Ordinals Protocol: Transforming Bitcoin Mining and Revenue
The Ordinals protocol has instigated a notable transformation within the Bitcoin ecosystem, transcending beyond digital collectibles and significantly impacting a vital sector: the miners.
Impact of Ordinals on network activity
Since its inception in December 2022, Ordinals has triggered a substantial upturn in earnings for Bitcoin miners. By integrating NFT transactions into the Bitcoin blockchain, it has spurred a surge in user engagement, resulting in escalated transaction fees. Over a span of just two months, miners—crucial in processing and validating blockchain transactions—have amassed nearly $600,000 from NFT transactions facilitated by Ordinals.
The average transaction cost has surged to over $37, reminiscent of the peak during the 2021 bull market, significantly augmenting miners’ revenue compared to the previous range of $1-$2.
60% rise in Bitcoin miners’ revenue
Ordinals’ popularity has not only lifted mining revenue but also seen a broader uptick in total miner earnings on the Bitcoin blockchain. The fourth quarter witnessed a substantial 60% surge in total miner revenue, soaring to $2.5 billion, marking the highest figures since early 2022 as per Coin Metrics data.
The impact of Ordinals goes beyond financial metrics, sparking discussions about Bitcoin’s energy consumption, regulatory implications, and its shift from a digital currency to a multi-dimensional blockchain platform. This evolution challenges the conventional perception of Bitcoin within the community.
Amidst these shifts, miners find themselves at the forefront, navigating the opportunities and complexities presented by Ordinals’ integration. Their pivotal role in the evolving landscape underscores their significance within the blockchain community.
