Since Bitcoin NFTs, or Ordinals, were introduced in December, some have hailed them as the next big thing for the emerging non-fungible token space—and a positive evolution for the Bitcoin network.
Others aren’t convinced.
On Tuesday, the biggest cryptocurrency exchange in the world, Binance, endorsed the Bitcoin NFTs by announcing that the Binance NFT marketplace would start supporting the tech sometime in May.
“We believe things are just getting started here and can’t wait to see what the future holds in this space,” Binance’s head of product, Mayur Kamat, said in a statement.
Ordinals are similar to other NFTs in that they allow text, images, audio, and other media to be tracked on the blockchain. But unlike other NFTs that may point to outside servers that store the media they represent, Ordinals fully exist on the blockchain, with the media “inscribed” directly on a Satoshi, the smallest denomination of a Bitcoin.
Binance also said it will make it simple for users to buy and sell a Bitcoin NFT “inscription” by letting them do so from their Binance accounts rather than a separate inscription-compatible wallet.
Some Bitcoin supporters have said Ordinals are a good way for the network to expand beyond purely financial use cases. Still, some on Crypto Twitter aren’t happy about the growing popularity of Bitcoin NFTs, citing network delays caused by the increase in transactions.
$BTC#blockchain is struggling with enormous amount of transactions. After Aprils update of BRC-20 on #Bitcoin Ordinals, a lot of tokens were created and messed the whole network.
— Crypto Sarah ®️ ( Beware Scammers ) (@sarahparker345) May 8, 2023
Binance is joining rival NFT marketplace Magic Eden, which was one of the first mainstream marketplaces to support Ordinals, and quickly became a go-to destination. It had recorded almost 2,300 transactions by midday Wednesday, according to a dashboard on Dune. The increased popularity of Ordinals comes as developers on other networks including Solana have challenged Ethereum’s dominance in NFT transactions with new projects and experiments like xNFTs.
Bitcoin transactions have exploded on the network recently, boosted in part by Ordinals. In early May, the network recorded more than 680,000 daily transactions, the most ever. The fees to record a new transaction on the Bitcoin network have skyrocketed to $20 from just under $3 earlier this month, according to BitInfoCharts.
This is similar to Ethereum, where an increase in DeFi transactions or NFT trading can make network fees very expensive. Although ordinals are still a relatively niche use case for Bitcoin, we are already seeing their effects on the network, with expensive and slow transactions.