STX (Stacks) Surges Amid Bitcoin NFT Craze, While Blockchain Limitations Raise Concerns

Stacks, an early blockchain to offer a method for minting Bitcoin (BTC) gives birth to the project Ordinals, who is well-positioned to take advantage of the NFT hype.

However, there are concerns that the surge in activity could lead to network congestion and test Bitcoin maximalist ideologies.

Additionally, Stacks is facing competition from other blockchain projects and is yet to provide all the functionalities required to support an NFT trading ecosystem. Technical and fundamental analyses suggest that the price surge may have reached overbought conditions and could correct in the near term.

While the recent focus on inscribing NFTs on the Bitcoin network has gained significant attention, the infrastructure for Bitcoin NFT trading remains underdeveloped. This is in contrast to Ethereum, which has more complex decentralized trading activities. The Bitcoin developer community has previously discouraged using the network for anything other than payments due to the potential for network congestion and increased transaction fees.

The adoption of Ordinals will depend on the social acceptance of inscribing additional data on the Bitcoin blockchain, which could present challenges such as network congestion and increased fees. The number of Ordinals inscribed on Bitcoin surged at the start of February, but the trend slowed due to a lack of trading infrastructure.

Despite the hype around Bitcoin NFTs and an upcoming upgrade to the project, the activity on the Stacks blockchain remains low. Stacks’ native token, STX, has risen by 256% in February on speculation. However, it remains to be seen how the Bitcoin community will react to an increase in network congestion and fees if the Ordinals hype grows. Stacks aims to make Bitcoin Ordinals more accessible to users by facilitating minting processes and hosting marketplaces.

As my first article I hope this was informative, I look forward to growing with anyone who finds my writing helpful.

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Kurinsi