enthusiasts, and the exchanges of verbal jabs have persisted since.
However, a surprising twist unfolded this week. The Bitcoin Ordinals website encountered its inaugural spam attack since its inception, resulting in widespread derision and ridicule from the "anti-Ordinals squad."
The Ordinals' Website faced a Massive Crash. On December 27, a Distributed Denial of Service (DDOS) attack struck the Bitcoin Ordinals website, leading to a complete blackout. In essence, DDOS attacks inundate a network with requests, overwhelming it and causing it to cease functioning.
This attack drew comparisons from critics who likened it to the impact Ordinals supposedly exert on the Bitcoin network. The irony was glaring, and detractors swiftly capitalized on it, reigniting the contentious debate.
Casey Rordamor, the creator of Bitcoin Ordinals, broke the news of the attack through a tweet, expressing bewilderment at the unprecedented crash since the website's launch.
Critics didn't hold back. Luke Dashjr, the Bitcoin core developer central to the pro versus anti-Ordinals discourse, seized the opportunity to question Rordamor's portrayal of the crash as a DDOS attack. Dashjr highlighted Rordamor's alleged hypocrisy, referencing previous arguments wherein he justified Ordinals as long as miners processed ordinal transactions.
Dashjr's criticism extends further. He once likened Ordinals on the Bitcoin network to a sensitive issue, comparing it to a now-deleted Twitter thread where he paralleled the concept to a distressing analogy.
Despite the website's restoration and the continuous inscription of ordinals on the network amid the criticism, Bitcoin's "spam" issue persists. The mempool holds over 370,000 unconfirmed transactions, causing fees to surge drastically for both standard and high-priority transactions.
Disclaimer: While aiming for accuracy, Voice of Crypto absolves itself from any potential misinformation. Cryptocurrencies are highly volatile assets, necessitating thorough research before making financial decisions.

#Bitcoin #BTC #Ordinals #bitcoinordinals #BitcoinETF

#Bitcoin, the biggest blockchain in the world, is constantly evolving. With its last upgrade, Taproot, the “Godfather” of all crypto has been reshaped drastically. 

The Bitcoin blockchain has transformed from an old, finance-directed #blockchain to an innovative one, potentially rivaling Ethereum. 

Many have embraced this new technology, dubbing it the revolution of all Web3. Others, on the contrary, have rejected this new approach to the oldest blockchain out there, arguing that Bitcoin’s functionality should be resumed for computing financial transactions. 

Either way, there’s no doubt that Taproot has opened a bunch of new possibilities within the space. Let’s see what new possibilities has Taproot created for Bitcoin. 

What is Taproot and How Does it Work? 

Taproot is a significant upgrade to the Bitcoin protocol that aims to enhance the privacy, scalability, and flexibility of the network. It was activated as a soft fork in November 2021. Taproot introduces a new scripting language called "Schnorr signatures," which enables the creation of more complex and secure transactions while reducing their size on the blockchain. 

This improvement enhances privacy by making all transactions appear more uniform, hiding the specific details of complex multi-signature transactions.

Taproot also brings increased scalability to the Bitcoin network by optimizing the way transactions are structured, allowing multiple transactions to be combined into a single one. This bundling reduces transaction fees and improves overall efficiency.

Additionally, Taproot provides greater flexibility by introducing a new feature called "smart contracts." These contracts allow users to set conditions for spending their Bitcoin, adding more sophisticated functionality to the network.

Top 3 Most Important Bitcoin Technologies

After the introduction of Taproot, Bitcoin devs started exploring the new possibilities of the blockchain. Here are the three most interesting and relevant changes made in the last 2 years. 

Bitcoin Domains

The most interesting usage of Taproot’s possibilities is the creation of human-readable Bitcoin domains. Just like with Web2, you can now create a domain and use it as you want. 

A Bitcoin domain provider consists of two key components: a registry and resolvers. A registry is a smart contract that maintains a mapping of domain names to the Bitcoin addresses. The resolvers are responsible for resolving domain names to their corresponding Bitcoin addresses.

When a user wants to register a domain name, they send a transaction to the smart registry contract with the desired domain name and the Bitcoin address they want it to resolve. Once the transaction is confirmed, the registry will store the domain name mapping to the Bitcoin address.

This technology has a ton of different use cases that can be useful in one way or another. 

For example, if you’re one of those lucky individuals who forgot about fiat currencies and only use Bitcoin and crypto to settle financial transactions, this new Bitcoin functionality is perfect for you. 

You've likely encountered people who struggle to remember their Bitcoin addresses, leading to difficulties when conducting new transactions. Or maybe you’re the one struggling to keep the lengthy address title in mind. 

Now, just imagine how much simpler your life would be if instead of dealing with a complex address like "3FZbgi29cpjq2GjdwV8eyHuJJnkLtktZc5," you could utilize a user-friendly name like "money.btc." With Taproot, this is an attainable mission. 

Multiple companies are already using the power of #Ordinals and Bitcoin to provide such a service. BTC Domain, for example, offers the remarkable ability to assign a human-readable name to your Bitcoin address, significantly streamlining the process of completing cryptocurrency transactions.

They use a combination of Ordinals and ZK-Proofs to develop a system that emulates smart contracts exclusively utilizing the Bitcoin blockchain. 

Another interesting company that took a similar approach to #ENS (Ethereum Name Service) is Stacks. Stacks is a Layer 2 blockchain on Bitcoin. Hence, all their .BTC domains are registered through a smart contract on Stacks, secured by Bitcoin. 

This smart contract implements a decentralized name registry written in Clarity lang. Ownership of every .BTC name is represented in a hash of the Bitcoin blockchain.

Ordinals

The Ordinal protocol was created by software engineer Casey Rodarmor on January 21, 2023. At its core, it enables users to inscribe their unique NFTs directly onto the Bitcoin network, without the need for additional instruments. 

The Ordinals protocol empowers Bitcoin node operators to individually inscribe data onto each satoshi, transcending traditional boundaries and allowing for the creation of distinct Ordinals. These inscriptions can encompass various forms of media, including JPEGs, videos, and audio files.

Ordinals differentiate themselves from typical NFTs in various ways. In the Ethereum network, NFTs are typically associated with off-chain data sourced from the Interplanetary File System. Users often encounter the term "refresh NFT metadata" when minting a new NFT, which involves updating the cover image and revealing information about the minted NFTs and their rarity.

In contrast, Ordinals store their data directly on the blockchain itself, diverging from the conventional NFTs' reliance on server-based connections. This characteristic makes Ordinals true immutable digital artifacts that are intricately intertwined within the fabric of the Bitcoin network, hence referred to as "inscriptions."

Since the launch of the protocol, Bitcoin NFTs gained more and more popularity among digital asset lovers. Right now, Bitcoin NFTs are just $4M short to reach the trading volume of Ethereum NFTs, significantly surpassing other blockchains. 

The biggest collection of Bitcoin NFTs is currently the Ordinal Punks. FlowStay, the creator of the Ordinal Punks collection, crafted this unique set of NFTs as a nostalgic tribute to the original CryptoPunks collection on the Ethereum network. These Ordinal Punks were among the first 650 inscriptions created using the Ordinals protocol.

Not far behind are the Ordinal Birds. These are a tribute to another established Ethereum NFT collection, Moonbirds, and have been trading OTC at prices ranging from 0.17 BTC to 0.72 BTC. 

BRC-20 Tokens

The #BRC20 token standard revolutionizes the creation and transfer of fungible tokens on the Bitcoin blockchain through its experimental framework known as the Ordinals protocol.

Drawing inspiration from Ethereum's ERC-20 tokens, BRC-20 tokens introduce unique mechanisms and functionalities that bring an entirely new perspective to the Bitcoin blockchain.

In addition to capitalizing on Bitcoin's widespread popularity and an esteemed reputation, BRC-20 tokens inherit the robust security and decentralization of the Bitcoin network. This allows them to be seamlessly exchanged between peers, similar to any other cryptocurrency in existence.

By harnessing Ordinals inscriptions of JSON (JavaScript Object Notation) data, BRC-20 tokens enable the deployment of token contracts, minting of new tokens, and seamless execution of token transfers.

While Bitcoin NFTs attach digital assets to satoshis, the BRC-20 token standard attaches a JSON (Javascript Object Notation) code to satoshis using the ordinals protocols. The JSON contains pieces of executable code bits that can be deployed on the Bitcoin network. These define every aspect of the token including the supply, minting limit, and the token’s Identity. 

The industry of BRC-20 tokens is growing fast. There are currently over 34,000 tokens in circulation with a collective market capitalization of ~$200M. These tokens have seen a substantial daily trading volume of around $40M in the last month. 

The most popular BRC-20 project right now is Ordi. With more than $160M in market cap and $20M in daily trading volume, Ordi has taken the initiative in the race for the best BRC-20 token out there. 

Despite its fame and financial viability, the rise of BRC-20 transactions has placed significant strain on the Bitcoin blockchain. The speed of the Bitcoin network, which typically handles around 7 transactions per second (7TPs), has become overwhelmed by the sheer volume of transactions associated with BRC-20 tokens and ordinal NFTs.

Binance was one of the multiple victims of BRC-20 tokens. Their Bitcoin transactions clogged up, resulting in users not being able to withdraw, send or deposit Bitcoin on Binance.

Also, reports indicated that the Bitcoin network had accumulated over 300k transactions in the queue on May 8th, resulting in transaction fees reaching record highs not seen in the past two years, surpassing $30.

Wrapping Up

To sum everything up, Taproot was a significant step for Bitcoin and the Bitcoin community. While not everybody thinks of Ordinals and BRC-20 tokens as a good thing, it is progress and we have to embrace it with open arms. 

The upgrade addresses some of its limitations and expands its potential applications while maintaining the network's security and decentralization principles.

1. ORDI surged over 500% in the last month despite recent downward trends.
2. Ordinals leverage a Bitcoin network vulnerability, masking data as code.
3. Rising data additions to the blockchain are driving sharp increases in transaction fees.
4. Uncertainty looms over the fate of Ordinals and BRC-20 tokens, hinting at their potential demise.
Recent fervor around Bitcoin Ordinals has driven substantial investor profits since its inception. The native cryptocurrency ORDI, part of the ordinals protocol, surged more than 500% in the last 30 days, with a remarkable spike occurring within the past fortnight.
Yet, amidst the hype lies a looming concern: warnings of an imminent crash potentially reducing this cryptocurrency to zero.
This stems from the innovation in inscriptions, ordinals, and Bitcoin NFTs—an intriguing development in the blockchain realm. Engineer Casey Rodarmor pioneered a method to 'inscribe' data into Satoshis, akin to NFTs found on various chains. This breakthrough marked the inception of the first Bitcoin network-based NFTs, facilitated by the BRC-20 token standard, with ORDI being the most prominent.
However, a recent disclosure by Luke Dashjr, a Bitcoin Core developer, paints a grim picture. Dashjr highlights that Ordinals and other BRC-20 tokens exploit a vulnerability within the BTC network—disguising data as legitimate code to surpass data size limits, effectively 'spamming the blockchain.'
Disturbingly, this vulnerability may soon be rectified, potentially signaling the demise of BRC-20 tokens, driving their prices towards insignificance.
The crux lies in the unrepaired data size limit within the core Bitcoin code, leaving Ordinals vulnerable, unlike the patched Bitcoin Knots derivative. Yet, the impending v27 release in 2024 could spell doom for Ordinals, as this vulnerability might finally be addressed.
The value of utility tokens thrives on their usage. Dashjr posits that BRC-20 tokens' assault on Bitcoin has inflicted irreversible damage on the blockchain, leading to escalated transaction fees—a sign of underlying issues.
Given their significant blockchain space occupation and fraudulent nature, urgency looms over potentially ending Ordinal inscriptions, marking a possible conclusion to this vulnerable yet innovative technology.
Disclaimer: While striving for accuracy, Voice of Crypto absolves itself of responsibility for any inaccuracies. Cryptocurrencies are highly volatile; hence, independent research is advisable for financial decisions.
#Ordinals #BitcoinETF #BTC
$BTC