Bitcoin inscriptions: Are Ordinals a boon or a drag on the network? – Yahoo Finance
Over the last few months, a new development came to the Bitcoin network: Inscriptions. Dubbed Ordinals, these digital assets differ from their NFT counterparts, but the results are the same. Since its inception, the Bitcoin network has seen a massive spike in traffic, not unlike what Ethereum underwent during the 2021 NFT boom.
This increased activity has led to congestion on an already crowded network sparking a heated debate about the potential impact of Ordinals on the future of Bitcoin. It also begs the question: Now the genie is out of the bottle, whats next? And, perhaps more importantly, how will the Bitcoin network cope with the on-chain strain?
At a high level, the Ordinals protocol enables users to send and receive Satoshis the smallest monetary unit of a Bitcoin, or one-hundred-millionths of one BTC that carry extra data connected to them. This data can be in the form of text, images, audio or other media. Adding data to a Satoshi is called an inscription, which is not dissimilar to NFTs.
This was all made possible with some significant upgrades to the network that have occurred. First was the SegWit update, which created a split data structure for all transactions. The second was Taproot, which allowed more data to be placed within transactions.
Unlike most NFTs on Ethereum, which usually just include a link to the media, Bitcoin Ordinals are 100% on-chain. This is a major selling point for digital assets, but it also means these digital collectibles are expensive to create and that the transactions that do so tend to be rather large. Because of this, it has made some wary about the consequences of this protocol on the network as a whole.
Ordinals have only been around for a few months, and over 3.2 million new assets have already been created in that short time. The Bitcoin network has also subsequently seen one of the largest blocks ever mined, 4 megabytes, as a direct result of Ordinal inscribing. Then there is the considerable impact these new types of NFTs have on network congestion and transaction fees, which have hit levels not seen since November 2022. This rise in transaction volume and average fees has also led to miners excluding many lower-fee transactions, raising the floor price for transacting on the network.
Story continues
A debate is currently raging about whether these Ordinals are good for Bitcoin. For one, some have pointed out that Bitcoins pseudonymous creator, Satoshi Nakamoto, didnt think Bitcoin should be used for anything other than the transaction of value. Theres also a concern that continued adoption could further clog up the network and make it even more expensive. Some have even gone so far as to suggest that this development could harm the ability of marginalized people to use Bitcoin. Considering that many developing nations are the most prolific users of the network, this could potentially affect some jurisdictions more than others.
On the other side of the debate, many feel the panic over Bitcoin Ordinals is largely unwarranted. For one, the transaction-purging mentioned before only affects the lowest fee transactions, encouraging fee competition. Additionally, while inscriptions have taken up a considerable amount of every block as of late, not long ago, most blocks were 25% to 50% empty. Arguably, Ordinals are just using resources that otherwise would be wasted.
Indeed, some schools of thought suggest adding value and utility to the Bitcoin network is essential for the networks longevity. For one, increasing the adoption of Bitcoin is vital for its legitimacy as a currency and store of value. The more people use it, the more valuable it becomes and the more stable its value can be.
However, the congestion issue still persists. Now that Ordinals have opened the Bitcoin network to new possibilities, where does it end? Arguably, a solution needs to be found. The most likely solution is some form of layer-2 infrastructure that can take the bulk of transaction processing away from the main chain. This could allow Ordinals to proliferate on the Bitcoin network without threatening transactional use cases.
One potential solution in the long term is creating a ZK-rollup on BTC, storing proofs on Bitcoin where Ordinal images are stored. This would allow increased throughput without compromising on security. This would require a change to BTC to verify the proofs, which could take years.
Another potential solution is using side chains or layer-2 solutions. For example, the Bitcoin Lightning Network has proven to handle transactions quickly and cost-effectively. Alternatively, theres the Liquid Network, which similarly acts as a means to take traffic off the main network to allow for faster, cheaper trades.
The previously mentioned solutions would all increase the throughput of BTC, but still would not provide a smart contract layer to BTC. In addition, ideally, this should be done without invoking any risky technology like centralized bridges, which lost users almost US$3 billion last year. Recent developments allow the network to act as a smart contract layer for BTC while mitigating the potential risks of centralized cross-chain bridges and poorly designed wrapped tokens. Allowing Bitcoin to become programmable can also unlock a wide range of new DeFi-related use cases, including Bitcoin or Ordinal collateralized loans and staking.
The rise of Ordinals on the Bitcoin network is undeniable, and their impact is only set to grow in the coming years as more projects tap into the same utility. But its clear that the current state of the network is not equipped to handle the influx of traffic that this may bring, and its time to face the reality that Bitcoin needs to evolve to keep up. Turning to layer-2 infrastructure may be a critical part of the solution.
Link:
Bitcoin inscriptions: Are Ordinals a boon or a drag on the network? - Yahoo Finance
- Prediction: Bitcoin Creator Satoshi Nakamoto Will Be Worth More Than Warren Buffett by the End of Summer - MSN - July 22nd, 2025 [July 22nd, 2025]
- The Mystery of Satoshi Nakamoto: The Ghost Who Invented Bitcoin - Vocal - July 20th, 2025 [July 20th, 2025]
- Prediction: Bitcoin Creator Satoshi Nakamoto Will Be Worth More Than Warren Buffett by the End of Summer - The Motley Fool - July 20th, 2025 [July 20th, 2025]
- Could Satoshi Nakamoto Become the Richest Person on Earth by the End of 2025? - BeInCrypto - July 20th, 2025 [July 20th, 2025]
- Bitcoin's Untapped Wealth Potential and the Imminent Overtaking of Warren Buffett by Satoshi Nakamoto - AInvest - July 20th, 2025 [July 20th, 2025]
- Cantor Equity Partners I (CEPO) Soars On Potential Bitcoin Deal With Satoshi Nakamoto-Linked Adam Back - - July 20th, 2025 [July 20th, 2025]
- Satoshi Nakamoto's Bitcoin Wealth Surges 8% to $129.1 Billion - AInvest - July 18th, 2025 [July 18th, 2025]
- Elon Musk Reacts to Satoshi Nakamoto's Wallet Hack Joke, Denies Being the Mysterious Bitcoin Creator - AInvest - July 18th, 2025 [July 18th, 2025]
- Bitcoin creator Satoshi Nakamoto is now worth $129 billion and ranks as the 11th richest man in the world - Times of India - July 16th, 2025 [July 16th, 2025]
- Bitcoin creator Satoshi Nakamoto is now worth $129 billion and ranks as the 11th richest man in the world - MSN - July 16th, 2025 [July 16th, 2025]
- Bitcoin Creator Satoshi Nakamoto's Net Worth Surges to $128 Billion; Mysterious Figure Challenges Warren Buffett's Spot Among The Wealthiest -... - July 16th, 2025 [July 16th, 2025]
- Who is Satoshi Nakamoto, and how has he joined the list of the worlds richest - Times of India - July 16th, 2025 [July 16th, 2025]
- Just ahead of Warren Buffett! Has Satoshi Nakamoto become the 11th richest person in the world? - - July 16th, 2025 [July 16th, 2025]
- Satoshi Nakamoto, Believed To Be Bitcoin Founder, Becomes 12th Richest Person In The World - MSN - July 16th, 2025 [July 16th, 2025]
- Bitcoin Pushes Satoshi Nakamoto to 11th Richest in the World - investx.fr - July 16th, 2025 [July 16th, 2025]
- Satoshi Nakamoto becomes 11th richest man on Earth: Who is the mysterious Bitcoin founder? - Moneycontrol - July 16th, 2025 [July 16th, 2025]
- Why is Bitcoin creator Satoshi Nakamoto unaware? No one has seen the face yet. - Insurance Khabar - July 16th, 2025 [July 16th, 2025]
- Satoshi Nakamoto Moves Closer to the Top 10 Richest Billionaires in the World - Binance - July 16th, 2025 [July 16th, 2025]
- Satoshi Nakamoto, Believed To Be Bitcoin Founder, Becomes 12th Richest Person In The World - Zee News - July 16th, 2025 [July 16th, 2025]
- Satoshi Nakamoto, who founded Bitcoin, becomes world's 12th richest person with $129-bn wealth: Report | This comes as Bitcoin hits new record highs |... - July 16th, 2025 [July 16th, 2025]
- Bitcoin creator Satoshi Nakamoto is officially the 11th richest man in the world thanks to Bitcoin! - Pintu - July 16th, 2025 [July 16th, 2025]
- Bitcoin Boom Pushes Satoshi Nakamoto Into Top 11 Wealthiest, At Nearly $130 Billion - Bitcoinist.com - July 14th, 2025 [July 14th, 2025]
- Satoshi Nakamoto is now the 11th richest person in the world - Cointelegraph - July 14th, 2025 [July 14th, 2025]
- Bitcoin Creator Satoshi Nakamoto May Soon Overtake Warren Buffett To Become Worlds 10th Richest - TradingView - July 14th, 2025 [July 14th, 2025]
- Satoshi Nakamoto becomes 11th richest person with $129 billion in Bitcoin wealth - Cryptopolitan - July 14th, 2025 [July 14th, 2025]
- Who Is Satoshi Nakamoto? Unraveling the Mystery Behind the Creator of Bitcoin - FinancialContent - July 12th, 2025 [July 12th, 2025]
- The richest mystery in history: Satoshi Nakamoto. What is his net worth today? - WION - July 12th, 2025 [July 12th, 2025]
- Will BlackRocks Bitcoin Holdings Surpass Those of Satoshi Nakamoto ? - investx.fr - July 12th, 2025 [July 12th, 2025]
- Satoshi Nakamoto: Discover the Mysterious Inventor of Bitcoin. - Red Hot Cyber - July 6th, 2025 [July 6th, 2025]
- Mysterious Bitcoin Wallet Linked to Satoshi Nakamoto Activates After 12 Years - AInvest - July 4th, 2025 [July 4th, 2025]
- Arkham: Satoshi Nakamoto address receives $20k from mystery wallet - Crypto News - July 2nd, 2025 [July 2nd, 2025]
- Bill Gates Left Behind By Satoshi Nakamoto: Bitcoin Creator's Wealth Now Eclipses That Of Microsoft Co-Founder Amid Crypto's Sharp Rebound - AOL.com - June 28th, 2025 [June 28th, 2025]
- Satoshi Nakamoto Quietly Controls 5% of Bitcoin, Becomes the 11th Richest Person in the World - TronWeekly - June 1st, 2025 [June 1st, 2025]
- Who owns the most Bitcoin in the world after Satoshi Nakamoto? - The Cryptonomist - June 1st, 2025 [June 1st, 2025]
- Bitcoin fluctuations ignite a race for wealth between Satoshi Nakamoto and the world's billionaires - - June 1st, 2025 [June 1st, 2025]
- Satoshi Nakamoto: The Loudest Silence in the History of Money - Binance - June 1st, 2025 [June 1st, 2025]
- Satoshi Nakamoto Holds Over $120 Billion in Bitcoin, Over 5% of Supply, Surpasses Microsoft CEO as 11th Richest Person - The Defiant - May 28th, 2025 [May 28th, 2025]
- Satoshi Nakamoto just got richer than Nvidias CEO and the Walmart heirs - dlnews.com - May 28th, 2025 [May 28th, 2025]
- Satoshi Nakamoto Could Be the 10th Richest Person on Earth - NFT Evening - May 28th, 2025 [May 28th, 2025]
- BlackRock is second only to Satoshi Nakamoto as the largest holder of Bitcoin - The Cryptonomist - May 28th, 2025 [May 28th, 2025]
- Satoshi Nakamoto Holds Over $120 Billion in Bitcoin, 5% Supply, 11th Richest, 1.09M BTC Holdings - The Defiant - May 28th, 2025 [May 28th, 2025]
- Satoshi Nakamoto Holds Over $120 Billion in Bitcoin, 5% of Supply, Surpassing Nvidia CEO and Walmart Heirs - The Defiant - May 28th, 2025 [May 28th, 2025]
- Satoshi Nakamoto Drops The Big Tourist Collection for SS25 Featuring New Vans Collaboration - stupidDOPE - May 28th, 2025 [May 28th, 2025]
- Satoshi Nakamoto Becomes 11th Richest Person, Holding $120B+ in Bitcoin and Over 5% of Total Supply - StartupNews.fyi - May 28th, 2025 [May 28th, 2025]
- Satoshi Nakamoto The Greatest Ghost in the History of Finance - Binance - May 28th, 2025 [May 28th, 2025]
- Satoshi Nakamoto Owns $120B in Bitcoin, Now World's 11th Richest Person - Analytics Insight - May 28th, 2025 [May 28th, 2025]
- Quantum Could Force Satoshi Nakamoto To Move His BitcoinsIf He's Still Alive - FinanceFeeds - April 23rd, 2025 [April 23rd, 2025]
- Attorney files lawsuit to unmask Bitcoin creator Satoshi Nakamoto - Yahoo Finance - April 10th, 2025 [April 10th, 2025]
- Satoshi Nakamoto has been known by US government for years, lawyer claims - dlnews.com - April 10th, 2025 [April 10th, 2025]
- Who created bitcoin (have we found Satoshi Nakamoto)? - Chris Skinner's blog - April 10th, 2025 [April 10th, 2025]
- James Murphy Attacks The U.S. Government To Uncover The Identity Of Satoshi Nakamoto. - Cointribune - April 10th, 2025 [April 10th, 2025]
- Satoshi Nakamoto Turns 50 And the Bitcoin Mystery Lives On - Cointribune - April 10th, 2025 [April 10th, 2025]
- Satoshi Nakamoto at 50, Bitcoin at Full Power: A Year in Review - The Crypto Times - April 10th, 2025 [April 10th, 2025]
- The Daily: Crypto prices plummet, Strategy's $6 billion in Q1 unrealized losses, crypto attorney sues to uncover Satoshi Nakamoto's true identity and... - April 10th, 2025 [April 10th, 2025]
- Attorney Sues DHS in Effort to Reveal the Identity of Satoshi Nakamoto - The Market Periodical - April 10th, 2025 [April 10th, 2025]
- News Explorer Does the US Government Know the Identity of Bitcoin Creator Satoshi Nakamoto? - Decrypt - April 10th, 2025 [April 10th, 2025]
- Happy Birthday, Satoshi Nakamoto, the OG Bitcoiner ! - The Crypto Times - April 10th, 2025 [April 10th, 2025]
- Crypto Lawyer Takes Legal Action Against Us Government To Reveal Bitcoin Creator Satoshi Nakamoto - FinanceFeeds - April 10th, 2025 [April 10th, 2025]
- Is That Bitcoin Founder Satoshi Nakamoto On Bengaluru Streets? What We Know - News18 - April 10th, 2025 [April 10th, 2025]
- Its time to stop theorizing about Satoshi Nakamoto - Blockworks - March 5th, 2025 [March 5th, 2025]
- Could Jack Dorsey be the mysterious Bitcoin creator, Satoshi Nakamoto? Heres what the theories suggest - The Times of India - February 27th, 2025 [February 27th, 2025]
- Satoshi Nakamoto Unveiled Bitcoin Logo on This Date 15 Years Back By U.Today - Investing.com - February 27th, 2025 [February 27th, 2025]
- Was Satoshi Nakamoto not the real creator of Bitcoin? New theories suggest it was former Twitter CEO Jack - The Economic Times - February 20th, 2025 [February 20th, 2025]
- Satoshi Nakamoto's early partner predicted Bitcoin at $10 million - TheStreet - February 20th, 2025 [February 20th, 2025]
- Jack Dorsey The Mysterious Satoshi Nakamoto? VanEck's Matthew Sigel Points To 'Key' Evidence Linking Twitter Founder To The Bitcoin Creator - Benzinga - February 20th, 2025 [February 20th, 2025]
- Jack Dorsey Silent As New Theory Ties Him To Satoshi Nakamoto - FinanceFeeds - February 20th, 2025 [February 20th, 2025]
- Who is Satoshi Nakamoto, The Creator of Bitcoin? - Decrypt - February 20th, 2025 [February 20th, 2025]
- Dorsey tied to Satoshi Nakamoto in new theory - MSN - February 20th, 2025 [February 20th, 2025]
- Is Jack Dorsey Satoshi Nakamoto, the bitcoin creator? - Fortune India - February 20th, 2025 [February 20th, 2025]
- True identity of Bitcoin creator Satoshi Nakamoto is KNOWN, crypto exec suggests& his wallet has hit sta... - The US Sun - February 20th, 2025 [February 20th, 2025]
- Jack Dorsey is Satoshi Nakamoto? New theories and emerging clues about the creator of Bitcoin - The Cryptonomist - February 20th, 2025 [February 20th, 2025]
- VanEck executive alleges that Twitter co-founder Jack Dorsey is Bitcoin inventor Satoshi Nakamoto - FXStreet - February 20th, 2025 [February 20th, 2025]
- Former Twitter CEO Jack Dorsey is Bitcoin Creator Satoshi Nakamoto, suggests new theory - The Financial Express - February 20th, 2025 [February 20th, 2025]
- There's a New Documentary About Bitcoin Inventor Satoshi Nakamoto - Decrypt - February 12th, 2025 [February 12th, 2025]
- Bitcoin creator Satoshi Nakamoto may be wealthier than Bill Gates - Cointelegraph - February 12th, 2025 [February 12th, 2025]
- Satoshi Nakamoto Still Holding $107,071,037,496 Worth of Bitcoin in Thousands of Wallets: Arkham - The Daily Hodl - February 12th, 2025 [February 12th, 2025]
- Mysterious Bitcoin Fortune Identified After 15 Years: Who Is Satoshi Nakamoto? - Binance - February 12th, 2025 [February 12th, 2025]
- Is Satoshi Nakamoto Be One of the Worlds Richest People? - Cryptodnes.bg - February 12th, 2025 [February 12th, 2025]
- Satoshi Nakamoto's Bitcoin Promise Rings True 16 Years On: Details - U.Today - January 15th, 2025 [January 15th, 2025]
- Who is Satoshi Nakamoto, the creator of Bitcoin? - Hindustan Times - January 1st, 2025 [January 1st, 2025]