Stacks is one of the first blockchains to enable a way for minting Bitcoin (BTC) Ordinals, which puts it in an excellent position to benefit from the hype. However, Ordinals have invoked an issue from the past where Bitcoin maximalist ideologies will be tested if the NFTs lead to network congestion.
On top of that, Stacks has yet to deliver all the functionalities required to support an NFT trading ecosystem and it faces competition from projects in other blockchain ecosystems. The fundamental and technical analysis of the project suggests that the price surge might have reached overbought conditions and may correct in the near term.
Ordinals development is unpredictable for now
The recent focus on inscribing NFTs on the Bitcoin network peaked in the last month after Casey Rodarmor inscribed an Ordinal on Jan. 29. While the trend took off to an overwhelming start, the minting is limited to technical users with a Bitcoin node and trading primarily takes place through OTC channels.
In comparison to Ethereum NFT marketplaces, the infrastructure for Bitcoin NFT trading remains significantly underdeveloped in regards to complex activities like decentralized trading. Many investors have expressed their belief that there needs to be a way to spin up marketplaces and NFT minting platforms for Ordinals.
The Bitcoin developer community has previously discouraged using the network for anything other than payments because it clogs the space and increases transaction fees. In the bull run of 2020 and 2021, many Ethereum (ETH) users paid hundreds of dollars in fees per transaction as user activity on it exploded. On the other hand, Bitcoin’s fees stayed at optimum levels throughout the bull run, but the usage and earnings of the protocol lagged behind Ethereum.
According to a CoinShare report, the adoption of Ordinals will again be subject to the social acceptance of the method to inscribe additional data on the Bitcoin blockchain, which is bound to present challenges such as network congestion and increased fees.
The report goes on to review previous failed attempts to use the Bitcoin blockchain for smart contract activity, saying that “similar projects of Bitcoin’s past have had little impact on investors and users alike.”
The number of Ordinals inscribed on Bitcoin surged significantly at the start of February as the instrument exploded. However, the trend slowed down due to a lack of trading infrastructure, with less than 10,000 NFTs inscribed on most days….
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