There have been some concerns over the launch of Ordinals on the Bitcoin blockchain. Experts fear NFTs and other files will flood the blockchain and increase transaction fees. However, there are also many reasons to embrace this change rather than oppose it.
Ordinals are the talk of the town in Bitcoin circles. It appears someone [finally?] figured out how to properly store files on the Bitcoin blockchain. As a result, the network blocks get fuller by “exploiting” the Witness signature space in every block. The development was initially scrutinized, although some people have come around to the idea.
Fuller and more giant Bitcoin blocks wouldn’t necessarily be ideal. As such, the occupation of Witness space per block will remain a hot topic for the foreseeable future. Per statistics shared by Pierre Rochard, Ordinals now take up roughly 50% of the space. That means many NFTs are generated on the network, although the concept also applies to other file types.
Even so, one must wonder whether that 50% space occupation is bad. Overall, block space utilization has spiked a bit since Ordinals came to light. There is always some initial excitement over such developments, although the long-term viability of these NFTs remains uncertain. However, Rochard points out that higher utilization doesn’t lead to a higher median fee rate.
It may still be early to conclude the fees. However, it appears Ordinals’ initial “impact” isn’t as terrible as people expected. That situation may change, but it isn’t much of a concern for now. The actual impact will be noted when Ordinals start crowding out “normal” network transactions. That is, assuming that will ever happen.
In addition, the higher block utilization will lead to an additional Bitcoin chain growth of 210 GB per year. That may be a problematic aspect for everyone running a full network node. However, storage space becomes cheaper over time, and the chain will not get “enormous” either. However, processing the extra data may be tricky if one has slow internet connectivity.
A new pull request has been put forward to ensure pruned nodes remain viable regardless of Ordinals. In addition, the proposal aims to ensure these nodes don’t download witnesses (for assumed-valid blocks). There is a lot to figure out regarding this proposal, but developers want to allow for innovation.
Udi Wertheimer also weighed in on the debate, although in a more positive tone than some expected. He expects Ordinals / Bitcoin NFTs to become successful and increase miner revenue. In addition, there will be a higher demand for Bitcoin developers, and podcasters may get new sponsors. So it doesn’t appear there are any losers in this equation, assuming a viable ecosystem is created.
Furthermore, NFT artists like Lucho Poletti favor the concept of minting and issuing NFTs on the most secure blockchain in the world. Ordinals can be another mainstream use case for Bitcoin, a concept that is rarely considered. Moreover, these are traditional NFTs. Instead, the project facilitates “inscriptions” to create true digital artifacts that are always on-chain.
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