Not the news BTC maxis wanted to hear.
On Feb 1st we wrote about a new trend that the Bitcoin community is not happy about.
NFTs are suddenly starting to be minted on the Bitcoin blockchain (sort of).
We wrote about the difference in depth last week, but as a recap, to quote ourselves:
This Bitcoin 'inscription' thing is different.
What it does is, it writes identifying code into individual satoshis (SATS), which are a denomination of Bitcoin (like cents on the dollar: 1 SAT = 0.00000001 BTC)
And in that code, you can add links to images and videos (similar to an NFT, but not the same).
The Bitcoin community is mad because the Bitcoin network can only process 1MB of transaction data, every ten minutes (and right now 1MB of data = roughly 4200 transactions).
By adding extra code to satoshis, it increases the amount of bytes that make them up, reducing the number of transactions the network can process every ten minutes.
Ready for the really bad news?
An Ethereum NFT collection called OnChainMonkey that was launched back in 2021 just 'inscribed' all of its existing artwork on the Bitcoin network.
...and the price has skyrocketed.
With the cheapest available OnChainMonkey's jumping from ~0.79ETH ($1550) to ~1.7ETH ($2630). It's now settled back down at ~1.3ETH, but still...
The reason this is bad news for the Bitcoin network is grounded in the simple psychological concept of positive reinforcement.
If moving an old NFT project to Bitcoin network is proven to increase the value of NFT projects, then chances are OnChainMonkeys wont be the only one to experiment with 'inscriptions.'
On one hand, that will lead to a slower network; on the other hand, this is a new way to use an old technology which shows continued progress (or maybe we're just clutching at straws here?).
