Referred by many as ‘blockchain spam’, Ordinal minting involves the creation of Inscriptions and BRC20 tokens embedded as extraneous information in bitcoin transactions. This offers zero advantages over altcoins or NFTs besides bragging rights that it is ‘on bitcoin’.
These transactions take up a lot of block space, and resulted in bitcoin fees spiking last December. And now they are back, as its users fought to inscribe ‘special sats’ on the halving block.
Added to this, a new bitcoin inscription called Runes was launched right on the bitcoin halving. Rune names are granted on a first-come first-serve basis, causing a land rush for the best names. This has resulted in a lot of on-chain activity and record breaking Bitcoin transaction fees.
Who wins in this exchange? The miners, of course. According to Clarkmoody, 9 of the 10 most profitable blocks ever were mined today. Value is block reward in USD.
With the 2nd most rewarding block ever being the 2024 halving block at height 840000, raking in 40.7 btc worth $2.6 million USD, comprised of $200k block reward, and $2.4m in transaction fees.
Who loses the exchange? Sadly it’s us, the users competing for blockspace and facing some of the highest transaction fees we’ve ever seen. Right now fees are ~700 sat/vbyte, costing over $60 for a simple transaction. This is down from earlier today, when fees were above 1000 sat/vbyte and $100.
This Ordinal hype cannot last. The halving is over, and even if there was resellable value on a transaction in the halving block (which I strongly contest for a variety of reasons), the same could hardly be said for a random block a few hundred blocks after.
Runes take up less space than ordinals, so hopefully once the initial rush is over, hopefully they won’t be too much of a nuisance.
It’s likely we haven’t seen the last of Rune and Ordinal spam on the blockchain. But just like ICOs and NFTs, BRC20 tokens and Inscriptions should eventually play out as supply exceeds demand.
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