Nonfungible tokens (NFTs) remained an integral part of the Web3 ecosystem in 2023, with many community members continuously braving new waters and constantly trying to figure out solutions to the space’s challenges throughout the year.
While critics regularly write obituaries for NFTs, users trading the asset class prove that the space is very much alive. In the last 30 days alone, the top 10 blockchains used for NFTs have recorded a collective sales volume of over $1.5 billion, showing that there is still demand.
While so many things happened within the NFT space in 2023, some changes stood out more dramatically than others. These include historical developments for the industry, like the creation of Bitcoin Ordinals, the first United States Securities and Exchange Commission case against NFTs and the divide regarding creator royalties.
The rise of Bitcoin Ordinals
Software engineer Casey Rodarmor created Bitcoin Ordinals in 2023. Following a blog post on Jan. 21, the developer deployed the program on the Bitcoin mainnet. The protocol created Bitcoin’s version of NFTs, described as “digital artifacts” in the Bitcoin network.
you know what this ordinals thing just might work
— Casey (@rodarmor) January 16, 2023
Traditional NFTs often only hold metadata that points to off-chain storage containing NFTs. This approach has sometimes led to issues such as NFTs showing blank images or, worse, porn. In December 2022, the collapse of crypto exchange FTX affected NFTs hosted on its platform. As the company restructured, the NFTs broke apart, displaying blank images instead of the original artworks.
On Jan. 4, the third-party hosting service used by NFT marketplace Magic Eden was compromised. At the time, users reported seeing some pornographic images on the NFT thumbnails instead of the NFTs’ artworks.
With Bitcoin Ordinals, the assets’ contents are stored on the blockchain. While this saves the Bitcoin NFTs from being vulnerable to having their data erased and morphing into blank images, it doesn’t save…
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