Bitcoin NFT Development Status Analysis: The total number has exceeded 320,000, with a trading scale of nearly 7 million USD

Recently, the NFT series TwelveFold based on the Bitcoin Ordinals protocol concluded its auction, with a transaction amount reaching 735.71BTC. Although Bitcoin on-chain NFTs have only emerged for a little over a month, they are already seen as a huge market. Research institutions predict that the market size for Bitcoin NFTs will reach 4.5 billion dollars by 2025, with a trading volume of 1.6 billion dollars. The development of Bitcoin NFTs may also promote the development of the Bitcoin ecosystem, increase network usage, and benefit miners' earnings.

This article summarizes the on-chain data of Bitcoin ( from November 21 to March 7 ) and the trading data of Ordinals NFT, analyzing the current types of NFTs, trading scale, user scale, mining changes, and network fundamentals. The main findings are as follows:

1. A total of 328,800 Ordinals NFTs have been generated on Bitcoin, with an average daily increase of 7,148. Among them, there are 208,800 images and 117,400 texts. Recently, the growth of text NFTs has been the most significant.

2. The total trading volume of the four major trading markets from February 15 to March 7 is approximately $6.99 million, with the current total number of independent addresses exceeding 10,000.

3. OrdinalsNFT is the main reason for increasing miner fee income, and it may become a primary source of revenue in the future. The fees generated by NFTs increased from 0.00066 BTC in a single day to 0.28428 BTC, a rise of approximately 43257.73%. In mid-February, Bitcoin NFT fees once accounted for over 21%, remaining above 15% for several consecutive days.

4. During the statistical period, the average transaction fee for every 10,000 Bitcoin NFTs accounted for 12.47% of the total fee income for miners. The growth in the number of Bitcoin NFTs will significantly impact miner income.

5. During the statistical period, the average block weight of Bitcoin accounted for approximately 87.78% of the total capacity. The current Bitcoin Ordinals NFT activity has not squeezed other transaction activities but has only consumed the already available space. This is also the reason why the average transaction fee per byte has not increased.

The total number of NFTs has exceeded 320,000, with images and text being the two main types.

From January 21 to March 7, a total of 328,800 Ordinals NFTs were generated on Bitcoin, with an average of 7,148 added daily. Looking at the daily generation numbers, Bitcoin Ordinals NFTs experienced two peaks. The first peak occurred in mid-February, where the daily generation numbers on February 9, 14, and 15 all exceeded 15,000. The second peak occurred in early March, where the daily generation numbers from February 28 to March 5 all exceeded 15,000, with the highest being 24,800 generated on March 1.

Overall, the development of Bitcoin Ordinals NFT is greatly influenced by the "migration" of well-known NFT projects or project parties from Ethereum, with significant fluctuations in daily generation, reflecting the basic characteristics of the early market.

Currently, the types of Bitcoin Ordinals NFT mainly include four categories: images, text, video, and audio. In terms of total quantity, the type with the highest cumulative total is image NFT, with a total of 208,800, followed by text NFT, with a total of 117,400. Video and audio NFTs are relatively few, with less than 500 each. In terms of average daily generation, the most generated image NFTs averaged 4,540 per day during the observation period, while text NFTs averaged 2,551 per day, and video and audio NFTs averaged less than 15 per day.

This type of distribution is related to the generation method of Bitcoin Ordinals NFT. Bitcoin NFTs are completely on-chain and are part of the witness data, "bound" to individual satoshis. Therefore, the size of the NFTs is constrained by the size of the Bitcoin block space, giving smaller image and text NFTs a certain advantage.

From the generation trends of various types of NFTs, both image and text NFTs show a significant growth trend, especially text NFTs, which have a more pronounced growth trend and have increased the most recently. On the other hand, video NFTs are showing a declining trend, while audio NFTs remain relatively stable.

The total trading volume in recent times has exceeded 6.99 million USD, and the number of unique addresses participating in the transactions has surpassed 10,000.

Currently, there are 4 main trading markets for Bitcoin Ordinals NFTs. From February 15 to March 7, the cumulative trading volume of the 4 major markets was approximately $6.99 million, with the highest trading volume being about $4.28 million, followed by around $1.66 million, and the third place also nearing $1 million. Overall, the total trading scale of these trading markets is still at the million-dollar level.

From the perspective of the daily trading volume across the four major markets, the average daily total is approximately $333,000. The increase in trading volume began after February 28, with the trading volume on the 28th reaching $1.74 million. Since then, it has generally maintained around $500,000 daily, significantly higher than the previous level of about $100,000 per day. The growth trend of the daily trading volume is very clear.

In terms of user scale, the cumulative number of unique addresses in the four major markets during the same period was approximately 58,500, of which the highest cumulative number of unique addresses reached 30,800, followed by approximately 15,600 and 12,000.

From the changes in the number of unique addresses accumulated in the four major markets, the total number of daily unique addresses has明显增长, but the growth rate has slowed down recently. As of March 7, the total number of unique addresses has surpassed 10,000, an increase of 211.75% compared to 3,209 at the beginning of this month, and a significant breakthrough from 0 to 1 compared to just 7 on February 15.

The daily contribution of NFT to transaction fees exceeds 6%, and the transaction fee per byte is currently showing a downward trend.

The rapid development of Bitcoin Ordinals NFT has brought some noticeable changes to the underlying network. First of all, the most intuitive change is the significant increase in the adoption rate of Taproot.

The proportion of transactions using Taproot has shown a significant upward trend since January 21, rising from 1.79% to 6.22%, peaking at nearly 10%, and has recently maintained above 5%.

The other two intuitive changes on the chains are the increase in transaction volume and the rise in daily average computing power. The production and transfer of NFTs are reflected as on-chain transactions, and the increase in transaction demand will naturally affect the change in computing power.

According to statistics, the growth in transaction volume is relatively moderate, increasing from 287,700 transactions per day to 315,900 transactions per day during the statistical period, with a growth rate of approximately 9.79%. The highest daily transaction volume during this period was about 381,800 transactions, while the lowest was approximately 240,200 transactions, indicating overall fluctuations are not severe. The growth in average daily hash rate is also quite moderate, rising from 259.0 EH/s to 279.3 EH/s during the statistical period, with an increase of approximately 7.81%, remaining at historically high levels. The highest average daily hash rate during this period was around 361.6 EH/s, while the lowest was about 222.6 EH/s, showing significant fluctuations recently.

The development of Bitcoin Ordinals NFT has opened new space for Bitcoin's applications, and the increase in network usage has driven the growth of miner income. The total daily transaction fee income for miners increased from 16.33 BTC to 24.03 BTC during the statistical period, an increase of 47.15%, which is quite significant. Among them, the transaction fees generated by NFTs grew from 0.00066 BTC per day to 0.28428 BTC, an increase of approximately 43257.73%, equivalent to a 433-fold increase.

Recently, the growth momentum of Bitcoin's daily total transaction fees mainly comes from OrdinalsNFT. The correlation between the two is statistically significant, meaning that the more transaction fees generated by OrdinalsNFT, the higher the total transaction fees for the day, benefiting miners from OrdinalsNFT activities.

From the perspective of the proportion of OrdinalsNFT fees to the total fees of the day, the average during the statistical period is about 6.61%, meaning nearly 7% of miners' income comes from NFT activities. However, this is just the daily average, which is significantly affected by the relatively low activity of early NFTs. If we narrow the observation time frame to February, nearly 9% of miners' income comes from NFT activities.

It is worth noting that in mid-February, the transaction fee ratio of Bitcoin NFTs once exceeded 21%, remaining above 15% for several consecutive days. NFTs may become an important source of income for miners in the future. Additionally, considering the daily generation of Bitcoin NFTs, from January 21 to March 7, during the statistical period, an average of 2.36 BTC in fees was generated for every 10,000 NFTs, while the average daily total transaction fee during the same period was about 18.95 BTC, meaning that fees from every 10,000 NFTs accounted for 12.47% of miners' fee income on average. This indicates that the growth in the number of Bitcoin NFTs will significantly affect miners' income.

However, as of now, this impact has not yet manifested. On the contrary, the average transaction fee per byte (the smallest block space unit) on the Bitcoin network has shown a downward trend recently, dropping from 0.0023 BTC on January 21 to 0.0013 BTC on March 5, a decrease of approximately 41.52%. Additionally, the fluctuations in the average transaction fee per byte have also been quite significant, reaching as high as 0.0031 BTC and as low as 0.00099 BTC.

This is related to the block space size used by Bitcoin Ordinals NFT. Despite being influenced by recent NFT activities, the average block capacity of Bitcoin has shown a significant upward trend, rising from 2.94 MB on January 21 to 3.74 MB on March 5, an increase of approximately 26.94%. Since February, the average block weight has remained around 3.8 MB.

However, there is still some space between this and the maximum weight of 4 MB allowed by SegWit and Taproot. According to statistics, from January 21 to March 5, the average block weight of Bitcoin accounted for about 87.78% of the total capacity, which is less than 90%, and the highest did not exceed 95.5%. This means that the current Bitcoin Ordinals NFT activity is still within the network's capacity and has not caused any squeeze on other transaction activities; it has only consumed the already available space.

But this is just the early stage of Bitcoin NFT. With the prosperity and development of NFTs, there may be more complex effects on the fundamentals of the Bitcoin chain in the future, especially regarding mining fundamentals. In particular, the centralized minting of NFTs may exacerbate the short-term fluctuations in Bitcoin transaction fees, while in daily situations, NFT activities may increase the long-term utilization of block space. This could spur the development of Bitcoin's second-layer network and other facilities such as user-friendly wallets.