Here’s Why So Many Bitcoin Holders Hate Bitcoin NFTs…

TL;DR

• The more popular Ordinals get → the more are created → the more miners get their palms greased → the higher the average transaction fees become on Bitcoin.

• This is great for miners (who not only process transactions, but keep the network safe n’ secure)!

• …but not so great for anyone looking to send Bitcoin at a reasonable cost.

Full Story

Picture this:

It’s your friends birthday, and you’re trying to get in to their favorite bar with a giant cake, balloons, party favors etc.

But the bouncer out front isn’t about to allow that sort of paraphernalia into the bar.

…unless you grease his palms – in which case, he’ll show you to the service entrance around the corner and let you take your contraband into the venue.

That’s kind of how Bitcoin Ordinals (aka Bitcoin NFTs) work.

If you were to try and use Bitcoin’s ‘front door,’ any transaction greater than 400kb would be rejected – which is fine, because you’re never going to reach that limit when only sending Bitcoin.

…but if you wanted to send a Bitcoin Ordinal (which could be an image, video, small piece of software – anything code-based really), you’d need to use the ‘side door.’

Which means greasing the palm of a miner – enough to convince them to allow you to process up to 10x the usual transaction limit (4mb, instead of 400kb).

And all of this feeds the ‘high-fee flywheel’:

The more popular Ordinals get → the more are created → the more miners get their palms greased → the higher the average transaction fees become on Bitcoin.

Which is great for miners (who not only process transactions, but keep the network safe n’ secure)!

…but not so great for anyone looking to send Bitcoin at a reasonable cost.