The hype surrounding Bitcoin-based non-fungible tokens (NFTs) continues to grow with the recent launch of the Ordinals protocol. On Thursday, the protocol recorded numerous record-breaking mints and high-value sales.
Ordinals Protocol takes advantage of the Bitcoin Taproot upgrade, which improved the security and speed of transactions on Bitcoin. It preserves NFTs as inscriptions, encoding data into small units called satoshis, or sats, which are equivalent to one hundred millionth of a bitcoin.
A project known as the “Bitcoin Punks,” which resembles the well-known CryptoPunks collection on Ethereum, is rapidly increasing in value. Another CryptoPunks-inspired project, Ordinal Punks, consisting of 100 pixelated avatars inscribed on Bitcoin, has been gaining traction.
On Wednesday, an Ordinal Punk sold for 10.5 BTC or nearly $215,000 – about 2x the floor price of a real CryptoPunk. The NFT is based on a rare alien CryptoPunks trait, which had recorded a sale price of around $24 million worth of crypto on Ethereum in the past.
NFT collector and investor dingaling tweeted that he had purchased 7 of these Ordinal Punks for 15.2 BTC.
OnChain Monkey, a collection of 10,000 Ethereum NFT profile pictures (PFPs), inscribed its artwork on Ordinal yesterday. Now, the NFT holders on Ethereum carry their respective artwork on Bitcoin as well.
Post the announcement, the floor price of the collection on Ethereum has almost tripled, with the cheapest NFT now priced at 1.3 ETH, according to NFTPriceFloor. The project claims to be the first 10k collection inscribed on Bitcoin.
According to data from Dune Analytics, over 40,000 NFTs were inscribed on Ordinal on 9th Feb, a 100% rise over the previous day. However, because Ordinals just launched, they don’t have a marketplace such as OpenSea. Most trades are currently set as over-the-counter directly between the users.
Despite the enthusiasm, some Bitcoin maximalists have criticized the move, arguing that inscribing NFTs is not the best use of network space as it goes against the original proposition of Bitcoin to focus on financial assets. Transaction fees over the network have also spiked over the past week since Ordinal NFTs started gaining momentum.