Bitcoin Ordinals have fundamentally transformed the blockchain landscape by enabling direct data embedding, including tokens and images. This innovation has sparked crucial discussions about resource allocation and node operator responsibilities. Recent BitMEX research provides compelling insights into how these developments affect Bitcoin’s core infrastructure.
Bitcoin Ordinals: Dominance and Data Distribution
Bitcoin currently hosts approximately 97.4 million Ordinal inscriptions. Surprisingly, BRC-20 token transactions dominate this space with 92.5 million entries. Image inscriptions represent only 2.7 million transactions. Consequently, BRC-20 inscriptions constitute the overwhelming majority of network activity.
Data storage patterns reveal interesting contrasts. Although fewer in number, image inscriptions occupy 30.0 GB of blockchain space. BRC-20 transactions use slightly less at 27.8 GB. Therefore, both inscription types contribute significantly to blockchain storage demands.
Blockweight and Validation Costs Analysis
Blockweight measurements show distinct patterns. BRC-20 inscriptions account for 13.9 billion weight units. Images use approximately 8.9 billion weight units. Researchers discovered crucial differences in validation requirements.
Image inscriptions benefit from Taproot witness discounts. They avoid signature checks during validation. Conversely, BRC-20 inscriptions function like standard transactions. They require full signature verification. This distinction significantly impacts node computational loads.
UTXO Expansion and Long-Term Node Concerns
The unspent transaction output set has experienced dramatic growth. Between December 2022 and September 2025, UTXO entries doubled from 84 million to 169 million. BRC-20 tokens primarily drive this expansion. Each inscription creates persistent outputs in the set.
This growth particularly strains pruned nodes. These nodes discard older block data but must maintain current state information. Additionally, BRC-20 inscriptions pay higher fees due to ineligibility for witness discounts. They have contributed over 5,000 BTC in transaction fees since launch.
Performance Testing and Verification Impact
BitMEX conducted comprehensive performance testing using Bitcoin Core version 29.1. Their setup featured eight CPU cores and 8 GB of memory. Researchers measured block download and verification speeds against Ordinal data levels.
Test results revealed a weak positive correlation. Larger Ordinal data sometimes associated with faster verification speeds. With “assume valid” disabled, the correlation strength increased to R=11%. This testing method reflects real-world node operation conditions more accurately.
Network Implications and Future Considerations
Bitcoin Ordinals present both challenges and opportunities. They generate substantial transaction fee revenue. However, they also consume significant blockchain resources. Node operators must balance these factors when managing network participation.
The research emphasizes that large Ordinal images aren’t inherently beneficial. They potentially limit space for financial transactions. Nevertheless, they might offer minor advantages for certain node operations. Network participants should carefully evaluate these trade-offs.
Frequently Asked Questions
What are Bitcoin Ordinals?
Bitcoin Ordinals are inscriptions that embed additional data directly into the blockchain. They enable token creation and image storage on Bitcoin’s network.
How do BRC-20 tokens differ from image inscriptions?
BRC-20 tokens dominate transaction volume while image inscriptions use more storage space. BRC-20 requires full signature verification unlike images that get witness discounts.
What is the main concern about UTXO growth?
UTXO expansion strains node resources, particularly for pruned nodes that must maintain current state information while discarding older data.
How do Ordinals affect transaction fees?
BRC-20 inscriptions have generated over 5,000 BTC in fees since launch because they don’t qualify for witness discounts and pay standard transaction rates.
What was BitMEX’s key finding about verification speed?
Researchers found an 11% correlation between larger Ordinals and faster verification speeds when “assume valid” was disabled during testing.
Should node operators welcome Ordinal inscriptions?
The research doesn’t endorse Ordinals as universally beneficial. Operators must consider both the fee revenue and increased resource demands when evaluating their impact.
