Even though Bitcoin’s fees have recently been through the roof and some developers are vexed over Ordinals, one part of the community is doing well: miners.
Daily revenue for those mining the largest cryptocurrency by market cap is now reaching highs of $40 million, according to Glassnode data.
Why? Because the demand for Ordinals is causing Bitcoin network congestion. Ordinals allows digital assets to be inscribed on the Bitcoin blockchain, and hype over the practice is growing because it’s a new feature of the oldest blockchain, supporting anything from images to video games.
With this hype comes more blockchain activity. Minting Ordinals assets works just like processing transactions—that is, miners have to validate them. In order to validate them, miners use powerful computers (usually industrial-sized operations) to solve complex problems. If the network is busy—and it is now—one has to pay more to get the job done.
This all means that miners are making more money simply because there is more work to do. Las Vegas-based CleanSpark told Decrypt that on Monday alone, the firm experienced a 61% increase in its mining output compared to the average day before the recent spike in transaction fees on the network.
At one point, some miners were paid more money to process transactions on the blockchain than for minting new Bitcoin—something that rarely happens.
Not everyone is happy with the Ordinals craze, though. One leading Bitcoin developer called for Bitcoin miners and developers to block people from minting Ordinals. (A number of people in the crypto community dismissed the idea.)
Happy #bitcoin miners.
$17.7 million USD earned through transactions fees – in a single day.
— Rafael Schultze-Kraft (@n3ocortex) May 9, 2023
The gripe? That all the Ordinals are slowing down the network, which in turn makes things difficult for those who want to use Bitcoin to buy and sell things.
But one miner, Scott Norris, co-founder of LSJ Ops, told Decrypt that the hype would soon die down. “Ordinal traffic will run out of money to burn so it will regulate itself,” he said, adding that “even with a backlog, Bitcoin is still quicker than banks to settle a transaction.”