Bitcoin Punks up a hundredfold? Detailed explanation of the current status of Bitcoin network NFT projects and infrastructure

by News Expert

Recently, the minting and issuance of NFTs on the Bitcoin network has been continuously appearing in the public eye, and the attitude of the community has also changed from initial indifference to half-knowledge to active participation. According to the Dune data panel, there are currently 33,517 NFT collections minted on the Bitcoin network, and 12,102 NFT collections were minted in a single day on February 9.

Among them, Bitcoin Punks, an NFT project based on the Bitcoin mainnet Ordinals protocol, was minted at 15:00 on February 9, with a total of 10,000. At present, the Bitcoin Punks official is completing the collection, parsing the existing inscriptions and verifying the first upload node of each Punks. The final JSON mapping of the 10,000 collection collection will be written into the Ordinals protocol within the next 24 hours.

According to official information, Bitcoin Punks is the first project to successfully upload original Ethereum CryptoPunks to the Bitcoin blockchain using Ordinals. Officially, to make the site, the team is checking the hash of every image uploaded to Ordinals and comparing it to the original 10,000 Punk images. The link to Bitcoin Punks is the first inscription (lowest ID) with the corresponding hash on the Ordinals protocol.

The specific steps for Bitcoin Punks minting are: download the sparrow wallet, then create a Native Segwit (P2WPKH) wallet, and then create a Taproot (P2TR) wallet to receive Bitcoin Punks collections. Then go to the Bitcoin Punks official website to find the Punks number that has not been minted, and then go to to download the Punks picture with the corresponding number. Finally, go to the official website of the full-node Bot of the Ordinals protocol to upload the pictures downloaded in the previous step, use the created Native Segwit (P2WPKH) wallet to pay bitcoins to the full-node Bot, and use the Taproot (P2TR) wallet to receive the collection. Payment methods include Lightning Network and regular Bitcoin network transfers. Generally speaking, Lightning Network transfers are faster.

The casting cost of Bitcoin Punks is about 25 US dollars, and there is no OTC transaction at present. In addition, during the minting process, because the payment of Bitcoin belongs to the form of a single order, and the payment speed of the Bitcoin network is slow, multiple users on the entire network who do not communicate with each other can pay successfully when they mint Punks with the same number, but in the end only the district The user whose block is confirmed the earliest can get Punks. This resulted in many users paying for the bot, but ultimately not getting access to the Punks collection.

According to Twitter KOL information, the secondary market price of Bitcoin Punks will reach more than 1 Bitcoin after the casting of Bitcoin Punks is completed, which is as high as 100 times the cost price. However, according to PANews’ observations in the community, there is currently no transaction in Bitcoin Punks, which means that there is no buyer’s market, and the 100-fold increase is a rumor. Members of the community need to carefully identify information and not be misled and cause losses.

How are NFTs on the Bitcoin network developing?

On January 21, 2023, software engineer Casey Rodarmor released version 0.4.0 of the Bitcoin network NFT protocol Ordinals, officially bringing NFT into the Bitcoin mainnet. The protocol essentially supports bitcoin’s version of NFTs, which are described on the bitcoin network as “digital artifacts” and can include jpeg-like image, pdf, video and audio formats. After the launch of the Ordinals protocol, NFT projects have been continuously issued and minted. According to data on Dune, Ordinals NFT has grown rapidly since February, most of which are image content.

Bitcoin Rock

The Bitcoin Rock collection has a circulation of 100 and is the first Bitcoin network NFT project issued based on the Ordinals protocol. Dotta, the CEO of the NFT project Forgotten Runes Wizard’s Cult, purchased 1 Rock for 0.2 Bitcoin on February 1. According to the official Twitter information, its current transaction price has risen to 1 bitcoin. And the team has donated 10 BTC to members of the Ordinals team to thank and support their work.

Ordinal Punks

Ordinal Punks are PFP collections minted in Bitcoin’s first 650 inscriptions, with a circulation of 100. Ordinal Punks “uses open-source algorithms and CC0 Punk sprites to generate new Punks,” according to a person involved with the project. Ordinal Punks officially released the first tweet on January 31, and started casting at 4 am on February 1. It took one day to complete the casting, and the casting price was 0.01 bitcoin. According to the Twitter information of the robot Ordinal Punk Sales, the first transaction price of Ordinal Punks was 0.07 bitcoins, and the current highest transaction price reached 9.5 bitcoins, worth 241,000 US dollars. The number of transactions totaled more than 30 times.

Well-known NFT community user dingaling purchased Punk 27 (inscription #444), Punk 48 (ins #483), Punk 73 (ins #599), Punk 80 (ins #606), Punk 88 (ins #614), Punk 91 (ins #617), Punk 92 (ins #618) a total of 7 Ordinal Punks collections, and it means that there is a real moment behind each inscription number.

At the same time, there are also the first ordinal collection of Bitcoin, Bitcoin Shrooms, which claims to be the last bastion of human digital art before the coming artificial intelligence, and Shadow Hats, etc. have opened official Twitter accounts and built official websites, but have not yet opened. cast.

In addition, the NFT project On the Edge of Oblivion, which is issued on the Ethereum network and promises to cross-chain to the Bitcoin network, and whose inscription order is based on the ID of the holder’s ERC-721 collection, has increased from 0 to 2.4ETH, with a circulation of 555. Currently The trading volume is 1000 ETH. This shows the current FOMO sentiment towards NFT projects on the Bitcoin network.

Status of Bitcoin Network NFT Infrastructure

The basic settings related to the NFT of the Bitcoin network are currently in a very early stage. The casting cannot be as convenient and simple as the Ethereum network. It is necessary to learn to create different forms of wallets, distinguish different forms of payment methods, and also need to synchronize all nodes of the Bitcoin network to participate. Mint NFTs based on the Ordinals protocol. There is no peer-to-peer trading tool as convenient and safe as Opensea when trading. Instead, a shared spreadsheet is used to update the order book, and sales can only be done through off-exchange transactions or escrow. Inevitably deceit is involved.

Bitcoin Punks can be minted quickly thanks to the full-node Bot developed and built by community members. If it takes a long time for an individual to complete the synchronization of the full node, it cannot be completed overnight. The figure below shows a case where community members are synchronizing all nodes of the Bitcoin network. However, because the casting method is currently in the order number mode, users cannot know whether a certain sequence number has been successfully uploaded to the chain. As a result, when using the full-node Bot, even if the casting is unsuccessful, user fees are charged at the same time, causing some users to use the threshold.

After the launch of the Ordinals protocol, the daily average block size of Bitcoin reached 2,021,079.56, a three-year high. On February 7, Pierre Rochard, vice president of research at Bitcoin mining company Riot Platforms, tweeted that the Inscriptions (inscriptions) of the Bitcoin network NFT protocol Ordinals are consuming 50% of the Bitcoin block space, and the block space utilization rate is 100% , the median rate fell.

Therefore, there are differences in the Bitcoin community for issuing NFTs on the Bitcoin network based on the Ordinals protocol. Some believe it will provide more financial use cases for Bitcoin, which will drive demand for block space and hence fees. For example, Bitcoin educator Dan Held believes that as the amount of block rewards becomes smaller and smaller, miners will become more and more dependent on transaction fees. If Ordinals do intensify competition for block space, higher transaction fees may allow miners to continue securing the Bitcoin network.

While others believe it deviates from Satoshi Nakamoto’s vision of Bitcoin as a peer-to-peer cash system, and that these NFT-like structures already take up block space on the Bitcoin network, which could drive up transaction fees. For example, in 2010, Satoshi Nakamoto vetoed the idea of ​​expanding the Bitcoin system, saying that “it is impossible to expand every proof-of-work arbitration system in the world in one data set.” Related reading: “Interpretation of the Ordinals Protocol Controversy : Is it okay to send NFT on the Bitcoin blockchain? 

In this regard, PANews believes that many users currently enter the blockchain and enter Web3 not because of Bitcoin, so they know little about the Bitcoin system. There are a large number of users who have never used Bitcoin wallets, never used Bitcoin transfers, and I don’t know what Bitcoin full node, lightning network, etc. are. Whether it is the Nostr social protocol or the launch of the Ordinals protocol, the application scenarios on the Bitcoin network have been increased, and more users have been guided to understand and understand the Bitcoin ecology, thereby allowing more users to start using Bitcoin. Therefore, it is not a bad thing for the Bitcoin network to open and develop in multiple directions. As for how it develops, whether it is good or bad, it is up to the free game and judgment of the market.

For the infrastructure related to the NFT of the Bitcoin network, with the wealth effect and the increase in the number of users, and the continuous competition among ecological products, they will be gradually built and improved. What we can do now is to devote more energy to the ecological development of the Bitcoin network. At the same time, it should be noted that the current NFT projects on the Bitcoin network are in a state of chaos, and most of them are start-up projects, which belong to the sandy gold rush. Users need to make careful adjustments when looking for business opportunities to avoid asset losses.

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