Bitcoin NFT Status: Innovative Applications Drive Ecological Development

Although Bitcoin on-chain NFTs have only emerged for a little over a month, they are already viewed as a huge potential market. Research institutions predict that the market size of Bitcoin NFTs will reach $4.5 billion by 2025, with a trading volume of $1.6 billion. Moreover, the development of Bitcoin NFTs may also promote the growth of the entire Bitcoin ecosystem, increase network usage, and benefit miners' earnings.

As of March 7, a total of 328,800 NFTs have been generated on Bitcoin, with an average daily increase of 7,148. Among them, there are 208,800 images and 117,400 texts, with a notable recent growth in text NFTs. The main trading market has accumulated a total trading volume of approximately $6.99 million from February 15 to March 7, and the current total number of unique addresses has exceeded 10,000.

The rapid development of NFTs has brought some obvious changes to the Bitcoin network:

1. The adoption rate of Taproot transactions has significantly increased, rising from 1.79% to 6.22%, and at one point nearly reached 10%.

2. The number of transactions increased moderately by 9.79%, and the average daily computing power rose by 7.81%.

3. NFTs have become a major factor in increasing miners' fee income. The fees generated by NFTs rose from 0.00066 BTC in a single day to 0.28428 BTC, an increase of 43257.73%. In mid-February, NFT fees once broke through 21%, remaining above 15% for several consecutive days.

4. During the statistical period, the average transaction fee for every 10,000 NFTs accounted for 12.47% of the total fee income for miners, indicating that the growth in the number of NFTs will significantly impact miners' income.

5. The current Bitcoin NFT activities are still within the network's capacity, and have not squeezed out other transactions. The average block weight accounts for about 87.78% of the total capacity, leaving room for more.

With the further development of NFTs, there may be more complex impacts on the fundamentals of the Bitcoin chain in the future, especially in terms of mining fundamentals. The centralized minting of NFTs may exacerbate short-term fluctuations in transaction fees, while in everyday situations, NFT activities may increase the utilization of block space in the long term. This could spur the development of Bitcoin's second-layer networks, as well as improvements in other infrastructure such as user-friendly wallets.