As the interest in Bitcoin non-fungible tokens (NFTs) continues to escalate, one particular project that draws parallels to the highly sought-after CryptoPunks collection is seeing a surge in value: the Bitcoin Punks. A recent sale of an Ordinal Punk NFT, Punk 94, was reported to have fetched 9.5 Bitcoins, equivalent to approximately $214,000.
The Ordinal Punks NFT collection, minted on the Bitcoin-based Ordinals Protocol, has already sold out its entire supply, comprising of 100 NFTs inspired by the Ethereum-based CryptoPunks collection. The Ordinals Protocol leverages the Taproot upgrade of the Bitcoin network to enhance security and enhance transaction efficiency. The NFTs in the collection are stored using inscriptions, which involves embedding data in satoshis (sats) – a unit equivalent to one hundred millionth of a Bitcoin. The Ordinal Punks NFTs were created using the first 650 inscriptions on the Bitcoin network.
The advent of Bitcoin NFTs has generated a heated discussion within the dominant blockchain community, with some purists advocating for limiting the blockchain to financial transactions, while others see the growing popularity of the Ordinals Protocol as a positive catalyst that will drive further innovation in the space.
Sam Callahan, a Bitcoin analyst at Swan Bitcoin, a financial services firm, warned that while the popularity of Ordinal Punks will drive demand for block space, miner revenue and eventual Taproot adoption, there are risks associated with this trend. He noted that if demand for these inscriptions proves to be sustained, there is a risk that they could negatively impact other use cases of Bitcoin, such as payments through the Lightning Network, by distorting Bitcoin’s fee market away from its primary function as an open monetary protocol.
