Bitcoin Ordinals: Determinants and impact on total transaction fees

Louis Bertucci

Research in International Business and Finance, 2024, vol. 70, issue PA

Abstract: Bitcoin Ordinals are on-chain non-fungible assets native to the Bitcoin blockchain. As the data is stored on-chain, by opposition to Ethereum-like NFTs, creating an ordinal (i.e. “inscribing” it) can be expensive. We analyze the initial wave of Ordinals from December 14th 2022 until April 16th 2023. We show that ordinal inscriptions tend to have a lower fee rate than regular transactions. We also show that a high average block transaction fee rate is associated with lower ordinal inscriptions. These effects are larger for large inscriptions. This suggests that ordinal users are careful when setting the fee rate of their inscriptions. We also show that both the transaction fee rate for non-inscription transactions and total block fees have increased with the popularity of Bitcoin Ordinals, increasing miners’ revenue.

Keywords: Bitcoin; Blockchain; Ordinal; Non fungible assets; Transaction fees (search for similar items in EconPapers)
JEL-codes: D23 G29 L14 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:70:y:2024:i:pa:s0275531924001314

DOI: 10.1016/j.ribaf.2024.102338

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