NFTs could give Bitcoin a face lift as it increases its blockchain demand

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Welcome back to Chain Reaction.

The past few weeks in crypto land have been focused on the latest craze: Ordinals.

What are Ordinals, you might ask? They’re NFT-like Bitcoin digital artifacts that are on the blockchain.

While the project isn’t the first to try to bring NFTs onto the Bitcoin blockchain, it’s definitely gaining the most traction today.

About 122,500 Ordinals have been inscribed, which is jargon for created (or minted), to date, according to Dune Analytics data. The number of total inscriptions is up 40% from about 88,000 on Tuesday. On February 8, the number of Ordinals inscribed peaked over 21,000, and Wednesday was the second highest day with over 17,7000, the data showed.

“It has really escaped, it’s gone nuclear,” Casey Rodarmor, the creator of Ordinals, shared with TechCrunch. “There are people building things that I don’t even hear about until they’ve launched. So it’s really about where people want to take this.”

Although things have started off strong, time will tell on whether or not the project will continue to grow and compete with major NFT ecosystems on chains like Ethereum and Solana.

More below.

This week in web3

Ordinals creator views his Bitcoin-centric creation as digital artifacts, not just NFTs (TC+)

TechCrunch sat down with the Ordinals creator to discuss the inspiration for the NFT-like Bitcoin project that is expanding rapidly. “I thought I was building something good and I thought I was meeting an unmet market demand that NFT collectors had expressed a desire for,” Rodarmor said. And by the current market’s response, his creation did in fact meet that demand.

Crypto exchange Binance expects to pay penalties to settle US investigations

Binance, the world’s largest crypto exchange, expects to pay monetary penalties to settle probes into its business in the U.S., a top executive said, in a major about-face after publicly disputing the idea that it was under any investigation and mocking media outlets that reported otherwise. In an apparent admission of breaking laws, Binance chief strategy officer Patrick Hillmann told the WSJ that the company’s executives were unfamiliar with laws and rules written surrounding bribery, corruption and money laundering.

Bitcoin NFTs are growing quickly as community sees long-term potential (TC+)

Following the theme of Ordinals, TechCrunch also spoke to a handful of experts on what Ordinals’ growth means for the Bitcoin ecosystem. Even though Ordinals and Bitcoin NFTs in general are exploding, it’s still in very early stages, especially when compared to behemoths like Ethereum and Solana. “If Bitcoin wants to stay the most decentralized, widespread and prolific cryptocurrency, it needs something like [Bitcoin NFTs] to push it forward,” Alex Adelman, co-founder and CEO of Bitcoin-rewards platform Lolli, said.

SEC’s proposal could affect which crypto companies can manage assets (TC+)

The U.S. Securities and Exchange Commission proposed a new rule on Wednesday that may back crypto companies further into a corner as regulators continue to crack down on the space. The SEC voted 4-1 for a proposal that would direct registered investment advisers (RIAs) — like wealth managers or hedge funds — to keep customers’ money and securities with qualified custodians like a bank, broker-dealer or trust company when storing digital assets, mainly leaving crypto companies on the outskirts.

Want to buy an NFT with your credit card? Magic Eden lets you do just that (TC+)

One of the biggest complaints in the crypto world is that using the technology is, you know, kind of difficult. But as the ecosystem evolves, many big players are trying to alleviate the issue through new on-ramps or payment solutions. MoonPay, a web3 infrastructure company, has joined forces with Magic Eden, one of the biggest NFT marketplaces, to help make NFTs more accessible through old-school tricks, the companies announced on Monday.

The latest pod

We released a fun bonus episode this week, which dives into TechCrunch’s newest podcast: Inside Startup Battlefield, which is a four-part series that takes you behind the Startup Battlefield competition.

For last week’s episode, Jacquelyn talked to Gwendolyn Regina, investment director at layer-1 blockchain BNB Chain. Prior to her current role, Gwen worked at Facebook, or as some call it now, Meta, building up a new business unit for venture capital partnerships and startup growth. She’s also a founder of a few different businesses and a founding team member for early-stage tech investment firm Thymos Capital.

BNB Chain was launched in 2020 and initially kicked off by Binance, the world’s largest crypto exchange by trading volume. Since then, BNB Chain aims to be a decentralized, community-owned separate entity from Binance with a focus on three audiences: retail markets, builders and developers, and bridging Web 2.0 businesses to web3, Regina shared.

Gaming on BNB Chain also has grown “organically through robustness and cheaper fees,” but the blockchain’s team is now “doubling down” in that sector to encourage more gamers and developers to play and build on its chain, Regina added.

We also discussed:

  • The dApps developers are building on-chain
  • BNB’s investing strategy
  • What investors look for in founders
  • Advice to startups launching in a bear market

Subscribe to Chain Reaction on Apple Podcasts, Spotify or your favorite pod platform to keep up with the latest episodes, and please leave us a review if you like what you hear!

Follow the money

  1. Stelo Labs raises $6 million in a16z-led round to help crypto wallet users protect themselves
  2. Crypto index platform Alongside raises $11 million led by a16z
  3. Monad Labs raises $19 million to grow its smart contract platform and improve the Ethereum space
  4. Caldera raises $9 million from two rounds led by Sequoia and Dragonfly Capital
  5. Ironblocks raises $7 million to protect decentralized finance and web3 from threats and theft

This list was compiled with information from Messari as well as TechCrunch’s own reporting.

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