Canadian crypto miner HIVE Digital Technologies wants to use Ordinals in one of its AI initiatives, inscribing generative art on Bitcoin’s blockchain with the help of old Ethereum mining rigs.
HIVE CEO Aydin Kilic described the project as an exercise in technical prowess for one of crypto’s largest miners. He told Decrypt that Ordinals provides a new way for the firm to use its fleet of data-center-grade Nvidia GPUs, which it’s been using to mine altcoins after Ethereum switched to proof-of-stake during the “merge” and made miners obsolete.
“We will create generative AI art with our own GPUs, on our own fine-tuned model of Stable Diffusion, [...] and then use our hash power on the Bitcoin network to inscribe those on the Bitcoin blockchain,” he said.
What Is 'The Merge'? Ethereum’s Move to Proof of Stake
In September 2022, Ethereum made the transition from a power-hungry, proof-of-work system to an environmentally friendly proof-of-stake system. This switch is known as the "merge.” Here’s what you need to know. What is the merge? The merge changes the way that Ethereum transactions are validated. Previously, Ethereum worked like Bitcoin: transactions were mined by a decentralized network of computers, which raced to solve mathematical puzzles and were rewarded with new coins for doing so. This...
Ordinals launched earlier this year, and the buzzy Bitcoin protocol has led to a wave of innovation with crypto’s oldest coin. As a way for people to create NFT-like assets on Bitcoin by “inscribing” data on individual satoshi, equal to 1/100,000,000 of a whole Bitcoin, Ordinals has also been a significant windfall for Bitcoin miners that benefit from elevated transaction fees.
Even though Bitcoin transaction fees from Ordinals inscriptions have cooled over the past couple of months—fervor surrounding BRC-20 tokens, which are built on top of Bitcoin using Ordinals, sent them sky high—Kilic said HIVE is definitely “still leaning into them.”
Kilic compared the initiative to jet fighter squadrons like the Blue Angels who show off their skills by flying in tight formations. He described HIVE’s project as ambitious because it taps so many different segments of HIVE’s business, including its cloud computing platforms and custom versions of AI models like Stable Diffusion.
Bitcoin Mining Revenue Hits $184 Million in Q2 Amid Ordinals Fervor
Bitcoin miners are awash with funds from transaction fees, a multimillion-dollar windfall generated this past quarter due to the popularity of BRC-20 tokens and Ordinals, according to Coin Metrics. The crypto analytics firm said that a formerly “tepid fee market” for Bitcoin miners has been suddenly upended, with its latest “State of the Network” report finding miners earning $184 million from transaction fees from April through June. Compared to $2.4 billion in Bitcoin mining revenue overall,...
“We want to do a soup-to-nuts AI and Ordinals project that’s fully integrated,” he said. “It’s a reflection of our core competencies as a technology leader in the AI and Bitcoin space.”
Aside from creating a digital art pipeline, Kilic said HIVE is working with its custody providers to start transacting uncommon sats found through Ordinals. Uncommon sats, which are valued at a premium, are the first sat of each Bitcoin block. Kilic said HIVE has 272 of them. Sat is a common abbreviation for satoshi, the smallest denomination of Bitcoin that data is inscribed on.
When Ethereum shifted to proof-of-stake last year, it changed the way that transactions are verified on the network and greatly reduced its energy consumption. With Bitcoin, miners use large amounts of energy to verify transactions through proof-of-work.
Ethereum Energy Usage, Carbon Footprint Down 99.99% After Merge: Report
Ethereum’s long-awaited merge, which was successfully completed overnight, was designed to drastically cut down on the blockchain network’s overall energy consumption—and it apparently has done just that. According to an initial report out this morning, Ethereum’s energy needs and carbon footprint have both fallen even more than anticipated. The report, commissioned from the Crypto Carbon Ratings Institute (CCRI) by Ethereum-centric software firm ConsenSys, claims that Ethereum now uses approxim...
After Ethereum’s transition to proof-of-stake, HIVE said it was exploring alternatives to Ethereum mining. Developing a generative art pipeline using new technologies fits into HIVE’s overall corporate strategy of maximizing resources, Kilic said.
HIVE went public in 2017 and trades on the TSX Venture Exchange in Canada under the HIVE.V symbol. It has also traded on the Nasdaq since 2021 under the HIVE symbol. Shares of HIVE currently change hands at $5.66, and the company has a market capitalization of around $477 million.
Echoing comments made by MicroStrategy co-founder and executive chairman Michael Saylor, who said Ordinals holds potential in the realm of app development, Kilic said the protocol enables companies like HIVE to experiment with Bitcoin in previously unimagined ways.
“I think that it’s unleashing a whole new era,” Kilic said. “We're all super supportive of it.”
