At the beginning of April, more than 72 thousand new digital artifacts were entered into the Bitcoin network using the Ordinals protocol. This is a record of daily activity, the reason for which was the development of a new token standard — BRC-20.
According to Dune Analytics, on April 2, 2023, with the help of the NFT-protocol Ordinals, users entered 72,328 digital artifacts into the Bitcoin blockchain network during the day, which was a record. The maximum was 128% higher than the previous record, which was set on March 9 at 31,692 entries.
What Are Bitcoin Ordinals?
Bitcoin Ordinals are a protocol that allows data such as text, images, and other digital content to be inscribed directly onto individual satoshis, the smallest units of Bitcoin. The protocol introduced a new way to create NFT-like digital artifacts on the Bitcoin network without relying on smart contracts.
The total number of digital artifacts entered into the first cryptocurrency network is now just over 773.7 thousand. However, at the end of March, their number in the Bitcoin network did not exceed 645 thousand.
The main reason for the current growth in popularity of Bitcoin Ordinals is the implementation of a new token standard — BRC-20 (Bitcoin Request for Comment). An anonymous developer under the pseudonym Domo decided to experiment with Ordinals and proposed the BRC-20 token standard for the Bitcoin network, a partial analog of the ERC-20 standard in the Ethereum network, with much more limited functionality. It allows for “cryptocurrencies to be created” using the Ordinals protocol.
Key Effects of the BRC-20 Standard
The emergence of BRC-20 expanded the range of use cases for the Ordinals ecosystem and contributed to growing network activity:
- Increased demand for Bitcoin inscriptions
- Growth in non-financial transactions on the network
- Higher transaction fees for users
- Additional revenue opportunities for miners
- Expansion of Bitcoin-based token experimentation
Thus, 85% (62,602) of the digital artifacts inscribed on April 2 are text. The host of The Ordinal Show podcast believes that at least 58,000 of them are BRC-20 tokens, that is, “cryptocurrency tokens” deployed on the Bitcoin network. According to him, the surge of interest in BRC-20 tokens on Ordinals is primarily because developers were able to create tools to interact with the new standard quickly. These new tools include Ord.io, UniSat Wallet, and BRC-20.io. According to BRC-20.io, more than 1,650 “cryptocurrencies” have already been created on the Bitcoin network using the new standard.
Ordinals Changed the Bitcoin Ecosystem
What began as an experiment quickly evolved into one of the most significant developments in Bitcoin beyond payments. Ordinals introduced new forms of digital ownership and helped spark broader interest in Bitcoin-native assets. The protocol also reignited debates within the community over how block space should be used and whether non-financial activity benefits or burdens the network.
Thanks to the popularity of the Ordinals protocol, the use of the Bitcoin network for non-financial transactions increased. Also, the NFT protocol became the reason for the growth of transactional fees in the Bitcoin network and the earnings of BTC miners.
FAQ About Bitcoin Ordinals and BRC-20
Bitcoin Ordinals allow digital content to be inscribed directly onto individual satoshis on the Bitcoin blockchain, creating Bitcoin-native digital artifacts.
BRC-20 is an experimental token standard that uses Ordinals inscriptions to create fungible tokens on the Bitcoin network.
No. BRC-20 was inspired by Ethereum’s ERC-20 standard but offers much more limited functionality and relies on Ordinals inscriptions rather than smart contracts.
Yes. Increased inscription activity competes for block space and can contribute to higher transaction fees across the Bitcoin network.
