Since they arrived on the scene courtesy of the Ordinals protocol in 2022, Bitcoin-based NFTs have divided the blockchain’s global community of users.
On one side, advocates of the technology argue that no other blockchain platform delivers the same on-chain functionality, guaranteed security, and active user base as Bitcoin, making it a natural home for NFTs. On the other, purists maintain that Ordinals represent an unnecessary diversion from Bitcoin’s original premise that risks choking an otherwise streamlined payment network.
In October, the Bitcoin network recorded more Ordinals transactions than in any previous month. Already, in the first week of November, the blockchain has clocked over 175,000 transactions.
The surge in activity has increased due to rising interest in NFT collections such as Bitcoin Bees and OrdiRats, 2 BRP-20 tokens that have gone viral in recent days.
Of course, Ordinals transactions still pale in comparison to purpose-built NFT platforms like Mythos. Bitcoin Ordinals trading is also eclipsed by faster blockchains like Ethereum and Polygon, which regularly record tens of thousands of NFT transactions per day.
However, there is one crucial difference that separates Bitcoin from later generations of blockchains, many of which were designed with data-intensive NFT transactions in mind.
Even when running at maximum capacity, Bitcoin’s processing speed caps out at 7 transactions per second (TPS). In contrast, faster, more lightweight blockchains can achieve TPS rates in the tens of thousands. For example, the TON network recently recorded a new record of 104,715 TPS, making it faster than global card networks Visa and Mastercard.
Next to its younger, more nimble peers, Bitcoin’s transaction processing speed appears glacial by comparison.
Unsurprisingly, Ordinals skeptics who warned that the protocol would lead to network congestion had their fears confirmed when Bitcoin transaction fees started to climb in October.
Having fluctuated within 20% of a dollar throughout the summer, the average Bitcoin transaction fee increased to hit a 6-month high of $5.94 on Tuesday, November 6.
The last time NFT trading choked the Bitcoin network in May, some members of the community made the case for amending the underlying protocol to restrict Ordinals transactions.
As one developer put it , “worthless” BRP-20 tokens “threaten the smooth and normal use of the Bitcoin network as a peer-to-peer digital currency.”
In the end, however, Bitcoin purists may never be able to put the Ordinals cat back in the bag. Building the necessary consensus to enforce changes to Bitcoin’s core codebase is notoriously difficult.
Likewise, convincing miners to support an upgrade that could negatively impact the income they generate from transaction fees will always be an uphill battle