In March 2023, the introduction of Ordinals brought forth a protocol operating on the Bitcoin network, enabling the implementation and stable operation of Tokens and NFTs on the Bitcoin network. The emergence of platforms like Unisat and MagicEden within the Mingwen ecosystem quickly led to a thriving Bitcoin ecosystem. MagicEden, focusing on the NFT trading track, also launched a trading marketplace on Bitcoin. Collections like Bitcoin Frogs and Punk gained immense popularity, with Bitcoin Frogs accumulating over 500 BTC in trading volume. As Bitcoin Mingwen gained traction, enthusiasts from other public blockchains also launched Mingwen projects on different chains.
Mingwen Market Overview
As various public blockchains develop their Mingwen ecosystems, trading volume and minting data continue to rise. For instance, as of the time of writing, Ordinals Mingwen's total minted amount stands at 35,337,439, with a protocol's total fee of 2,121.8 BTC, equivalent to approximately $58,242,786. There are 13,047 unique holders, and the total number of transactions reaches 483,426. Furthermore, on the Bitcoin ecosystem, there are already over 2000+ different Mingwen varieties created using the Ordinals protocol.
Principles of the Mingwen Protocol
Ordinals protocol, introduced by Bitcoin core contributor Casey Rodarmor in January 2023, is based on an innovative design centered around "satoshi." It allows various information, such as images, text, and videos, to be embedded in "satoshis," linking the uploaded Mingwen to specific satoshis. This process is called engraving, similar to minting NFTs on Ethereum. These satoshis with Mingwen become Bitcoin NFTs. With each Satoshi having a unique identifier, the associated content gains uniqueness, transforming Satoshi from mere units of account into NFT units.
Bitcoin Protocol Ecosystem
Two months after the release of the Ordinals protocol, Twitter user @domodata introduced a Bitcoin token standard, BRC-20, on top of the Ordinals protocol. BRC-20 does not have smart futures; Mingwen can serve as ledgers. However, creating an immutable ledger system is challenging. Writing on the Bitcoin chain consumes valuable resources, including paying a certain amount of satoshis as mining fees and incurring time costs while waiting for transaction confirmation. BRC-20 is built upon the Ordinals, and creating instability on instability could make it fragile.
From a market perspective, despite unfavorable NFT conditions in 2023, Ordinals achieved significant growth. Notably, Ordinals represented 18% of all NFT trading volumes in May. During the first three quarters of 2023, Ethereum dominated NFT trading volumes, surpassing the combined total of Solana, Bitcoin, and Polygon. Despite minimal trading volume in January 2023, Bitcoin's cumulative NFT trading volume ranks third, reaching $5.96 billion. Even excluding BRC-20 from Bitcoin's total ordinal count, Bitcoin is the third most popular blockchain for digital collectibles, following Ethereum and Solana.
Ethereum Protocol Ecosystem
On June 17, Ethereum Mingwen Ethscriptions, developed by Tom Lehman, co-founder and former CEO of Genius.com, was officially launched. It's a new protocol that creates and shares digital collectibles on Ethereum using transaction call data. Ethscriptions uses the Ethereum blockchain to store ownership information for each digital collectible, with a file size limit of 96KB. Currently, the protocol only supports images, but Ethscriptions' creators have indicated plans to support various file types in the future.
Compared to the Bitcoin Mingwen ecosystem, Ethereum boasts the largest user base in the entire public blockchain ecosystem. It enjoys strong wallet support, whether as browser extensions or mobile wallets, which is unparalleled in other ecosystems. Ethereum's user base remains the largest, and its chain's security is relatively more robust.
Risks and Competition in the Mingwen Ecosystem
Currently, the Mingwen ecosystem is primarily dominated by BRC-20 and ETHS. Due to differences in the infrastructure of various chains, they each face unique challenges and risks, along with competition from others.
The BRC-20 ecosystem faces the challenge of a high entry barrier due to Bitcoin's mining and UTXO mechanisms, making Mingwen usage relatively complex for many users. Early on, the process of minting Mingwen assets deterred many. Additionally, slow on-chain speeds and high gas fees have long been criticized issues.
ETHS, in addition to high gas fees, also faces competition from the NFT market, which has far surpassed ETHS in terms of application scenarios, infrastructure, and market foundation. ETHS needs further improvements in liquidity mechanisms, functionality, and user interactions.
Conclusion
Led by Ordinals, the Mingwen ecosystem continues to innovate and expand into new application areas, ushering in an unprecedented period of innovation in the world of crypto. The untapped potential of general computation on the blockchain is fueling the development of various new products. Looking ahead, the Mingwen ecosystem holds promise, with the maturity of infrastructure and increasing adoption trends. New protocols and projects continue to emerge, with developers continually enhancing them, and users showing keen interest and injecting funds. In the long run, the Mingwen ecosystem is worth keeping an eye on.
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