Bitcoin Ordinals have taken Web3 and Bitcoin by storm. Casey Rodarmor, a software engineer, launched the Ordinals protocol on the 21st of January, 2023. As of now, No more than 130,000 ordinals exist at the time of writing. However, Ordinals have divided the Bitcoin community between those who believe that the blockchain should be used only for financial transactions and others who believe that the network can handle multiple applications, including NFTs.
This article will take a closer look at bitcoin Ordinals, understand how they came about, and how you can purchase your own.
NFTs on Bitcoin? What Are Bitcoin Ordinals?
Developers have been working to bring non-fungible tokens (NFTs) to the Bitcoin blockchain for well over a decade. The first serious attempt at this was by Counterparty way back in 2014. Counterparty is also the creator of the Rare Pepe NFT collection, one of the oldest NFTs in existence. Ordinals allow users to mint NFTs directly onto the Bitcoin blockchain along with all associated content, such as videos or images. Launched in January of this year, the Ordinals protocol enables users to interact with and exchange individual Satoshis with unique data inscribed.
Each individual bitcoin (BTC) can be broken down into 100,000,000 Satoshis (sats). Users operating Bitcoin nodes can inscribe individual Satoshis with data through the Ordinals protocol, creating an Ordinal. This data also includes smart contracts, which could enable NFTs on the bitcoin blockchain. The Ordinals protocol takes advantage of the changes included in the Bitcoin Taproot upgrade, allowing users to place NFT data directly on-chain, giving them a new and unique method of exploring, transferring, and receiving NFTs.
Ordinals have amassed a staggering number of inscriptions in a matter of days. Their creator, Casey Rodarmor, does not refer to them as NFTs. Instead, he refers to them as digital artifacts. These “digital artifacts” use Ordinal Theory to mark and track the data embedded in the blockchain, also called inscriptions.
Generally, an ordinal refers to any number that defines a specific position in a series. In the case of Bitcoin Ordinals, the ordinal refers to a UTXO (unspent transaction output) for a specific Satoshi containing an inscription with the content. This content can be anything, such as an MP3, text, or image. Satoshis that are inscribed are defined as special transactions that users can track.
How Do They Work?
Ordinals use two recent innovations to function:
- They utilize the segregated transaction witness section of the Bitcoin block.
- Ordinals also utilize tapscripts, which was introduced with the Taproot update.
By leveraging these innovations, Ordinals are able to store the NFT content (image/video/gif) directly on-chain and not just as a reference like other NFT standards. Ordinal NFTs also hold a significant advantage over counterparty NFTs because they do not feature any data limit besides the 4MB data limit placed on the transaction witness field. Adding data in the witness field of a SegWit transaction is cheaper, which plays a crucial role in making Ordinal NFTs possible.
How Can You Buy And Sell Ordinals
Until recently, those wishing to store or transfer their Bitcoin Ordinals Inscriptions did not have a dedicated wallet interface. However, this scenario has rapidly changed, with three new wallets announcing support for Bitcoin Ordinals. These are the Ordinals Wallet, Xverse, and the Hiro Wallet. While the wallets we have listed here may have limited functionality for the moment, they are a good place to start. However, if you wish to avoid going down this route, you can also set up a Bitcoin wallet and customize it to receive Ordinal inscriptions. You can follow this tutorial about setting up an Ordinal compatible wallet.
Currently, the Ordinals market is entirely OTC (Over The Counter) or peer-to-peer trading. To find Ordinal projects, you have to use the Ordinals Discord channel, where you can check what projects are currently in the market. The channel hosts several creators who link their individual Discord servers where you can purchase the Ordinals. Several efforts are underway to create more seamless methods of inscribing on bitcoin and creating wallets that make it possible to view the NFT once created.
Stacks-based Bitcoin NFT marketplace Gamma has started offering a paid service that enables users to inscribe images and text. Several other projects also provide similar services, including Oridalsbot, a service created by the team at the Satoshibles NFT collection. Hiro systems have also announced plans to roll out support for Ordinals on the Hiro wallet, and so has Xverse, a Bitcoin-based web wallet.
Notable Ordinal Inscriptions
The growth of Ordinals can only be described as staggering, with surging interest reported only weeks after going live. Some individual Ordinals sell for hundreds and thousands of dollars. One of the most notable projects to emerge is Ordinal Punks. Ordinal Punks are like an homage to the original CryptoPunks and are a set of 100 Bitcoin NFTs that have been minted within the first 650 Inscriptions on the Bitcoin blockchain.
Another prominent project is Taproot Wizards, an Ordinals collection of hand-drawn NFT wizards created by Udi Wertheimer. The project also features the largest block and transaction in the history of bitcoin at an eye-popping 4 MB. There is also the Ethereum-based OnChainMonkeys collection. The OnChainMonkeys team minted 10,000 Ordinals into a single Inscription with Inscription 20,219. The collection was also one of the first 10k collections on bitcoin. Remember, the Ordinals market is still in its infancy, and as it matures, we could see a number of new and innovative collections emerge.
In Closing: How Will Ordinals Benefit Bitcoin?
Several developers, such as Udi Wertheimer, believe that Bitcoin NFTs will positively impact the larger Bitcoin ecosystem by incentivizing developers to build on the network and improve security. Ordinals have also led to a spike in transaction fees and average block size on the Bitcoin blockchain. Wertheimer believes that by driving up transaction fees, Ordinals will incentivize miners to secure the network as revenue from mining rewards dries up.
If you want to be an early mover in the Ordinals market, you have to be ready for a complex series of processes. However, while it may seem tedious, there is plenty of reason to believe that Ordinals are full of potential waiting to be unleashed.