As the number of Bitcoin-based ordinal signups approaches the 300,000 mark, Galaxy Digital’s research team released a report on the subject saying that the size of the non-fungible token (NFT) market acronym) created in Bitcoin could reach 4.5 billion dollars in the next two years. Galaxy researchers believe that the new use cases stemming from the enrollment trend will “drive increased interest and adoption” for bitcoin.
Galaxy Researchers Explore Possible Use Cases of Bitcoin-Based Ordinal Enrollments and NFTs
At the time of writing, there are more than 288,000 Ordinal enrollments hosted on the Bitcoin blockchain, as the trend has increased significantly since the beginning of February 2023. Four days ago, the number of ordinal enrollments reached 200,000, and on the same day, Yuga Labs, the creators of the Ethereum NFT Bored Ape Yacht Club (BAYC) collection, revealed that it had minted a collection of 300 inscriptions to auction off the artwork. Six researchers and executives from Galaxy Digital published a report on the subject and assessed that it is possible that “registration (and) ordinal-based” Bitcoin NFTs could reach $4.5 billion by 2025.
“The inscriptions significantly expand the design space for Bitcoin,” the Galaxy report says. “The addition of sizable data storage with strong availability guarantees opens up a variety of use cases, many of which are just beginning to be explored, including new types of decentralized software or Bitcoin scaling techniques. However, even the NFT use case alone has the potential to dramatically expand the scope of Bitcoin’s cultural impact.”
The Galaxy researchers note that the ecosystem is still very young, but note that “the infrastructure is emerging rapidly.” One of the key components of the technology will be wallets, according to the Galaxy article on the subject of enrollment. In addition, the study delves into the different collections minted in recent times, such as Taproot Wizards, Bitcoin Punks and Ord Rocks. The document mentions the Openordex marketplace, which leverages “partially signed bitcoin transactions (PSBT) to enable trustless listing and purchase of signups.” In addition, the Galaxy researchers also discuss the controversy related to ordinal inscriptions.
The researchers note that they believe that technical arguments are already largely avoided, and that a social movement to stop ordinal inscriptions is unlikely to occur. “Ultimately, because token data can be removed and old data can be avoided in initial block download (IBD) by allowing to assume valid = 1, we see that the technical arguments against registrations are already are mostly mitigated,” the Galaxy researchers wrote. “On the narrative side, ordinal enrollment transactions are valid for all nodes in the current Bitcoin network. A social movement would have to emerge to make changes to Bitcoin such that ordinal signups are no longer possible to change that, an outcome we consider unlikely.”
The Galaxy study also points out that unlike Ethereum, due to the lack of smart contract technology within Bitcoin, NFT royalties are also unlikely. The researchers believe that the criteria for first-order ordinal listings will be “dynamic” and that the market “could see significant secondary volume.” While the study mentioned a number of tools, Galaxy believes that the ordinal enrollment market infrastructure will be developed in the second quarter of this year. As a result of all these trends, layer two (L2) or other types of Bitcoin scaling solutions will move to the forefront of development.
“The emergence of signups and the low probability that the functionality will ever be removed from the project has the potential to evolve Bitcoin once again, driving new use cases, interest, and adoption,” the Galaxy study concludes.
What do you think about the potential impact of ordinal signups on the future of Bitcoin and the broader adoption of NFTs? Share your thoughts in the comments section below.
image credits: Shutterstock, Pixabay, Wiki Commons, Sergey Nivens, Galaxy Digital Report,
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