Amidst the turmoil the crypto industry has been involved in in the past month, the global market capitalization has fallen from the psychological level of $1 trillion; Bitcoin has followed the trend. The largest cryptocurrency in market cap fell from $445 billion to $420 billion.
Over time, BTC’s utility has been narrowed as a store of value and transfer of value. However, the emergence of the BTC Decentralized Finance (DeFi) protocol is trying to convert this network utility even further, expanding its use cases with the arrival of the Ordinals protocol.
Bitcoin ordinals or Bitcoin-based NFTs can be essential to maintain and grow the largest cryptocurrency economy in the ecosystem. Although, in an important step to activate the Bitcoin economy, some projects are focused on developing and increasing the market capitalization of BTC.
What Is Ordinal And How It Can Change The BTC Economy
according to for the crypto research firm Delphi Digital, over 365,000 Bitcoin ordinals have been minted “in a minting frenzy,” bringing activity to the BTC network to a new level.
For many, Bitcoin ordinals can be considered as NFTs, but the two are different. NFTs are created and tracked through smart contracts, often hosted using decentralized storage systems, such as the modular suite of protocols for managing and transferring data – the Interplanetary File System (IPFS).
On the other hand, ordinals are written in Satoshi’s on-chain storage, validated in blocks, and stored in the network’s distributed ledger.
However, according to Delphi Digital, the ordinal theory assigns a unique number to each satoshi, the smallest denomination BTC, 1 BTC equals 100,000,000 satoshi. It allows for the inscription of metadata in each sitting, the function of converting them into NFTs, increasing the interest of “big players” after Yuga Labs’ auction twelve times.
A project that will reveal the Potential of BTC
Roll kit will introduce a module for Bitcoin where “Sovereign Rollups” can manage execution. At the same time, these rollups will enable consensus and data availability to BTC.
Rollkit is a modular framework for rollups created by the Celestia team, the first modular blockchain network for secure web3 applications, which allows developers to plug in custom execution and data availability layers.
In addition, StackThe BTC layer for smart contracts that aims to “open the Bitcoin economy,” has a consensus mechanism called Proof of Transfer (PoX), an extension of the Proof of Bur mechanism.
Users of this layer can pay a fee to miners in STX, the native token of the stack of the decentralized computing platform Blockstack, to send transactions or insert smart contracts in the stack.
According to Delphi Digital, the project aims to “bridge” BTC through sBTC, a version of BTC that resides in the stack and is pegged 1:1 until BTC is used to mint. sBTC is intended to be as close to original BTC as possible to improve on-chain functionality. Delphi Digital concludes:
Ordinal, Stacks and Rollkit could be the start of a viable on-chain Bitcoin ecosystem. This project represents a new path for Bitcoin: One that is more than digital gold.
For Ben Lily, co-founder of Jarvis Labs and economist, the BTC ordinal represents a shift in the network’s demand curve, allowing users to be more productive using the network. For Lilly, this “looks like a healthy and growing economy,” he said:
The Bitcoin economy is trending bullish
Feature image from Unsplash, chart from TradingView.com.