Bitcoin Miners Make $600,000 in BTC Fees from Controversial NFT Protocol.
Since the introduction of Ordinals, a new non-fungible token (NFT) protocol that uses Bitcoin as its foundation, miners have earned almost $600,000 in transaction fees. The protocol has led to a significant surge in user activity and an increase in non-zero Bitcoin addresses.
According to Dune Analytics, the protocol has resulted in the inscription of 81,468 Ordinals into the Bitcoin network. Ordinals are Bitcoin NFTs that use the Taproot soft fork to record data in the witness section of BTC transactions. The protocol was designed by Bitcoin Core contributor Casey Rodarmor to number individual satoshis on the network.
Despite the controversy surrounding its launch, Ordinals have enabled miners to generate a total of $574,000 in transaction fees within just two months. The protocol has increased the number of active users with non-zero Bitcoin balances on the network, creating more pressure on the market without significantly increasing transaction fees.
Glassnode, a blockchain data platform, noted that the emergence of Ordinals represents the first time in Bitcoin’s history that the network has been used for non-monetary purposes. Furthermore, the protocol has caused some competition for block space demand, with inscriptions occupying almost 50% of the space.
The upper range of mean block size has also increased from 1.5-2.0MB to between 3.0-3.5MB, and Taproot adoption and utilization have increased to 9.4% and 4.2%, respectively. While the Ordinals protocol remains controversial, it has contributed to the growth of the Bitcoin network and created new revenue streams for miners.