Analysis of the Current Development Status of the Bitcoin Ecosystem: Ordinals, NFT, Layer 2

来源：币界网

作者：Web3嗅观察

Bitcoin has always been the leader in the blockchain space and remains the largest cryptocurrency by market capitalization. Since the second half of last year, the development of the Bitcoin ecosystem has shown explosive growth.

With the emergence of the Ordinals protocol, BRC-20, and Bitcoin inscriptions, people have begun to pay attention to the development and scalability of the Bitcoin ecosystem. Therefore, the focus has shifted from viewing Bitcoin merely as an asset to seeing it as a more vibrant ecosystem that offers different ways to build decentralized applications and various speculative opportunities.

Since the inception of Bitcoin, numerous developers have focused on exploring asset issuance and scalability solutions, aiming to expand the Bitcoin network. The launch of Layer 2 is seen as a new type of scalability solution, hoping to build more applications on it. Additionally, the popularity of inscriptions has drawn more attention to the Bitcoin Layer 2 space, further promoting the development of the Bitcoin ecosystem.

This article will discuss the current state of Bitcoin NFTs, the Ordinals market, Layer 2, and other dimensions in depth.

Current State of the Bitcoin Ecosystem

Performance of Bitcoin Ordinals in the NFT Market

Ordinals is a protocol that allows people to mint NFTs similar to those on Ethereum on Bitcoin. In the past month, Bitcoin Ordinals has performed remarkably in the NFT ecosystem, with a trading volume of $130,912,638, ranking second, surpassing Polygon and Solana, only behind the Ethereum NFT ecosystem. This data indicates that the position of the Bitcoin ecosystem in the NFT market is increasingly rising.

According to Coingecko, popular Bitcoin NFTs currently include Ordinals Market, Quantum Cats, Bitcoin Puppets, NodeMonkes, and others.

Growth of Inscriptions

Inscriptions are Bitcoin native digital items (NFTs) issued based on the Ordinals protocol. With the birth of BRC-20, which provides a convenient way to issue assets on the Bitcoin network, the entire inscription market has rapidly exploded.

Data shows that as of June 24, the number of inscriptions has exceeded 67 million, showing no signs of slowing down. This growth is mainly attributed to the support of BRC-20 tokens and mainstream wallets for the Ordinals protocol. For instance, UniSat allows retail investors to easily purchase Ordinals and BRC-20 tokens and put them on-chain, further promoting the prosperous development of the inscription market.

Ordinals and Miner Revenue

The importance of Ordinals to Bitcoin is often underestimated, as it introduces new fee streams for miners. Due to the correlation between file size and fees, the cost of including data in Bitcoin blocks can be high. Data shows that so far, the total fees paid to miners through recording Ordinals have exceeded 6,865 BTC. This not only increases miners' revenue but also further boosts the activity of the Bitcoin network.

Ordinals Trading Market

In the Ordinals market, OKX and Magic Eden have been competing for market dominance most of the time. Magic Eden initially held an advantage in the third quarter of last year but faced strong competition from OKX starting in August.

According to GeniiData, as of June 24, 2024, OKX's daily trading volume was $2.059 million, Magic Eden's was $1.702 million, and UniSat's was $362,000. Currently, OKX ranks first, with the most Ordinals users.

Current State of Bitcoin Layer 2

Bitcoin Layer 2 technology has attracted attention since the inception of Stacks in 2015, aiming to introduce smart contract functionality or enhance applications in the payment sector through sidechain or state channel technology. However, until 2023, this technology did not receive widespread attention and application, with Bitcoin primarily viewed as a store of value and investment tool, and the on-chain ecosystem relatively barren.

2023 became a turning point for Bitcoin Layer 2 technology. With the explosion of mainnet asset issuance protocols, on-chain trading activity significantly increased, and Bitcoin network fees once soared to 600 sat/vB. At the same time, a batch of high-quality assets such as ordi, bitmap, and nodemonkes emerged, injecting new vitality into the Bitcoin ecosystem.

The Bitcoin Layer 2 projects around 2023 exhibit different characteristics. Early projects mainly focused on bringing smart contract functionality and scalability to Bitcoin, similar to Ethereum Layer 2 functionalities.

Since this year, people have begun to recognize the enormous potential of Bitcoin Layer 2 in building diversified applications that include DeFi, GameFi, NFT crypto art, and more. New projects this year have placed greater emphasis on meeting actual needs (such as staking requirements) and enhancing the liquidity and playability of quality assets. Although these projects face skepticism from some traditional forces, they undoubtedly inject new momentum into the diversified development of the Bitcoin ecosystem. Overall, the Bitcoin ecosystem is still in its early stages, and Bitcoin Layer 2 will continue to drive innovation and growth in the Bitcoin network.

(Part of popular Bitcoin Layer 2 projects)

Reflections on the Bitcoin Ecosystem

Currently, most applications in the Bitcoin ecosystem are imitations of existing applications on Ethereum, lacking true innovation. This model can attract funding in the early stages, but without innovation, both funding and attention will gradually fade. Although the Bitcoin ecosystem has taken shape and there are a considerable number of applications, the vast majority are imitations of Ethereum applications.

Recently, Bitcoin ecosystem projects like B² Network and Nervos CKB seem to have fallen silent. The reason may not solely be the flow of funds to the Ethereum ecosystem, but rather that the Bitcoin ecosystem has yet to develop applications with strong innovation.

The development of Bitcoin Layer 2 can, to some extent, promote the diversification and activity of the Bitcoin ecosystem, but it still needs to overcome many technical and trust challenges. In the future, whether the Bitcoin ecosystem can thrive in the long term depends on its ability to innovate on the existing foundation and build unique and attractive applications.