Bitcoin NFT Ordinals Experiences Significant Downturn In Transaction And Sales Volumes
In a recent report by DappRadar, the platform for analyzing decentralized applications (Dapps), unveiled noteworthy bearish user data concerning Bitcoin NFT Ordinals. It highlighted a significant downturn in both transaction volumes and sales figures.
In terms of the transaction counts for these particular tokens, the numbers plummeted from 832,648 in May of this current year to slightly above 20,000 as of August. This constitutes a staggering 97% decline. Despite August having ten more days to go, the probability of a substantial resurgence in these metrics within the next two weeks seems unlikely, so expect the downward trajectory to be sustained heading into September.
It is worth noting, however, that the DappRadar metrics in question have received some pushback in the community. User trevor.btc on Twitter (92,400 followers) essentially claims the numbers by DappRadar are incorrect, describing the article picked up by CoinTelegraph as “misinformation”.
Regardless, the purported decline depicted by the DappRadar data wasn’t an abrupt occurrence confined to August. The metrics exhibited a gradual progression that was evident during the months of June and July as well.
As observed in the first tweet above, the meteoric surge in Bitcoin NFT Ordinals during May was substantial and instigated by the introduction of BRC-20 tokens. These tokens, referred to as such due to their analogy with the Ethereum ERC-20 standard, are fungible tokens.
The issuance of these tokens was so extensive that it led to a congestion of the Bitcoin network’s mempool and an escalation in transaction fees. The Bitcoin mempool, short for “memory pool,” is a crucial component of the Bitcoin network’s transaction processing system. It serves as a temporary holding area for unconfirmed Bitcoin transactions that are waiting to be included in a block and added to the blockchain.
Despite constituting a market worth USD 120 million, the BRC-20s failed to sustain the same level of community interest. This is evident from the statistics of June, where NFT Ordinals transactions dwindled by 60%, accompanied by a 76% drop in sales volume.
The rise of Bitcoin’s NFT Ordinals ignited a vigorous debate between advocates of the network utility and those who advocate for Bitcoin solely as digital currency. This debate escalated to the point where prominent figures within the Bitcoin community, who characterized the Ordinals protocol as an assault and advocated for the censorship of these transactions.
The decline in Bitcoin NFTs activity could be interpreted as a triumph for those dissenting against this particular utilization of the Bitcoin network. However, the future will reveal whether these adaptations applied to Bitcoin are forsaken or if they are revisited and refined at a later stage in order to recapture community interest.