Ordinals: Glassnode drives Bitcoin to new high of 44 million non-zero addresses
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Glassnode, a crypto analytics platform, reported that the release of Bitcoin non-fungible tokens (NFTs) called Ordinals has resulted in a new record high of 44 million non-zero Bitcoin addresses.
This is the first time that Bitcoin network activity has been used for something other than P2P BTC transfers in the cryptocurrency’s 14-year history:
“This is a new and unique moment in Bitcoin history, where an innovation is generating network activity without a classical transfer of coin volume for monetary purposes.”
According to Glassnode, the recent surge of Ordinals has led to a temporary increase in Bitcoin network usage, attracting numerous new active users with a non-zero BTC balance to the network:
Glassnode stated that the increase in network activity is mainly due to Ordinals, which carry a heavier data payload and have attracted more new active users, as opposed to carrying a large volume of coins.
This growth in user base goes beyond the usual investment and monetary transfer use cases, according to the report.
A new player competing for block space
Glassnode observed that the introduction of Ordinals has resulted in increased demand for block space, which is exerting upward pressure on the fee market. However, Bitcoin transaction fees have not seen a substantial increase despite this development.
Glassnode also reported that since Ordinals’ launch on Jan. 21, the average Bitcoin block size’s upper range has risen from 1.5-2.0 MB to 3.0-3.5 MB in just a few weeks.
Despite Ordinals’ impact on the network, transaction fees have not increased significantly. Glassnode reported that a new lower bound for transaction fees required for block inclusion has been established since Jan. 21, and there have only been some temporary spikes in fees.
Bitcoin Ordinals, which allows users to assign arbitrary content to satoshis using the Ordinals numbering scheme, was launched on Jan. 21. This became possible through the Taproot soft fork, which became effective in November 2021.
Over 78,400 Bitcoin-native, nonfungible token (NFT)-like images and videos have been inscribed using this technology.
While the introduction of NFT-like images on Bitcoin has brought new possibilities, it has also been met with controversy.
Notable figures such as Blockstream CEO Adam Back have expressed their disapproval of the Ordinals protocol, arguing that it contradicts Bitcoin’s goal as a peer-to-peer electronic cash system.
On the other hand, Bitcoin proponent Dan Held has supported Ordinals, claiming that it adds more financial use cases to Bitcoin.
