To recap, Ordinals is a protocol that allows you to attach unique information to each satoshi or 0.00000001 BTC. The capabilities of Ordinals allow you to inscribe snippets of text, images, videos and so on directly into the Bitcoin blockchain. The popularisation of the protocol based on the BTC network has resulted in a separate token standard called BRC-20, among other things.

The protocol quickly attracted a lot of attention. Generally, BRC-20 was released in March, so the pace of its popularization is really surprising. However, interacting with NFT and Bitcoin blockchain-based tokens requires many transactions, which overloads the network due to its limited technical capacity and has already led to a surge in fees. Because of this, the protocol has been at the centre of a scandal. And some Bitcoin Core developers have even suggested censoring such transactions to deal with the problem.

However, BRC20 tokens along with Ordinals-based NFTs continue to be in demand. We checked the latest data: today the number of NFTs based on this protocol is approaching the level of 9 million units.

At the same time, the market capitalization of almost 25 thousand different BRC20 tokens is $447 million. Trading volumes with them have reached 207 million in the last 24 hours.

What’s wrong with NFT in the Ordinals protocol?

Michael Saylor likes the hype around Ordinals, and sees it as clear evidence of a fresh idea in the protocol, among other things. Nevertheless, Ordinals cannot yet boast many useful projects on its base. Many of them are mere speculation or even something illegal, believes Sailor. Here’s a relevant rejoinder from a BTC enthusiast cited by Decrypt.

If BRC-20 tokens are seen as assets for issuing unregistered securities, it will raise a lot of objections because it’s unethical. It’s illegal. And you can’t blame the community for objecting to such a thing.


Note that Michael Saylor's comments about anything being unethical sound rather ridiculous, as he has had problems paying taxes in the past. Michael is suspected of calling himself a resident of Florida, a state without income tax, but actually living in Washington. The tax shortfall could be as much as $25 million.

On top of that, Saylor doesn't have the best reputation within the cryptocurrency community. Yes, he actively supports Bitcoin popularization, and his company has managed to accumulate 140 thousand BTC. However, along with this, Michael is trying to cause problems for cryptocurrency "competitors" by calling them unregistered securities. Not only is this detrimental to the crypto industry, but it also sounds pretty silly in general for someone who's supposed to appreciate decentralization.


But if the BRC-20 standard manages to gain enough acceptance, such tokens could well become a new field for the crypto market, Seilor believes. In any case, investors will decide what is worthy of long-term growth and development, and suppressing BRC-20 by any means is simply not rational.

By the way, some NFT collections based on Ordinals are already gaining the attention of traders. An example of this is the Bitcoin Frogs token series, which is a reference to the popular internet meme with Pepe the frog.

It has generated almost $320,000 in trading volume in the last 24 hours. Which means traders are not passing by this collection and are willing to spend money to interact with it.

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The popularity of Ordinals and the rise in commissions on the Bitcoin network has been a problem for ordinary users because of this, but on a global scale the new trends will play to the long-term development of the cryptocurrency. This opinion was expressed by Dan Held, a popular cryptocurrency enthusiast and head of marketing at Trust Machines, in an interview at the Bitcoin 2023 conference in Miami.

Here’s his quote on the subject.

This is good for Bitcoin as it solves its long-term security model. Rising commissions are a good reason to plan and create alternative solutions.

Held drew an analogy between cargo ships and containers. The first is Bitcoin and the second is transactions in its blockchain. He explained that second-tier solutions like the Lightning Network allow multiple transactions to be aggregated, thereby reducing the burden on the underlying layer.

There are many, many transactions or containers on cargo ships, and the cargo ship itself is layer one. Transaction containers are like small second-tier transactions that are assembled into a single first-tier transaction. That’s how Lightning works, right? You open and close a channel within Lightning, but opening and closing a channel can represent thousands or millions of second-level transactions.

In other words, EA is pushing for a deeper development of the Bitcoin ecosystem and scaling the cryptocurrency. The implication is that most transfers in the Bitcoin network would then need to be processed at the second tier – this would “offload” the blockchain and significantly reduce fees.

It’s fair to say, however, that during congestion on the main BTC network, tier two chains are not the magic solution to all problems. The fact is that sending funds into them and opening channels requires paying the usual transaction fee, which in May 2023 was already as high as $30. The same goes for closing a channel and withdrawing bitcoins to the main cryptocurrency network.


The Bitcoin community does not seem to be ready for the mass distribution of tokens based on this blockchain yet. That is why some developers are proposing to block transactions with them, while others are suddenly talking about the alleged illegality and unethical nature of the phenomenon. Be that as it may, it is the users who will determine the future fate of NFT based Ordinals and BRC20 tokens on the Bitcoin network. And Michael Saylor's comments won't stop that in any way.


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