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Bitcoin Author Accuses Ordinals of Being “Pump and Dump”

Last Updated January 2, 2024 10:19 AM
Teuta Franjkovic
Last Updated January 2, 2024 10:19 AM

Key Takeaways

  • Bitcoin Maximalist Jimmy Song criticized the Ordinals protocol, comparing it to a “pump and dump” altcoin scam.
  • Song argued Ordinals capitalizes on Bitcoin’s reputation while pushing activities contrary to Bitcoin’s objective of economic freedom.
  • Despite Song’s perspective, Ordinals finds support from others in the industry who see potential benefits.

Bitcoin developer Jimmy Song, recognized for his staunch maximalist stance, has voiced doubts about the Ordinals protocol, comparing it to a typical altcoin scam.

These remarks by Song emerged as the Bitcoin community engages in increasing conversations regarding the Ordinals protocol. Introduced in early 2023, this protocol has ignited discussions about its effects on the network.

Utilizing Bitcoin’s Reputation

Jimmy Song claims that the Ordinals protocol is, effectively, an altcoin scam, subtly capitalizing on the Bitcoin brand to mislead individuals.

He suggested that Ordinals, by being built upon the Bitcoin network and embracing the principles of sound money and self-sovereignty usually linked with BTC, has leveraged Bitcoin’s fame to gain a facade of legitimacy and trustworthiness.

Song said :

“That’s why ordinals and BRC-20 are becoming more popular. There’s little chance of escaping the ‘shitcoin’ moniker by releasing a token on Ethereum or Solana now. The gulf between Bitcoin and altcoins is too wide and crossing that chasm, to scam newbies has become that much harder.”

Song maintained that a closer examination of the Ordinals movement uncovers characteristics akin to the “pump and dump” tactics typical of altcoins. These tactics prioritize token trading and speculative activities over furthering Bitcoin’s objective of promoting economic independence.

This perspective from Song reflects a larger debate within the Bitcoin community about the network’s future and its applications. While he holds a purist viewpoint, cautioning users against being “misled” by Ordinals and advocating for the community to unmask the protocol as fraudulent, other members of the community perceive potential advantages in Ordinals.

Advantages of Ordinals

Launched in early 2023 at approximately $25, the value of Ordinals tokens sharply dropped to about $5 shortly after. Nevertheless, in the following months, the token has witnessed a recovery, increasing more than tenfold from its lowest point, currently fluctuating between $75 and $80.

Michael Saylor, Chairman of MicroStrategy, recently commended  the protocol for its capacity to draw talent and innovation from competing blockchains. This sentiment is echoed by others in the industry.

Advocates of Ordinals argue that it has been advantageous for Bitcoin miners. Since its inception, the protocol has generated significant additional fees, thus revitalizing mining activities and fostering enhanced network security.

The ongoing debate  over Ordinals is part of a broader conversation concerning Bitcoin’s future. This debate revolves around core Bitcoin principles, such as its open nature, and the challenge of preserving these values while also embracing new uses and advancements.

Discussions about Ordinals and their potential impact on the Bitcoin network have sparked speculation about a potential Bitcoin fork in 2024.

This stems from concerns regarding network congestion, limitations on block space, and escalating transaction fees. The debate underlines a deepening rift within the Bitcoin community and demostrates the difficulties in achieving consensus within a decentralized system.

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