As the world of cryptocurrency continues to evolve, one project that is rapidly gaining traction is the Bitcoin Punks collection. This collection of non-fungible tokens (NFTs) is similar to the popular CryptoPunks collection, and is built on the Bitcoin-native Ordinals Protocol.
The Ordinals Protocol utilizes Bitcoin’s Taproot upgrade, which is an improvement to the network that allows for more efficient transactions. It stores NFTs through inscriptions, which is a method of “inscribing” data in satoshis, or sats, which represent one hundred millionth of one bitcoin. The NFTs comprising the Ordinal Punks collection were minted on the first 650 inscriptions of the Bitcoin network.
The concept of Bitcoin NFTs has caused a heated debate within the dominant blockchain’s community. Some purists believe the blockchain should be limited to financial transactions, while others point to the Ordinal Protocol’s popularity as a positive catalyst that will fuel more development on the blockchain.
The popularity of the Ordinal Punks collection is evident in the fact that one NFT, Punk 94, recently sold for 9.5 BTC, or roughly $214,000. This is a testament to the potential of Bitcoin NFTs and the growing demand for them.
However, there are some risks associated with the Ordinal Protocol. Sam Callahan, Bitcoin analyst at financial services company Swan Bitcoin, warned that if demand for these inscriptions proves to be long lasting, it could impact other Bitcoin use cases like payments via the Lightning Network due to distorting Bitcoin’s fee market away from its use as an open monetary protocol.
Despite the risks, the Bitcoin Punks collection is a testament to the potential of Bitcoin NFTs and the growing demand for them. As the hype around Bitcoin NFTs continues to grow, the Ordinal Protocol is likely to remain a popular choice for those looking to get involved in the space.