The Ordinals Protocol Has Caused a Resurgence in Bitcoin Development

The probability of NFTS fueling bitcoin’s next bull run cannot be ignored, the report said.

AccessTimeIconFeb 7, 2023 at 11:55 a.m. UTC
Updated Jan 26, 2024 at 2:14 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

The Ordinals protocol has triggered a revival of interest in bitcoin (BTC) development and has led to an increase in average block size as more users join the network, research firm FSInsight said in a report Friday.

Ordinals is a new protocol that allows non-fungible-tokens (NFT) to be stored on the Bitcoin blockchain.

NFTs could be a good source of demand for block space while the digital asset “travels up the adoption curve as money,” and the probability of these tokens fueling bitcoin’s next bull run cannot be ignored, the report said.

“Despite the loud critics from the more dogmatic side of the bitcoin ecosystem (some of which have gone as far as advocating for the censorship of transactions by miners), the benefits to the network have become immediately apparent,” wrote Sean Farrell, head of crypto strategy at FSInsight.

One reasonable criticism of bitcoin’s security model is the lack of miner revenue attributable to fees, the note said. Currently, most of the security budget paid to miners to secure the network comes from the block subsidy. The blockchain needs to figure out a way to “create a sustainable demand for block space or hope that non-economic miners commit to securing the network,” the note added.

“The excitement surrounding NFTs on Bitcoin has brought new experimentation to the network, increasing average blocks sizes overnight, which translates to higher fees per block,” the report said.

FSInsight notes that there are concerns that the inscription of non-fungible data on the blockchain could cause bloat, but says that these concerns seem generally unfounded.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Author placeholder image

Will Canny is CoinDesk's finance reporter.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.

Read more about