The latest hottest thing on the Bitcoin network are NFTs. There seems to be no escape from the magic internet jpegs. Not even for Bitcoin. 

I haven’t explored deep enough to fully understand how NFTs on Bitcoin works, but in short it goes like this. 
Bitcoin NFTs are represented by one satoshi. The smallest Bitcoin denominational unit on Bitcoin. Each satoshi is unique and has its number. Then something called the **Ordinals protocol** is used to inscribe a text on the satoshi. This text can be used to generate a low resolution image. After the Satoshi is inscribed with the text, then it can be transferred buy/sold as an NFT. Inscriptions are made only by the ones running a full bitcoin node. To be able to trade them there is more tech things, and a lot of the trades at the moment seems to be happening trough escrows third party in the Ordinals discord.

More info about the Ordinals project and Bitcoin NFTs in the posts from [Forbes](https://www.forbes.com/sites/leeorshimron/2023/02/11/nfts-are-bloating-bitcoin-creating-risks-and-opportunities-for-crypto-investors/?sh=47218bad7d77) and [NFTNow](https://nftnow.com/guides/bitcoin-nfts-ordinals-inscriptions-explained-finding-buying-more/).
It is sufficient to say that NFTs on Bitcoin have caused a lot of controversy as the Bitcoin purist are not a fans of them. 


![1.png](https://images.hive.blog/DQmXPn5mCLUeWD7BGimfZ9d6GUTnyFfZb3a33HpyybYDuR3/1.png) 


With this said lets take a look at the Bitcoin network data, and how have these Bitcoin NFTs impacted the network. 

We will be looking at:
-	Total number of wallets
-	Active wallets
-	Hash rate
-	Number of transactions
-	Fees

The data presented here is mostly gathered from [the blockchains charts](https://www.blockchain.com/charts).


## Number of Wallets
Here is the chart for the total number of Bitcoin wallets created.



![image001.png](https://images.hive.blog/DQmfYgkjTtHjEQ4AdDqnB9zWMba4M1HbX3tUPhe9xZMU3U5/image001.png) 



Bitcoin stands at **86M** wallets now. 

When we **zoom in 2022** we goth this.


![image003.png](https://images.hive.blog/DQmRxbgr3BYiwWTD2ZhKMrWRipRG34kM5jM3Egs5Wm2bg7m/image003.png)


At the begging of the 2022 there were more than 40k wallets created daily. These numbers have dropped since then and the low was somewhere in August. Since then the number of new Bitcoin wallets is around 5k daily. There is another spike in the numbers of new wallets created at the end of 2022, where for a few days there was more than 100k new wallets per day.

The creation of new wallets on Bitcoin has slowed down in 2022. 


## The Yearly Chart For New Bitcoin Wallets

The chart for the number of new Bitcoin wallets per year looks like this.
 


![image005.png](https://images.hive.blog/DQme57cnhbWtKhKtkxFgrQK6GwQgbkYSeymmg15usePQ4hV/image005.png)



We can see that the ATH for new wallets is in 2020 with around 19M Bitcoin wallets created in that year. In 2021 there is almost 17M bitcoin wallets created, even though BTC has seen a massive run-in price especially in the first half of 2021. Most likely because new users are using custodial wallets. 
In 2022 we have 5.5M new wallets. The slow down in new wallets creation is obvious. 


## Active Wallets
How many of the are being used? 
Here is the chart.

 
![image007.png](https://images.hive.blog/DQmX7d1kipDn1bMXX12ekrbpFSAg6bZTxQZN4ErEsaeHKZT/image007.png)


The record high numbers for active Bitcoin wallets per day was reached in December 2017 with almost 1M active Bitcoin wallets. A sharp drop in 2018 to the 400k daily active wallets, and a steady growth since then. 


### When we zoom in 2022 - 2023 we get this:


 
![image009.png](https://images.hive.blog/DQmamXKiqUQQYCRaJeHRiLkmdfmTZLenxmLcRC5btB4qHUV/image009.png)



A very steady number with around 700k active wallets. The drop in the price didn’t impacted this chart at all. 
There has been a recent uptick in the numbers of active wallets going up to 800k for a short period of time.


## Transactions 
The activity on the network is mostly represented by the number of daily transactions.

 


![image011.png](https://images.hive.blog/DQmaC6e3F8FQvnUYHxxeQr7aM5Ej4T78iruttBuH5G2FAcK/image011.png)



A steady number of transactions in the last period up until recently. We can clearly see the increase in the transactions staring from January and going even stronger in February. From around 250k tx per day up to 370k at the peak. Now we are somewhere around 300k. 
This chart is the most telling about the impact that the Bitcoin NFTs have on the network.

## Hash Rate
The ultimate Bitcoin value is the network stability and security. The network security in a proof of work chains is measured in hash rate, or how difficult is to mine. The bigger the completion, the higher the hash rate.


 

![image013.png](https://images.hive.blog/DQmV7Qwd1F7xLNguSLVuyaAtDBByrLtMtoJRMzG8Poh3D1Y/image013.png)



Almost constantly going up with few dips here and there. The most significant dip happened in the summer of 2021 when China banned mining. We can see yet another one just happened recently, but recovered since then.

### When we zoom in 2022 - 2023 we get this:

 

![image015.png](https://images.hive.blog/DQmWgPVK7V8pNBzv2GFWtfky6GLwuYGd4WqsWfMDF7uTUL8/image015.png)


A dip in November from 270M TH/s to around 230M TH/s and a fast recovery since then. It almost hit 300M TH/s in the last weeks. 


## Fees
A bit unpopular topic the fees. 

 

![image017.png](https://images.hive.blog/DQmfVCS72gjtPiHdKRW2r4B7rgMaHz4xWudh4MRTyyD9pRV/image017.png)



There has been an overall downtrend throughout 2022, but we can see a slight increase in the last weeks as well. Still quite low fees for the Bitcoin network with fees between one to two dollars per transaction.


## Hash Rate VS Price
When we plot these two together, we get this. 


 

![image019.png](https://images.hive.blog/DQmcaT24Wttf1kMEMpBWC6KFw7xov37g8LJP9zG2oaVjhae/image019.png)



Even with the recent dip in the Hash rate the overall picture is still up. The hash is now at 290M TH/s. Almost invers correlation between these two, showing that the miners are quite resilient. 

For the other metrics the most noticeable is the number of transactions that has increased from 250k per day to more than 300k, with a recent high of 370k. The NFTs are clearly having an impact here. 


All the best
@dalz

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