Bitcoin Sets New Record for Wallet Addresses Thanks to NFTs
For the first time in history, Bitcoin’s network has been utilized for purposes beyond simple transactions, driving the number of BTC addresses to a new all-time high.
The launch of Ordinals—a project that enables NFTs on the Bitcoin network—has recently made waves, with over 13,000 mints, pushing the number of Bitcoin addresses with a balance above zero to a record-breaking 44 million, according to data from crypto analytics platform Glassnode.
Bitcoin Address Statistics Surge. Source: Glassnode
In a report dated February 13, Glassnode explained that for the first time in Bitcoin’s 14-year history, a segment of the BTC network is being used for purposes other than peer-to-peer (P2P) money transfers.
“This is a novel and unique moment in Bitcoin’s history, where innovation is driving network activity without involving the transfer of traditional monetary volumes. The primary source of this activity is Ordinals, which, rather than moving large volumes of BTC, leverages a larger amount of network data to attract new users. Consequently, Ordinals have spurred growth in Bitcoin’s user base by expanding its use cases beyond typical money transfers and investment.”
Additionally, Ordinals are competing for Bitcoin block space, which is increasing pressure on the fee market; however, this process is not expected to lead to a significant rise in BTC transaction fees.
According to Dune Analytics, as of February 13, over 76,000 NFTs have been minted through Ordinals, with a record peak on February 9, reaching 28,800 mints in a single day.
Ordinals Gain Momentum with 76,000 NFTs Minted on Bitcoin. On February 9, the inscriptions spiked to 20,800 for the day. pic.twitter.com/cGwwwhzemJ
— unfolded. (@cryptounfolded) February 14, 2023
Since Ordinals launched on January 21, 2023, the average size of Bitcoin blocks has increased from 1.5-2.0 MB to 3.0-3.5 MB within just a few weeks.
Average Bitcoin Block Size Over the Past Three Months. Source: Glassnode
The technology behind the Ordinals protocol was enabled by the Taproot upgrade, effective November 2021. By using ordinal numbering schemes, users can assign arbitrary content to satoshis (the smallest unit of BTC), allowing them to inscribe images similar to NFTs. To date, over 78,400 images and videos resembling NFTs have been recorded.
While Ordinals represent a unique and revolutionary step for Bitcoin—often considered an "aged tool" resistant to upgrades—there remains considerable debate regarding Bitcoin’s true role in this context. For a deeper dive into this issue, please refer to the detailed article below:
