The Bitcoin blockchain, a key player in the cryptocurrency market, has recently seen a notable increase in activity, mainly due to a surge in NFT sales. In December 2023, NFT sales on Bitcoin reached over $881 million, setting a new record for the blockchain.
Data from CryptoSlam indicates that these sales involved 111,713 buyer addresses and 98,744 seller addresses, marking the highest records for a single month. The increased activity in the Bitcoin NFT market suggests a diversification of the NFT sector, traditionally dominated by the Ethereum blockchain.
Introducing Ordinals: Bitcoin’s Approach to NFTs
The rise in NFT sales on Bitcoin is closely linked to the introduction of Bitcoin NFTs, known as Ordinals. Unlike Ethereum-based NFTs, Bitcoin NFTs are inscribed onto satoshis, the smallest Bitcoin unit. Software engineer Casey Rodarmor initiated this development in January 2023 with the Ordinals protocol, which allows for the inscription of data onto satoshis. This data can include images, videos, audio, or text, leading to the creation of Bitcoin-native NFTs.
With each Bitcoin divisible into 100 million satoshis, the Ordinals protocol creates a significant opportunity for digital asset creation. The protocol also enables each satoshi to be uniquely identified and tracked through its transactions from minting.
The growth in NFT sales on the Bitcoin blockchain and the implementation of the Ordinals protocol demonstrates the evolving role of Bitcoin in the digital asset space. This trend suggests the blockchain’s increasing importance in the diversification and innovation of the NFT market.
The ‘BitcoinShrooms’ Collection
Last month, Sotheby’s entered the Bitcoin Ordinals inscription market. Their first auction in this domain featured three pixelated artworks from the “BitcoinShrooms” collection. The event, held on December 13, concluded with the artworks selling for around $450,000 – exceeding the initial high estimates, indicating a growing mainstream interest in Bitcoin-based NFTs.
Among the pieces was an avocado image that sold for $101,600 and a mushroom-themed artwork reminiscent of the Super Mario series, fetching over $240,000. Attracting 148 bids, the auction saw significant involvement from new bidders, who comprised most participants.