Bitcoin NFTs are growing in popularity despite dividing opinions among hardcore adherents of the protocol. On Wednesday, an Ordinal Punks NFT, Punk 94 was able to sell for 9.5 BTC, or $214,000 at the time. This marked the highest amount spent on an NFT that is based on the leading blockchain.
Also, another one was able to sell for 4.2 ETH, which roughly translated to about $95,000 at the time.
Ordinal Punks NFTs are a spinoff of CryptoPunks, the popular NFT collection based on Ethereum. They are possible thanks to the Ordinals project, which allows for the inscribing of data on the Bitcoin blockchain. These include JPEGs and any other data format.
The spin-off NFT collection featured 100 pieces. It was sold out in no time, with mints taking place in the first 650 inscriptions of the Bitcoin blockchain.
Bitcoin NFTs Could Inspire Development Of The Network
Ordinals launched three weeks ago and have proven popular within the NFT space, even though hardcore Bitcoin supporters wonder if there are merits to inscribing large files on the Bitcoin blockchain.
It is a move that has seen the growth of bitcoin’s block space, thus skyrocketing its transaction fees. Some of these proponents feel the network should be limited to financial transactions only. However, others see the coming of the Ordinals protocol as a catalyst that can fuel development that solves the blockchain’s core issues, such as its lack of scalability and efficiency.
However, there are potential risks, according to Sam Callahan, a Bitcoin analyst at Swan Bitcoin, a financial services company. Speaking to Coindesk he notes that “In the long term, if demand for these inscriptions proves to be long lasting, there is a risk that these inscriptions could impact other Bitcoin use cases like payments via the Lightning Network due to distorting Bitcoin’s fee market away from its use as an open monetary protocol.”
Ordinals is one of the first NFT protocols to operate on Bitcoin, which lacks smart contracts to support various applications. However, thanks to a Taproot Upgrade that took place towards the end of 2021, its possible to inscribe data directly on Satoshis; the smallest unit of Bitcoin.