🥛 Are Ordinals DOOM for Bitcoin?

  • February 15, 2023
  • 4 Min Read

GM, we’re the Milk Road. We’re the crypto newsletter that’s like the bacon in a BLT; without us, there’s no sandwich.

Here’s what we’ve got for you today:

  • The rise of the Ordinals
  • Crypto firms, you can’t sit with hedge funds anymore -SEC
  • Binance users withdraw a net $831M 
  • NEW: We found some cül Web3 jobs for ya

THE RISE OF ORDINALS NFTS

Bitcoin Ordinals have been the talk of crypto town lately. No, it’s not a new DAO sports team or indie rock band led by JPEGs.

It’s a new protocol that’s bringing NFTs to the Bitcoin blockchain. And today we’re gonna cover wtf an Ordinal is and why everyone is talking about it.  

”Alexa, start a timer for 90 seconds”

What is it? Ordinals protocol allows users to inscribe data (like images, videos, etc.) on the Bitcoin blockchain. In simple terms, NFTs on the Bitcoin blockchain instead of Ethereum.

Why are Ordinals making so much noise? Many are pointing out that this is the first time in Bitcoin’s history that it’s being used for something else other than the classical peer-to-peer monetary transfers.

Before Ordinal, the Bitcoin blockchain was a ledger of all the transactions on the network. It was just a bunch of letters and numbers, that’s it. (i.e wallet x98348 sent 2 BTC to wallet x238974)

After Ordinal, the Bitcoin blockchain is now a mix of transactions and “digital artifacts”. Not only does it still have the record of every single transaction, but the blockchain also contains images, videos, files, etc that have been inscribed onto it. 

You can think of it like when the cavemen used to inscribe random ass pictures and letters onto stone to record history.  

As of now, there have been over 88,500 inscriptions on the Bitcoin blockchain. It’s been a mix of:

  • NFT clones - Bitcoin Punks, Bitcoin Rocks, etc
  • Messages of text - Dan + Emma have already professed their love on the Bitcoin blockchain. (We’ll check back in with them in a few years to see if its still Dan + Emma or Dan </3 Emma”)
  • Random videos & files - Some guy put a copy of the OG Doom video game on Bitcoin blockchain

These digital artifacts have brought a lot of new eyes onto the oldest blockchain out there. Glassnode, a crypto analytics platform, reported that Ordinals' surge has contributed to a “short-term uptick in Bitcoin network usage of late” and has brought a bunch of new users to Bitcoin. 

Data from BitMEX also shows that Ordinals data has been making up a large portion of Bitcoin blocks recently. (i.e  there are more jpegs being minted than peer-to-peer financial transactions)

The numbers are wild. But the craziest part in all of this is... 

There’s no official marketplace to buy, sell, or trade Bitcoin Ordinals. There’s no website.  There aren’t even many “Ordinals-friendly” crypto wallets yet

People are trading Bitcoin Ordinals the same way I used to trade my Pokemon cards in 4th grade - OTL (over-the-lunchtable). Which has only added onto the hype. 

Are Ordinals the real deal or a passing fad? Hit reply and let us know what you think.

THE MILK ROAD FOR A.I.

In other news, let’s be real for a second.

A.I. is f*cking confusing. 

Artificial Intelligence is taking the world by storm. But it still leaves most of our heads spinning. 

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Like they say: “we explain A.I. without using fancy words”.

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THE SEC GOES AFTER HEDGE FUNDS

First crypto, now the hedge funds that work with crypto. The SEC wants to make it harder for crypto firms to be allowed to hold client assets for money managers.

The agency is moving crypto firms’ desks across the classroom cause they’re chatting with hedge funds too much.

Here’s the lowdown, according to Bloomberg:

  • The SEC is proposing today to make it difficult for crypto firms to be “qualified custodians”
  • That’s a fancy term for companies that can hold people’s assets for money managers
  • That’d affect hedge funds, private equity/VC funds, and pensions funds since they’re required to only use qualified custodians 

This would be a bit of a blow to financial groups that had leapt face first to capitalize on the crypto craze in recent years.

And that easy line of access to crypto for everyday investors like Joe Shmoe? That’d be obliterated.

Talk about a step back from mass adoption…

But fret not! It’s not in effect juuuust yet. Most of the 5-person SEC has to green-light the proposal, then they have to post it for public comment, and then vote again to set the rule in stone.

The SEC’s really just throwing the kitchen sink at the crypto space, huh?

$831M SWERVES OUT OF BINANCE

You can’t outrun the FUD.

Binance saw a net $831M Bye Felicia from its platform within a 24-hour time span, Nansen data shows. 

More specifically, users withdrew ~$2.8B in assets versus the $2B of deposits in that same window. Ouchy-wah wah

The cause? A New York regulator ordering Paxos, which issues and lists Binance’s BUSD stablecoin, to stop creating more tokens.

That’ll be no bueno for Binance—BUSD is the third-largest stablecoin by market cap and accounts for about one-third of the company’s trading volume.

Oh, and this is the largest outflow from an exchange since FTX went BOOM in November. The last thing you want is to share records with FTX…

WORK-IN-WEB3 WEDNESDAY

Everyone has seen the headlines…. Layoffs are spreading across crypto like a new contagion and everyone is scared. (Even the Milk Man texted us the other day… “We good?”)

Well, we’re tired of all the bad vibes so we’re starting a new segment called Work-In-Web3 Wednesday. Each week we’ll highlight the companies that are doing cool sh*t and hiring for Web3 and crypto peeps. Maybe even you? 

MILKY MEMES

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That's a wrap for today. Stay thirsty & see ya tomorrow! If you want more, be sure to follow our Twitter (@MilkRoadDaily)

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.

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    Milk ManWriter

    This dashing dairy expert is not just your average milkman. He's a tri-athlete, a former classmate of Satoshi Nakamoto, and a crypto enthusiast who loves nothing more than delivering the freshest news and insights straight to your inbox.