In the cryptocurrency market, the biggest winner is Cosmos (ATOM) with returns of +1.0%. Cosmos is a smart contract platform designed to facilitate interoperability between different blockchains. On the other hand, the biggest losers are XRP (XRP) with returns of -2.6%, Terra (LUNA) with returns of -2.2%, and Decentraland (MANA) with returns of -1.9%. XRP is a currency, Terra is a smart contract platform, and Decentraland is an entertainment platform.
The Bitcoin community is currently facing a dilemma as some of the largest miners are either undergoing bankruptcy proceedings, getting bailouts, or restructuring debt. At the same time, many people in the Bitcoin community lament the congested and expensive state of the Bitcoin network due to the surge in popularity of Ordinal inscriptions. Ordinal inscriptions, similar to NFTs, are digital assets inscribed on satoshis (the smallest currency unit of Bitcoin) and they are enabled by the Taproot upgrade. The upgrade allows for smart contracts and the minting of NFTs directly onto the Bitcoin blockchain.
The growth of Ordinal inscriptions has been immense. Just earlier this month, the number of Ordinals surpassed three million, and the number is now over four million. In the long term, miners who are struggling financially could greatly benefit from the newfound interest in the Bitcoin blockchain. According to data compiled by user dgtl_assets on Dune, Ordinal inscriptions are now generating daily fees of around $2.7 million, with the total fees amounting to approximately $14 million.
Grayscale, a digital asset management firm, argued in an April note that the surge in fees from Ordinals is useful for incentivizing mining and securing the network. Some critics argue that Ordinals could bloat the blockchain or harm fungibility, but Grayscale maintains that they represent one of the largest opportunities for Bitcoin adoption. The firm added that the Bitcoin network has traditionally been considered a rigid blockchain ecosystem, but the advent of Ordinals has increased total fees paid to miners, potentially establishing a sustainable baseline level of transaction fees to incentivize miners.
Realistically, the surge in Ordinals could help improve miners’ balance sheets. Bailouts could also be an option, but that would centralize mining around stakeholders like Binance and Galaxy Digital. For those who are complaining, there are plenty of available solutions like Layer-2 or sidechains such as the Lightning Network or Liquid.
In summary, Bitcoiners should celebrate Ordinals and welcome the market signal that they are here to stay. It is important to weigh the benefits of network security, new mining incentives, and the annoyance of network congestion when making any decisions regarding the future of Ordinals.
Some important upcoming events include Japan’s Overall Household Spending (YoY/March) at 3:30 a.m. HKT/SGT (19:30 UTC), Australia’s Retail Sales (QoQ/Q1) at 5:30 a.m. HKT/SGT (21:30 UTC), and China’s Trade Balance at 7:00 a.m. HKT/SGT (23:00 UTC).
In case you missed it, the most recent episode of “First Mover” on CoinDesk TV discussed Bitcoin’s price hovering around $29K following the April Jobs Report and whether Central Bank Digital Currencies (CBDCs) are becoming an issue in the upcoming presidential election.
According to the Bureau of Labor Statistics report, the U.S. added 253,000 jobs in April, up from a downwardly revised 165,000 in March and surpassing economist forecasts of 180,000. CoinDesk’s executive director of global content, Emily Parker, explained why CBDCs could become a topic in the U.S. presidential election, and Mysten Labs CEO Evan Cheng and Chase White from Compass Point Research also joined the conversation.
