Of late, I've been rather intrigued with Bitcoin ordinals. When "colored coins" were talked about in the early Bitcoin days, I didn't get it. Looking back, they were slated to become non-fungibles before there were even non-fungibles. It's rather clever now with how devs/hackers essentially jerry-rigged Bitcoin and with ordinal theory to create an entirely new use case and asset class: Bitcoin NFTs (via ordinal inscriptions). Innovation's gonna innovate.
Ordinals are booming. I read over the weekend they nearly passed NFT sales on Ethereum recently.
There's an odd conundrum going on though. Bitcoin's first purpose, as stated by Satoshi right up front in the whitepaper, is as a payment method. This still is the #1 and only use according to Bitcoin maxis and purists. Rising fees kind of pushed this vision away. No one wants to pay $10 in fees to buy a $3 cup of coffee. Until...the Lightning Network (LN) made it viable again to transfer tiny amounts. So, that's good.
However, ordinals are ramping up fees even more. As I understand, incentives for running a Lightning Network channel seem to be under attack. That is, it currently isn't economically sensible to bother with running a Lightning Network channel. I absolutely don't know the ins and outs of how this works though, maybe @brianoflondon who runs https://v4v.app can chime in. He did write this Twitter post recently on this topic. What he wrote there doesn't sound promising.
And this is the oddity. Innovation brought us the Lightning Network and innovation brought us the Taproot upgrade which, in turn, brought us ordinal NFTs. And yet, it is these ordinal NFTs which seem to be inadvertently striking back and against the micro-payments of the Lightning Network by making the economics inviable.
Maybe I'm misunderstanding this. Maybe it isn't an either-or situation between the Lightning Network or Ordinals...a situation where we must pick one or the other and cannot have both. Or, as I alluded to in my last post, maybe there's yet another solution or two out there beyond our current imagination. Maybe there's still something out there just waiting to solve this tug-o-war.
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