Ordinals vs NFTs: Are they set to outrun one another?

Ethereum and Bitcoin are the two most popular cryptocurrencies in the world, with the highest market capitalization levels. The former is the first digital coin to appear on the market and the blueprint for all the other altcoins that followed. Ethereum also managed to establish itself on the market as well, mainly due to its innovations in the fields of decentralized finance and applications. The past year, however, has been difficult for the marketplace as prices collapsed quite severely, impacting a large number of investors, many of whom saw selling their portfolios as the only thing they could do in order to get out of this difficult situation.

However, since the beginning of the year, the Ethereum price has been steadily increasing, achieving values roughly 60% higher than its lowest point at the end of 2022. Naturally, this has changed the engagement rates and the outlook investors have regarding the future of the market.

Ordinals vs NFTs 

Non-fungible tokens took the crypto world by storm during the late 2010s when a veritable craze appeared around them. During that time, many were sold for incredibly large sums, leading many to wonder if it wasn’t just an artificially created hype that was preying on traders’ wish to be part of the latest cool thing. Since then, things have cooled down a bit, or at least appeared to have cooled, until the emergence of Ordinals.

These tokens are essentially the same as NFTs, only they’re part of the Bitcoin blockchain. BTC didn’t allow this functionality until recently, and its emergence was not without controversy, as many investors didn’t see the point of it or believed that it would destabilize the market. However, their worst predictions didn’t come to pass. In fact, the opposite thing happened, and the market spiked to values that weren’t recorded in a long time.

Ordinals helped propel the marketplace and give it a much-needed boost. There’s been a considerable surge in both active buyers and sellers within the niche. The latest figures show an impressive growth of nearly 130%, indicating that around 10% of the market is directly involved in Ordinals. Nevertheless, Ethereum still rules this market, as the sales amount to approximately $24 million.

That hasn’t stopped many investors from claiming that a switch between the two could still be imminent, especially given how Bitcoin is the largest crypto in the world based on market capitalization. Since it already attracts the largest number of investors, it only makes sense that an ever-growing amount will opt for investing in Ordinals. Add to that the fact that the technology is still relatively new, meaning that many are interested in interacting with it.

The fact that they’re inscribed in the smallest Bitcoin unit, the Satoshi, makes them more accessible for investors as well. The Taproot upgrade has appeared because of them as well. And while Ordinals have broken several records since their emergence on the market, it remains to be seen how things will evolve.

Further regulations 

Regulations within the crypto environment are nothing new, and they have recently caused quite a stir in the community. Investors have been mainly concerned about the probability of regulators targeting important exchanges, which could potentially cause serious disturbances within the market. However, this has luckily not come to pass. In the United States, the crisis within macroeconomics, with the risk of default looming, caused the necessity to help the economy to take priority over the digital finance market.

However, after that crisis was successfully averted, it seems that regulators might soon return to their original plans. A leaked draft document coming from the European Union shows that authorities might be planning to learn how to better manage the opportunities the virtual environment provides. Many societal areas could benefit, and governance needs to raise up and meet the expectations of a steadily developing online world.

The European Union is now expected to start a conversation on topics such as identity management, censorship, as well as the progress and standards technology must comply with. Some expect the document to be published as early as next week and will signal the dawn of a new era in how authorities approach the virtual ecosystem. Leaders have outlined their desire to create an open and secure space that operates based on ethical values and clearly defined rules.

Many believe that, as technology continues to develop, it’s important to consider establishing new regulations that are perfectly optimized for the latest requirements for online users. This legislation should address some of the key concerns users might have and ensure the development and continuation of a safe environment.

Hacker attack 

Unfortunately, cyberattacks are nothing new, and attempts can be quite frequent within the crypto environment. The reason is simple, as hackers can exploit the blockchain’s transparency, many can access private funds without the action being traced back to them. Moreover, since transactions are generally final, those that lost their crypto have a small chance of seeing their funds again.

Recently, the decentralized finance market has been rocked by such an event, as a coding loophole allowed hackers to drain nearly $500,000 in one fell swoop. The reason appears to be the lack of untrusted input validation, a mechanism that can cross-check inputs, particularly those that are unverified.

After two hours, the decentralized protocol confirmed the events and paused contracts to prevent further fund bleeding. The move is temporary until the investigation is complete and the root cause addressed. Researchers have already begun discussing yet another vulnerability that hackers could use to their advantage. The problem refers to a lack of reentrancy protection. This allows instant liquidation to bypass the internal vault’s health check.

The second quarter of 2023 saw many hacker attacks, resulting in a cumulative loss of more than $300 million. There were around 212 incidents recorded during this time. And although that might seem like a hefty number, comparative research shows that the number of attacks has decreased by a whopping 58% compared to the same period back in 2022.

The crypto market continues to change under the influence of internal and external factors. As always, investors need to be mindful of the choices they make.  

Bihar Feed Team

Biharfeed is dedicated to all those people who always want to be updated with Biography, Business Ideas, Entertainment, famous places to visit, And government scheme.

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