Bitcoin seems to be making a comeback in a whole new way.
The picture shows YugaLabs' TwelveFold series No. 1 NFT, worth $150,000
Now is the most delicate time for Bitcoin's development.
YugaLabs, a collection of top NFTs such as bored apes and cypherpunks, has a market cap of more than $4 billion today. Now, the company, which has always been known for creating blue-chip NFTs, is also looking at Bitcoin NFTs.
The day before yesterday, YugaLanbs auctioned 288 Bitcoin NFTs for the first time through the Bitcoin Ordinals protocol. The collection, called TwelveFold, started at $5 per NFT and ended up fetching a whopping 7 bitcoins for about $150,000. The auction also generated $16.5 million for YugaLabs, which shocked the crypto community.
As a well-deserved giant in the NFT industry, YugaLabs occupies three of the current top ten NFT collections, and also holds massive IP resources. But aside from Ethereum, there's not yet any chain that's enough to entice the company to create NFT works. Until last week, when YugaLabs announced its entry into Bitcoin NFTs with a high profile, no one doubted that YugaLabs' next big bet was on Bitcoin.
What's more, Bitcoin's momentum is indeed fierce enough. From the social protocols Nostr and Damus, which fused the Bitcoin Lightning Network explosion in early February, to the NFT protocol Ordinals, which quickly exceeded 300,000 in two weeks, to the recent hot topic of deploying the Bitcoin Layer 2 scaling protocol, Bitcoin seems to be returning with a new attitude.
Bitcoin has long been considered electronic cash, and its role has never crossed over money. At the moment, Bitcoin is doing very well at this point, but in the eyes of another group of crypto geeks, Bitcoin seems to be more "interesting".
That is to add more possibilities to Bitcoin, such as NFTs.
In the last bull market, the Counterparty protocol was born on the Bitcoin chain, and NFT has a certain prototype. But minting NFTs directly on-chain is far more complicated than operating on decentralized applications, and since Bitcoin is not smart contract friendly, NFTs are not sought after by the market.
Until 2021, Bitcoin's Taproot upgrade greatly improved the ease of use and security of smart contracts, and also allowed the Ordinals protocol to truly "inscribe" digital artworks on blocks. Bitcoin NFTs are just starting to gain traction in the market.
But Bitcoin NFTs are significantly different from Ethereum NFTs, and may even be better. Because the data corresponding to Ethereum NFTs, such as pictures, videos, etc., mostly exists on off-chain servers, such as IPFS.
This leads to a potential problem, Ethereum NFTs themselves are immutable tokens, but the corresponding data may be deleted. Today the picture is still a monkey, tomorrow it will be blank. Bitcoin does not have this problem, because the data is written entirely on the block and stored on the chain forever.
Casey Rodamor, the creator of the Ordinals protocol, has even created a "burn address" that allows Ethereum NFTs to be burned and redeployed or inscribed onto the Bitcoin network. While investors aren't really going to give up Ethereum NFTs, it's foreseeable that more NFTs will be minted in the Bitcoin network.
According to Dune Analystics data, since the beginning of February, more than 350,000 NFTs have been successfully minted on-chain through Ordinals. This is also a new development for Bitcoin, as more and more people will start using Bitcoin instead of simply holding it in a hardware wallet.
YugaLabs' embrace of the Ordinals protocol added a new game to the market and stirred up the entire bitcoin market. Last year, a startup, Trust Machine, raised $150 million to build a Bitcoin on-chain ecosystem. Counting companies like Counterparty, Liquid, Stacks, RSK, and Lightning that have been working on the Bitcoin infrastructure for years, more people will experience robust Bitcoin services.
Now, the Bitcoin community is on the cusp, with some people believing that the Bitcoin network cannot be a testing ground for any project, and others believing that protocols like Ordinals really open up new ideas for Bitcoin's development. According to the data monitored by Glassnode, Ordinals single-handedly raised non-zero Bitcoin addresses to an all-time high of 44 million.
The Ordinals protocol is open, and YugaLabs' involvement seems to prove that the protocol isn't going away anytime soon. Time will tell the future of Bitcoin. YugaLabs' embrace of Bitcoin NFTs seems to send more positive signals, and in this new continent, there will be more surprises waiting to be discovered.