Bitcoin Ordinals are a method of inscribing data such as images, text, or token metadata directly onto individual satoshis, made possible by the SegWit and Taproot upgrades without requiring any change to Bitcoin's core consensus rules. BRC-20 is a token standard built on top of this inscription mechanism, and together they created a new source of demand for Bitcoin blockspace that didn't exist before.
How inscriptions actually get onto the chain
An inscription attaches data to a specific satoshi by writing it into a transaction's witness field, the same part of a transaction that SegWit introduced to hold signature data separately from the main transaction body. Because witness data is discounted, someone inscribing an image or a token record pays substantially less than they would if that data were stored in the transaction's standard fields, which is part of why inscription activity can scale up so quickly when demand rises.
What it means for miner economics
Bitcoin's block subsidy cuts in half roughly every four years, which makes transaction fees an increasingly important part of what actually funds network security over the long run. Periods of heavy inscription activity have shown that demand for Bitcoin blockspace doesn't have to come only from ordinary payments. A wave of inscriptions can generate substantial fee revenue for miners on its own, independent of whether Bitcoin's price is going up or down at the time.
What it means for anyone sending a transaction
When inscription activity surges, it competes directly with regular transactions for the same limited blockspace, and mempool backlogs can grow along with average fee rates measured in satoshis per virtual byte. Anyone with a time-sensitive transaction during one of these periods should check current mempool conditions before broadcasting, and using a wallet with Replace-By-Fee enabled makes it possible to bump a transaction's fee after the fact if the network gets more congested than expected.