Recently, the popularity of Bitcoin inscriptions has been increasing, from Ordinals to Atomicals. But I don't plan to talk about how ORDI or ATOM have risen, or whether the inscriptions have technical value
Recently, the popularity of Bitcoin inscriptions has been increasing, from Ordinals to Atomicals. But I don't plan to talk about how ORDI or ATOM have risen, or whether the inscriptions have technical value. But I want to combine some data to analyze the underlying reasons for the outbreak of the Bitcoin Inscription Circuit and infer the development of the Bitcoin Inscription Circuit in the future.
The data source used in this article is Oklink Chain Master.
Firstly, let's take a look at the income of BTC miners in the past three months. As of August 17th, the contribution of on chain handling fees was only about 1.7%. However, since November, it has been gradually increasing every day until reaching its recent peak of 19.57% on November 10th. The most significant driving force during this period was bn's participation in the ORDI trading pair.
From this perspective, the outbreak of the Bitcoin Inscription Circuit has effectively increased the proportion of miners' fee income. If we see a Bitcoin production reduction in April 2024 after six months, the block rewards will be reduced by half again. Without considering other factors, shifting the current popularity of inscriptions to future production reductions will result in a 50% commission revenue generated from the Bitcoin inscriptions race.
Miners are inevitably driven by profits. After a foreseeable reduction in production, they will choose to purchase new mining machines in the past to improve their computing power, ensuring that their computing power advantage can bring more block rewards. However, in an analysis article by Ni Da (X: @ Phyrex-Ni) on November 9th, it was pointed out that currently, Bitcoin mines in the United States have been losing money for nine months of the year. Coupled with process bottlenecks in the semiconductor industry, the arms race in mining computing power is gradually slowing down.
Therefore, the miners who drive profits will inevitably seek another way to increase their income, which is the Bitcoin inscription.
According to the BRC20 token information of the master on the oklink chain, it can be seen that within less than a year of the launch of Ordinals, more than 50000 tokens have been issued on the market. Adding in the mints of each token and the number of transactions, this is a rapidly expanding trading market. This trading market has greatly stimulated the increase in transaction fee income for Bitcoin miners.
Whether it is Ordinals, Atomicals, or various unknown coloring coin protocols, they are essentially driving the growth of miners' profits, and miners urgently need a new source of income. Therefore, the Bitcoin Inscription Circuit will proudly shoulder this responsibility. Miners will also become a major player in the Bitcoin Inscription Race.
However, it is worth noting that miners need larger and more transaction times compared to the special coin inscription track, and the price increase or decrease of the inscription is only a means to achieve this, while the increase in the proportion of commission income is the goal.
Based on the positive attitude towards the expansion of the Bitcoin Inscription Circuit compared to the above, I infer that the next thing that will explode in the Bitcoin Inscription Circuit should be tool products produced by the Inscription foundry. For the vast majority of ordinary people, installing and configuring a full node on their own and then printing inscriptions, although the cost is lower, the operating threshold is also higher, and there are also certain requirements for large capacity of computer storage hardware.
Therefore, in order to quickly expand the breadth of the inscription track, simpler and more convenient service-oriented tools are essential. For example, the top exchanges have gradually integrated Bitcoin inscriptions, supporting the casting and trading market of inscriptions. As the product iterates, the complexity of operations related to Bitcoin inscriptions will decrease.
Finally, what I want to say is that even if the track becomes wider, it does not necessarily mean it has value for investment. I would personally compare the current Bitcoin inscriptions to the era of erc20 token proliferation around 2017. Before erc20 tokens gained an absolute advantage, it was common in the market to create a chain or fork a chain, and then issue native tokens. Due to the different technology stacks of each public chain, the difficulty and speed of exchange docking and coin listing also varied, until the ERC20 token achieved large-scale unification, allowing the trading proceeds to be quickly coin listed and pushed to the market.
At present, Bitcoin inscriptions are also in the early stages of this race, but ultimately a unified protocol will emerge among various Bitcoin inscriptions protocols, ultimately capturing the entire Bitcoin inscriptions market. The current inscriptions track only solves the issue of Bitcoin ecological asset issuance. When there is an agreement or project that can solve the application scenarios of Bitcoin ecological assets, it is the foundation for valuable investment.
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