NFTs Coming to Bitcoin Sparks Handwringing About Crypto Purists

NFTs are coming to the Bitcoin blockchain, sparking a debate among those who say the digital representations add a much-needed fresh use case and the purists concerned about deviating too far from the origins of the peer-to-peer cryptocurrency network. 

Non-fungible tokens such as bored monkeys now infamous and cryptopunks are one of the driving forces that have made ethereum the most commercially significant blockchain, where users are able to monetize and exchange multi-million dollar digital assets. Bitcoin was conceived as a cryptocurrency, while ethereum was constructed as a next-generation version that can handle decentralized applications.  

NFTs are now feasible on the Bitcoin network after developer Casey Rodarmor recently launched a protocol known as Ordinals that allows the digital artifacts to be carried on the original crypto blockchain.   

While mining bitcoin, processing and validation of data on the blockchain, are pleased with the invention as it may increase costs for them, Critics fear that the influx of new transaction volumes may push other financial transactions out of the way. 

Nfts are enabled through a major update on the bitcoin blockchain in November 2021. Called taproot, the update was aimed at improving the privacy and efficiency of the platform, opening up a series of opportunities for Bitcoin developers to build native network applications. Which allowed people to enter some data, including images and text, into the transaction data to create an nft that can be exchanged and offered on the Bitcoin blockchain. 

"If it takes some traction, it will improve the mining economy massively," said Nick Hansen, managing director of crypto-mining services company technologies luxor. "The miners have been compensated for the addition of these deals to the blockchain." 

Bitcoin miners win a fixed offer of free blockchain chip rewards and fees for transaction processing. Fees represent a much lower source of revenue than rewards, considering the relatively low volume of transactions compared to Ethereum.

However, some critics are preoccupied with the rise of Bitcoin's native NFTS may potentially oust other types of transactions. Adam back, general manager of crypto infrastructure enterprise blockstream, regarded the listings as "pure waste and stupidity of a coding. At least do something efficient.”

Rapid adoption of NFTs on Ethereum has created high fees and congestion while the blockchain continues to improve its scalability. Yuga Labs, the creator of the popular Bored Apes Yacht Club collection of NFTs, launched a sale of Ethereum-based NFTs Otherdeeds in May, transaction costs skyrocketed as people rushed to mint and trade the digital assets. Fees have increased more than the value of the tokens themselves sometimes around selling.