On-Chain Rhapsody for Bitcoin NFTs
Since the sudden plunge of Bitcoin on the 3rd, it has fluctuated and consolidated in the range of 22-22.5k in the past two days, waiting for the next market shock. At present, this position is still below 23k after the second stage surge on January 22. This means that the short-sellers who came to their senses after seeing the strength of Bitcoin, turned around and rushed into the market, took a roller coaster ride in February, and now they should be in a state of loss.
Yes it's right. The market always evolves in the direction that makes the most people lose money. To be a minority is to stay different.
Bitcoin's native NFT on the chain, the so-called Ordinal Inscription, just started in March, and the minting volume quickly exceeded the 300,000 mark from the 200,000 mark at the end of February. At the same time, the single-day minting volume on March 1 was as high as 24,800 pieces, breaking the single-day minting volume record of 21,800 pieces on February 9.
It's really one wave was just leveling, and another wave is rising.
20230306-01 Figure: Minting volume data of Bitcoin ordinal inscriptions
Seeing that the small climax in February gradually cooled down by the end of the month, a higher climax was quickly set off in March.
This is, very NFT.
Yuga Labs, the operating company behind "Bored Ape" (BAYC), which was born in the bull market in 2021 and quickly grew into the world's top NFT project, also acted decisively to launch "TwelveFold" on the Bitcoin chain.
20230306-02 Figure: Yuga Labs' Bitcoin NFT work "TwelveFold"
The auction starts 3PM PST March 5 and ends 3PM PST March 6.
In the past, after Bitcoin created a bull market, when it was resting, the stage was handed over to various altcoin projects.
This time, Bitcoin was not absent.
Everyone has seen how much the “cryptopunks” that were given away for free in 2017 turned out to be worth a lot. Everyone also knows how the cypherpunk tribute work "Bored Ape" (BAYC) born in 2021 took the high-speed rocket from digital art to PFP narrative transition and soared into the sky.
This may be used as a profile to understand the popularity of Bitcoin NFT at the bottom of today's bear market.
Everyone wants to seize the opportunity to plan the next "cypherpunk" or "bored ape" in three years' time.
However, the market is also far more noisy than ever.
Most people, and most of the NFT works they hold, will inevitably end up in zero.
The minting climax of the Bitcoin Ordinal Inscription has consumed more than 65 Bitcoins in value. Calculated at the current price of 22k, it is about 1.43 million US dollars, about 10 million RMB. From February 6th to March 6th, it is considered as a month's amount.
Of course, this number is still very small compared to the block rewards given to miners by the Bitcoin system.
One month's block reward is about 6.25 6 24 * 30 = 27000 BTC. 65 pieces, accounting for less than 2.5%.
In fact, the current actual block fee accounts for about 1.78%.
But in any case, in the cold winter when transactions on the chain are extremely inactive, it is a comfort to the miners to have such an active payment of handling fees, isn't it?
Bitcoin NFTs are different from NFTs on Ethereum. For most NFTs on Ethereum, including "Bored Ape", its content - that is, the picture itself - is not stored on-chain, but in other storage systems off-chain. This also means that if that storage system fails (or is tampered with), the contents may be lost.
This has given birth to some projects that speculate on storage narratives (such as Filecoin or Arweave).
Bitcoin’s ordinal inscription, the content of which — including the image itself — is stored on the Bitcoin chain. Since Bitcoin adopted the "Segregated Witness" (segwit) expansion plan in 2017, its block size can be expanded to 4MB. This size is more than enough for most images.
This also means that all pictures have to bid for this mere 4MB of space.
Some people have criticized that the circulation of Bitcoin NFT will be greatly restricted because of this, and it cannot flourish like Ethereum NFT.
However, the reverse understanding of this statement is that Bitcoin NFT is therefore more scarce. Only the works that are willing to pay a higher price will be minted on the chain.
Another critical voice is just the opposite. Critics believe that Bitcoin's block space is an extremely precious and scarce resource, how can it be used to pile up such small messy pictures?
What Bitcoin is going to be is electronic gold, a better currency. The precious block space should be used for the storage of the most valuable data - transaction data.
The interesting thing is that, as Bitcoin has always been treated, it has always received criticism from two directions and diametrically opposite directions.
On the one hand, they think it doesn't store enough small pictures, so it's bad.
On the other side they thinks it stores too many small pictures, so it's bad.
Left is not right. Right is not right either.
Be yourself, don't listen to other people's gossip.
Bitcoin does not take an attitude of value judging.
It simply charges by bytes, and provides block space. As for what the user deposits that he thinks is valuable, Bitcoin does not make value judgments.
However, before the expansion of Bitcoin, some people used OP_RETURN to store colored coins and even small pictures (the predecessor of today's NFT). Later, the core developers believed that it was abusing the function of Bitcoin and occupying the precious transaction book resources, so they modified it. The code limits the additional data length of OP_RETURN, extinguishes the small flame of "innovation", and also contributes to the birth of Ethereum.
This time, it was the core developer's expansion and upgrade, segwit + taproot, which once again opened Pandora's box.
Ordinal inscriptions, Bitcoin NFT, move forward in controversy.
How will the story be different this time?
Extra: The full book of "History of Bitcoin" has been released on leanpub https://leanpub.com/history-of-bitcoin
(Disclaimer: The content of this article does not constitute any investment advice. Cryptocurrency is a very high-risk product, and there is a risk of zeroing at any time. Please participate carefully and be responsible for yourself.)