How Ordinals are changing the NFT market and the Bitcoin ecosystem
Bitcoin became the first successfully implemented cryptocurrency in history. However, its protocol's capabilities are limited due to the absence of full-fledged smart contracts, which enable bilateral transactions.
With the activation of the Taproot protocol on the Bitcoin network, it became possible to introduce new functions using the "inscription" mechanism — special metadata that can be added to each satoshi (the smallest unit of BTC).
One implementation of this technology is Ordinals, which uses the Inscriptions methodology (numbering satoshis and attaching metadata to them using "inscriptions").
The Ordinals protocol made it possible to create non-fungible tokens (NFTs) on the Bitcoin blockchain, expanding the network's capabilities.
NFT market dynamics on Bitcoin
In recent years, Ordinals and BRC-20, implemented through the ordinal numbering system of BTC units, have grown from an experimental concept into a sought-after technology.
The reason for this surge in popularity is that Ordinals became the first NFT implementation on Bitcoin, and the protocol itself is one of the most resilient in the crypto industry.
According to the monitoring service CoinMarketCap, as of August 2025, the market capitalization of tokens created based on Inscriptions exceeds $323 million.
However, this still accounts for less than 0.01% of the entire crypto market.
Experts from The Block and CoinDesk note that Ethereum continues to dominate the NFT market in terms of trading volume and liquidity, while Solana maintains competitiveness thanks to low fees and fast confirmation times.
One of the main reasons Bitcoin still lags behind Ethereum and Solana lies in the infrastructure itself. Ethereum and Solana have well-developed ecosystems, providing users with a wide selection of wallets, NFT marketplaces, and tools for copyright management.
Ordinals on Bitcoin represent a more narrowly focused ecosystem, emphasizing the blockchain's "historical" aspect and unique collections. In addition, the Bitcoin NFT market launched much later, and it needs time to establish itself in the NFT space.
Nevertheless, as of August 2025, Bitcoin ranks second after Ethereum in NFT trading volume, surpassing the popular Solana ecosystem in this metric. At the time of writing, the figures looked as follows:
- Ethereum — $63.1 million
- Bitcoin — $17.6 million
- Polygon — $17.5 million
- BNB Chain — $13.7 million
- Solana — $8.3 million
Benefits of Ordinals for the Bitcoin ecosystem
One of the main advantages of technologies like Inscriptions is the expansion of Bitcoin's use cases and its ability to store data on the blockchain in a decentralized manner reliably.
Thanks to the Ordinals protocol, Bitcoin can serve not only as a tool for fast transfers and payments, but also as a means of transferring value in the form of digital art.
Furthermore, Ordinals attract new developers and users, thereby stimulating the growth of the Bitcoin ecosystem. This accelerates its adoption among both retail users and investors, including institutional players.
Criticism from the Bitcoin community and technical limitations
Some members of the Bitcoin community have criticized "Ordinals," arguing that they increase the load on the network and lead to higher data storage costs. The Bitcoin blockchain accumulates data, so the size of each copy grows over time, increasing the computational requirements for nodes.
Some developers also point out that chasing innovations like Ordinals could distract the community from Bitcoin's primary purpose — ensuring security, a high level of decentralization, speed, and resistance to attacks.
In addition, technical barriers are hindering the development and mass adoption of NFTs based on Ordinals. The fact is that the Bitcoin blockchain has limited scalability and was not originally designed to handle complex operations.
This means that a surge in popularity of digital artifacts like Ordinals leads to a significant load on the Bitcoin network. As a result, node requirements will continue to increase.
For example, the sharp rise in the popularity of "Ordinals" in 2023 temporarily led to a rapid increase in Bitcoin network fees, which at their peak reached almost $40. In addition to fees, transaction confirmation times also increased. Mempools (transaction queues) were congested, and users had to raise fees to speed up confirmation significantly.