Robert Steinadler, 18 days ago
Michael Saylor is the most reckoned Bitcoin maximalist worldwide. His company, MicroStrategy, is the largest holder of Bitcoin, excluding exchange and investment businesses. Many critics have argued that Saylor is biased because of his massive exposure to BTC. However, even though he is basically all-in on Bitcoin, his opinion still provides food for thought. Recently, Saylor visited a podcast and argued that Ordinals are a catalyst for Bitcoin adoption.
Is it possible that Ordinals are helpful, and why are so many people upset about them?
Saylor meant that Ordinals are indeed what people like to see on Bitcoin. The protocol enables users to mint, transfer and deploy nonfungible tokens. With the so-called BRC-20 token standard, even regular fungible tokens can be minted on the Bitcoin blockchain.
Pepe Coin (PEPE) has seen explosive growth since its inception just a few weeks ago, and while many critics argue that this is just a pump-and-dump scheme, meme coins are entering the Bitcoin blockchain. Saylor may be right, and Bitcoin is adding a use case that was long missing. He argued that everything that drives people to Bitcoin is strengthening the mother of all crypto assets, including the banking crisis and Ordinals.
On the other hand, tokens generated with Ordinals are not the same as ERC-20 tokens on the Ethereum blockchain. They are not defined by a smart contract, and trading them is inconvenient because the demand can only be met directly by the seller. This makes an order book or any other more complex form of trading impossible.
The idea behind on-chain transactions is that senders must pay a transaction fee. The best-case scenario is to include a transaction in the next block, which means it gets confirmed after 10 minutes on average. Currently, users must pay $25 or even more to confirm a transaction within a reasonable time.
Some spectators argue that now is the time to adopt the lighting network. Lightning offers almost instantaneous transactions with minimal fees. Even though a lot of infrastructure for lightning has been established, many services still need to integrate it.
One thing is for sure, miners are rejoicing over Ordinals since high fees boost their revenue after a harsh bear market in 2022. They are the only ones profiting from the current situation, while regular transactions take a long time or are expensive.
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