Ordinals Are Positive For The Bitcoin Network, Result In An Increase Of Bitcoin Miner Fees

Key Points:

• Ordinals can potentially increase miner fees and promote a development-oriented community within the Bitcoin network.
• The article compares ordinals to Ethereum’s ERC721 standard and suggests that ordinals are a simpler alternative for a straightforward digital asset.

Grayscale’s article explores how ordinals benefit the Bitcoin network by increasing miner fees and promoting a development-oriented community.

Grayscale has published an article discussing the potential benefits of ordinals for the Bitcoin network. According to the article, ordinals could increase Bitcoin miner fees and contribute to a cultural transformation within the Bitcoin community.

“We believe that ordinals are positive for the Bitcoin network in two key ways: resulting in an increase of Bitcoin miner fees, and potentially contributing to a cultural transformation within the Bitcoin community.”

Grayscale wrote

One of the largest open issues related to Bitcoin’s economic model is the security budget, which is the concern that once all new tokens have been mined, miner rewards derived from transaction activity may eventually prove insufficient to motivate miners to maintain an adequate hash rate for securing the network.

The advent of ordinals has led to an increase in total fees paid to miners, which could potentially establish a sustainable baseline level of transaction fees to incentivize miners, thereby ensuring continued network security throughout the lifetime of the Bitcoin network.

Additionally, the emergence of ordinals could promote a development-oriented community and culture in support of the Bitcoin network. The article suggests that ordinals have the potential to attract new users who may not have previously considered using Bitcoin. This renewed excitement could help counter criticisms of Bitcoin as a relatively stagnant community and blockchain.

The article also compares ordinals to Ethereum’s ERC721 standard, which has been adopted by some of the most well-known NFT collections on Ethereum. While Ethereum NFTs account for nearly 90% of the total NFT market share, ordinals could be an appealing alternative for those seeking a straightforward digital asset on the most established blockchain available.

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