A fully-audited marketplace for Ordinals NFTs is now available on Magic Eden. Through the popular platform, NFT traders will be able to list, buy and sell over 70 Ordinals collections, with Magic Eden also integrating support for Bitcoin wallets Hiro and Xverse. 

Bitcoin NFTs reach Eden

“Ordinal digital artifacts exist on-chain, never off-chain, and are totally immutable, meaning they cannot be altered in any way,” said Magic Eden. 

“Add the security aspect of BTC & the decentralization of its nodes, and you get the ultimate home for true digital collectibles.”

Ordinals has been quite the hit since it was introduced in January by Bitcoin core contributor Casey Rodarmor. The protocol effectively lets users ‘inscribe’ imagery, text and even video games onto individual satoshis, turning currency into NFTs.

According to Dune Analytics there have been 571,384 inscriptions as of March 22, equating to over 107 BTC ($3m) in fees.

Magic Eden, which was valued at $1.6bn last June, now supports trading of NFTs tokenized on the Bitcoin network, Solana, Polygon and Ethereum. The most popular Ordinals collection at the time of writing is BTC DeGods, with a floor price of 1.033 BTC. The collection previously lived on Solana and the public mint on Bitcoin sold out in just three minutes.

This BTC DeGod just sold for 3.52 BTC ($100,000). pic.twitter.com/RxkREokVFb

— Frank (@frankdegods) March 22, 2023

Instead of smart contracts, Magic Eden will facilitate permissionless swaps of Ordinals using partially signed Bitcoin transactions (PSBT) as the core technology. The platform also revealed that it will open source its PSBT signing library to help builders new to the space.

As for royalties, the marketplace acknowledged that “there is very little tooling and no secure and trustless enforcement solutions” in the current ecosystem. Consequently, Ordinals will launch with no royalty support for the time being.

The company confirmed it was “actively looking into the development of an on-chain, permissionless royalty standard” and is “committed to working with creators and the greater community.”

Magic Eden isn’t the only show in town: another NFT marketplace, Gamma.io, has launched its own trustless marketplace complete with a no-code creator launchpad and API infrastructure. In its March 20 press release, Gamma said it had already “assisted creators in producing over 30,000 inscriptions on Bitcoin.” 

Other Ordinals marketplaces, such as ORDX and Generative XYZ, have spun up, give traders even more options to participate in the evolving BTC NFT ecosystem.

BTC NFTs: Good or bad for Bitcoin?

The arrival of BTC NFTs has caused some division in the Bitcoin community. While proponents argue that Ordinals brings more financial use-cases to Bitcoin and drives up demand for block space, others are uncomfortable about the financial degeneracy of NFT flipping arriving on the network. 

One member of the latter camp is Bitcoin core developer and Blockstream CEO Adam Back, who referred to the “sheer waste and stupidity of an encoding” back in January. 

Despite the polarization, Ordinals has been one of the most-talked about NFT projects of the year so far. And fears of skyrocketing transaction fees have proved somewhat unfounded – daily fees peaked in mid-February and haven’t come close to returning to those levels. 

Source: Dune Analytics

Although various media can be embedded in satoshis, including apps, videos, and audio, the vast majority of inscriptions thus far have been text or images, such as memes.

According to Magic Eden, its launch of an Ordinals marketplace “contributes to the culture of trust, security, and decentralization that is synonymous with the blockchain” and remains “true to the principles that underpin the technology.”

Don’t expect the arguments to die down anytime soon. In the meantime, coveted Ordinals NFTs will continue trading hands for appreciable sums. While it’s early days for the project, it shows no signs of slowing down.

When software engineer Casey Rodarmor launched the Ordinals protocol three months ago, the NFTs market had lost steam from its 2021 peak. Now, the protocol has triggered a lot of interest, with crypto enthusiasts embedding a total of 385,000 “inscriptions” on Bitcoin.

Known as Ordinals, the ‘inscriptions’ are Bitcoin’s own version of non-fungible tokens (NFTs). Of the total inscriptions to date, 200,000 are image files and over 150,000 based on text, and 17, 000 are apps, according to Glassnode Market Intelligence, as reported by Reuters.

Also read: New Pokémon Hire Suggests Gaming Giant is Eyeing NFTs, Metaverse

Ordinals sales reach millions

Rodarmor launched Ordinals on the Bitcoin mainnet on January 21. The new protocol uses what he calls “inscriptions” to create and store NFTs on the network. Ordinals are created by adding things like text, audio or images on the Bitcoin blockchain.

He said the inscriptions are made on the smallest Bitcoin unit known as a “satoshi,” or “sats,” to create unique and “true digital artifacts [that are] decentralized, immutable, always on-chain, and native to Bitcoin.” The NFTs can be held and transferred across the network.

Several Bitcoin NFT projects have emerged ever since. It includes Bitcoin Punks, BTC Machines, Pixel Pepes and others.  According to the Reuters report, NFT traders around the world are back in the money. Others have made millions of dollars from the trade of Ordinals. One such entity is Yuga Labs, creator of the popular Bored Apes NFTs.

The company created a collection called TwelveFold. It is a limited edition and experimental collection of 300 generative art pieces inscribed onto satoshis on the Bitcoin network. Yuga announced it made $16.5 million, or 736 BTC, from the sale of 288 images in the collection.

“These pieces represent a complete art project and will not have other utility or interact with or be related to any previous, ongoing, or future Ethereum-based Yuga projects,” it detailed.

TwelveFold inscriptions: Yuga Labs

It’s not just Yuga Labs cashing in on Ordinals. Other Bitcoin NFTs that have fared pretty well on the market range from JPEGs of rocks to crowned shadowy images that have sold for $213,845 and $273,010 respectively, according to data from Galaxy Digital Research.

Growing Bitcoin NFT interest

Galaxy expects that the total value of Bitcoin NFTs to reach $4.5 billion by 2025, building on growth already established by Ethereum-based NFTs.

In the shadow of the Blur against Opensea conflict, “Ordinals are quietly having their own marketplace wars,” said the pseudonymous on-chain analyst Domodata. In late February, volume reached 1.5 million on the Ordinals Market platform alone.

The exchange “is using existing Ethereum infrastructure [emblem vaults & reservoir] whilst the others are embracing novel Bitcoin native solutions. As it stands, volume is roughly split between the chains,” the analyst observed.

At the beginning of March, total marketplace volume for Bitcoin NFTs surpassed $6.1 million, with around 10,000 unique users, per Dune Analytics data. By comparison, it took OpenSea, the biggest marketplace for Ethereum-based NFTs, 14 months to achieve similar volume.

In the shadow of the Blur vs. Opensea conflict, Ordinals are quietly having their own marketplace wars. 1/x pic.twitter.com/pWkZgjR0le

— domo (@domodata) March 5, 2023

In total, NFT sales – excluding Ordinals – amounted to $1 billion last month, up more than 200% from $324 million in November, according to CryptoSlam. However, the figure is still a but a fraction of the $5 billion recorded in January last year and $2.7 billion in May.

Despite joining the party late, Ordinals have proved a hit with collectors. As per Glassnode data, Bitcoin non-fungible tokens now represent 7% of the total number of transactions on the Bitcoin blockchain.

Nightmare come true

The growth is a nightmare come true for Bitcoin fundamentalists, who worried that Ordinals could lead to congestion on the Bitcoin network as the NFTs compete with normal financial payments for block space. The worry has become reality.

Ordinals have caused a significant surge in the usage, fees, and storage space of the Bitcoin network. Proponents consider this “a major breakthrough for the Bitcoin application tier and can shift the narrative from being solely a ‘store of value’ to more practical use cases.”

The average cost of sending a transaction over the Bitcoin blockchain has spiked from $0.97 on Jan. 25, just days after the Ordinals launch, to over $2.40 as of Mar.15, according to data provider Ycharts. The numbers reflect the increased trade in Ordinals.

Further data from Blockchain.com shows that the seven-day average confirmation time for Bitcoin transactions rose to more than 186 minutes in late February, a peak last seen in November following Bitcoin’s selloff. The number averaged 12 to 35 minutes in January.

Bitcoin avg.transaction fees: YCharts

Utilizing the Bitcoin Taproot upgrade of 2021, Casey Rodarmor emphasized that his Ordinals protocol posed no threat because it does not require “any changes to Bitcoin” to create a non-fungible token on the network. But not everyone is thrilled about the new kid on the block.

Ordinals face resistance

There has always been questions on how Bitcoin would handle huge traffic if non-fungible tokens and other decentralized applications launched on the blockchain. Fundamentalists argue the cryptocurrency was meant to be used only for payments.

Any use of the network outside of financial transactions detracts from the original vision of the pseudonymous Bitcoin founder Satoshi Nakamoto, they say. Prominent Bitcoin core developer and Blockstream CEO Adam Back described Ordinals as “crap” and urged miners to censor the NFT-like items as a “form of discouragement.” That tweet was later deleted.

In 2010, Satoshi Nakamoto responded to a question on whether Bitcoin should be used for non-financial purposes with an emphatic “No”. There are no quick answers as to how NFTs on Bitcoin will develop, or to what extent they could fracture the community. We’ll see.

NFT marketplace Blur has become the highest-generating trading volume platform in the digital collectibles space over the past three months. The platform surpassed OpenSea, the largest NFT marketplace by all-time trading volume, in December 2022. 

During the last month of the worst year in decentralized finance (DeFi) history, Blur saw approximately $364 million in Ethereum NFT trading volume.

Within the same period, OpenSea recorded a volume of around $169 million. In simple mathematics terms, NFT traders poured about $196 million more into Blur than OpenSea.

Since Ethereum is the largest blockchain by all-time sales volume, positively skewed activities towards Blur rather than OpenSea have raised a few eyebrows in the digital arts sector. 

Blur cements the top spot 

While the New Year has been billed by many analysts as a year of recovery for several sectors of the crypto economy, the NFT space has been the best-performing category on an industry-wide scale. 

The total trading volume stood at roughly $729 million and Blur had the lion’s share with approximately $325 million (which is represented by 45%). OpenSea’s volume, by comparison, was $241 million during the first 31 days of the year.

During its first full month as an NFT marketplace, OpenSea surpassed Blur by bringing in $146 million in trading volume compared with Blur’s $114 million. As of March 2023, Blur had seen increased interest buoyed by the airdropping of its novel token BLUR which culminated in a trading volume of around $1.1 billion month-to-date.

Its closest competitor at the moment had a volume which was more than three times lesser than Blur, as illustrated by the following image.

The Block

According to DappRadar, activity on Blur increased by 142% from October 2022 to January 2023 which led to the NFT marketplace reaching an average daily unique active wallets (UAW) of more than 3,000.

Blur reached a daily volume high of around $99 million on Feb. 19 through the activities of more than 16,000 UAWs involved in over 43,000 transactions. 

DappRadar

Blur’s new token 

While Blur has become the latest threat to OpenSea’s dominance of NFT trading volume, the latter has seen stiff competition before from X2Y2 – a marketplace launched in February 2022. 

During 2022, X2Y2 surpassed OpenSea for several months but its monthly volumes of $55 million (December 2022), $93 million (January), and $53 million (February 2023) has been dwarfed by the metrics of Blur.

The latter’s eponymous new token  was launched in the second month of the year and appeared on the crypto price tracker CoinMarketCap on Feb. 14. 

After opening and reaching a peak price of $4.5 on the same day, BLUR plunged to a new low of $0.4318 and closed the day at $0.6531.

On its opening day as a tradable asset, BLUR’s trading volume surpassed $450 million. As of Feb. 24, traders have cashed in their gains, and the token has shed more than 90% of its value.

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