“Crucial” Ordinals will mean Bitcoin hard-fork

By: Akash Mahendra, head of developer relations at Haven1

“Bitcoin Ordinals are a controversial topic due to the network congestion they are causing, with Bitcoin fees hitting a 20-month high of around $40 per transaction last week. However, Ordinals and BRC-20 tokens are, in fact, crucial to the survival of Bitcoin and its mining operations as we head into the next halving in 2024.

Today, Bitcoin’s security model relies heavily on transaction fees as a source of revenue. As mining fees are slashed again at the next halving, slated for May 2024, fee revenues will gain even greater importance. The rising fees we’ve seen in recent weeks, though unwelcome for users, allow Bitcoin miners to remain profitable.

In addition, BRC-20 tokens could offer a pathway to diversify Bitcoin’s functionality and appeal at a time when its proof-of-work mechanism is facing increasing scrutiny for its energy consumption and scalability issues. As variables like energy cost and environmental impact become more pressing, there is a growing need for additional revenue streams and network utility.

The relationship between transaction fees, network security, and token utility is not static but highly elastic. As such, Bitcoin must adapt to this changing economic and technological environment to remain relevant. Ordinals and BRC-20 tokens introduce a new dynamic to this relationship, potentially strengthening the network’s resilience and long-term viability.

However, the growing popularity of Ordinals leaves Bitcoin at a crossroads between its traditional, minimalist philosophy and the evolving demands of the cryptocurrency ecosystem. To move forward, the network will almost certainly require a major hard fork. While this would mark a significant shift away from Bitcoin’s original purpose, a hard fork would allow the blockchain to evolve and take full advantage of the benefits Ordinals and BRC-20 tokens bring.”

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