FILE PHOTO: Souvenir tokens representing cryptocurrency Bitcoin plunge into water in this illustration taken May 17, 2022. REUTERS/Dado Ruvic/
NEW YORK: An eruption of meme coins and non-fungible tokens (NFTs) on the bitcoin blockchain has reshaped the revenue profile of miners and stirred questions about how lasting the upheaval will prove to be.
New software known as Ordinals paved the way for the NFTs and meme tokens to come to the network this year.
Galaxy Digital Holdings Ltd said the bitcoin NFT ecosystem could be worth US$4.5bil (RM20.4bil) by 2025, while about 25,000 meme coins have been tallied on the blockchain since they first emerged in March.
The NFT and meme-token craze spurred record transactions and an ensuing fee windfall for miners, who run the computers underpinning bitcoin.
At one point in May, transaction fees made up over 40% of revenues, whereas miner income is usually dominated by the new bitcoin they get for securing the blockchain.
“The Ordinals protocol has stimulated a seismic shift in the bitcoin mining landscape,” said Jihan Wu, chairman of Singapore-based Bitdeer Technologies Group, one of the top crypto miners by computer power.
Ordinals and a crypto rebound have eased the pressure on mining margins caused by last year’s digital asset rout and high energy costs.
But bitcoin purists argue the Ordinals phenomenon clogs the network and interferes with the largest cryptocurrency’s store-of-value and payment functions.
The mean fee per transaction on the bitcoin blockchain began in April at US$2.80 (RM12.70), reached US$30 (RM136.05) on May 8, and moderated to US$6 (RM27.21) on May 18, CryptoQuant data showed. — Bloomberg
