The rise of Bitcoin NFT Ordinals is one of the fascinating developments on the leading blockchain in 2023. This has correlated with an increase in the adoption of Taproot to process transactions.
Driving Taproot Adoption On The Bitcoin Network
Data from Dune Analytics shows that Taproot adoption has gone from being used in less than 2% of all Bitcoin transactions to reaching a peak of 9.75% on February 10. This represents an increase of 1,000% and is largely due to the rise of Bitcoin NFT Ordinals.
These unique NFTs use the witness function in transactions to include additional data expressed in a hexadecimal system. With this, block sizes can be increased above the standard 1 MB limit to 4 MB, allowing minters to add images, audio, or even games to the NFTs.
Since the end of January, Ordinals NFT has been on the rise despite being around since December. About 53,000 of these tokens have already been issued on the Bitcoin blockchain in less than two weeks.
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According to data from Dune Analytics, February 9, 2023, represented the day with the most ordinals minted, with about 21,000 new tokens. Most of them (20,895) included images; there were also 136 videos, two applications, and two audio files, while the rest only had text.
Bitcoin Taproot And The NFT Debate
In 2021 Bitcoin underwent a major update known as Taproot, which improved scalability and privacy for Bitcoin users. With Taproot, Bitcoin users can spend less time and resources verifying transactions, and it supports smart contracts and other sophisticated layers of Bitcoin.
Taproot is expected to impact how people use and interact with Bitcoin significantly, and several projects are already utilizing the technology. It is expected that Taproot adoption will significantly increase the use of NFTs.
By allowing users to transfer ownership of digital assets quickly, Taproot makes it much more convenient for people to engage in NFT transactions. Additionally, Taproot makes it possible to create more sophisticated smart contracts, which could lead to more advanced NFTs. Furthermore, the increased privacy provided by Taproot will likely make NFTs more secure and trustworthy.
Nevertheless, the rise of Ordinal NFTs has not been without debate. Critics argue that an increase in the number of transactions on the Bitcoin network will lead to clogging and a rise in transaction fees. Beyond the debate, Ordinals NFTs are not affecting the Bitcoin network, and their adoption is expected to rise in the coming weeks.
2023 has been a positive year for Bitcoin, with its price resurgence a major talking point in the financial ecosystem. The leading cryptocurrency moved from $16,500 to a year high of $24,000, with the market sentiments currently bullish.
At the time of writing, Bitcoin is trading around $21,700, down 7% in the last week.
Featured image from Unsplash.com, charts from TradingView.com