The crypto industry is still growing and evolving, as you can tell from the number of upgrades launched over the last couple of years. For example, the Ordinals Protocol, which was released in January 2023, lets users send and receive Satoshis (SATS). This project has increased user activity on the blockchain network and has led to an increase in value, but what else does the Ordinals Protocol mean for Bitcoin? Continue reading to find out.
How Do Ordinals Work?
The Ordinals Protocol lets users trade in Satoshi, which is the smallest denomination of Bitcoin. Each SATS can have data assigned to it including video, audio, JPEGS, or text. When new SATS are inscribed, the Ordinals Protocol creates a distinct address using the blockchain network.
This unique address acts as a seed phrase, which allows new nodes to be created and hooked up to the public Bitcoin network. Once the asset address is received by a user, it can be transferred using private keys – just like with regular crypto assets.
Do Ordinals Make Bitcoin a Good Investment?
The crypto market saw an enormous decline in 2022, but things started to look up again in January 2023 as Bitcoin broke $25,000 once more. According to Fortune Crypto, Ordinals are responsible for the increase in value.
If enough investors back the Ordinals Protocol, the value of Bitcoin will likely continue to increase, which means now might be the perfect time to increase your Bitcoin investments. However, before you do, use this if I bought bitcoin calculator, which will convert SATS to a number of fiat currencies.
Bitcoin Ordinal Benefits
Enthusiastic crypto users are drawn in by the potential applications of Bitcoin Ordinals. For example, they allow NFTs to be stored on the Bitcoin blockchain, which is a big deal because it’s the most secure network in existence.
Secondly, the emergence of Bitcoin Ordinals helps to improve the transaction security of the Bitcoin network, as each inscribed Satoshi has a unique identity, which makes it even tricker for would-be hackers to break in.
Finally, with the popularity of Ordinals on the rise, there’s growing interest within the community to make more Bitcoin-based Apps.
What About Challenges?
The growing popularity of Bitcoin NFTs is one of the primary issues, as it’s increasing the transaction fee and causing issues with scalability, which will only be solved once there’s more liquidity within the market.
The final concern surrounding Bitcoin Ordinals is privacy, as they can be tracked by anyone because they exist on the public network. However, there are third-party apps to force privacy, but this adds friction and cost to the minting process.
The Bitcoin blockchain was the first in existence, meaning it soon became stale in terms of developer and user usage. Fortunately, the introduction of the Ordinals Protocol has sparked renewed interest in the Bitcoin blockchain, and it’s led to an increase in its value. Considering how new the Ordinals Protocol is, it’s exciting to think about what comes next for the Bitcoin network.