You've probably heard about NFTs, but did you know they're now entering the world of Bitcoin?
I know, my first reaction was WTF? because well. NFT’s are a crypto thing and not a Bitcoin thing.
Bitcoin Ordinals are controversial in the Bitcoin community and I’ll explain in more details at the end of this guide.
While some see Bitcoin Ordinals as an innovative step forward, leveraging the security and robustness of the Bitcoin blockchain for NFTs, others perceive them as unnecessary and potentially harmful deviations from Bitcoin's original mission.
What are Bitcoin Ordinals?
Ordinals are a numbering scheme for satoshis that allows tracking and transferring individual sats. These numbers are called ordinal numbers. Satoshis are numbered in the order in which they're mined, and transferred from transaction inputs to transaction outputs first-in-first-out. Both the numbering scheme and the transfer scheme rely on order, the numbering scheme on the order in which satoshis are mined, and the transfer scheme on the order of transaction inputs and outputs. Thus the name, ordinals.
Ordinal numbers are serial numbers for satoshi. Every satoshi, which is ¹⁄₁₀₀₀₀₀₀₀₀ of a bitcoin, has an ordinal, and every ordinal has a satoshi.
Ordinals are a project started by Casey Rodarmor to bring collectable sats, and eventually, digital artifacts like art and NFTs, to Bitcoin.
From the ordinals website, Casey describes Digital Artifacts like this.
Inscriptions
Ordinals are a way to create Bitcoin-based NFTs by attaching special data to tiny bits of Bitcoin called satoshis.
The process is called "inscribing."
Think of it like engraving a message on a coin.
Until now, we've mostly seen NFTs on platforms like Ethereum and Solana, but the Ordinals project is breaking new ground by bringing it to Bitcoin.
Inscriptions inscribe sats with arbitrary content, creating bitcoin-native digital artifacts, more commonly known as NFTs. Inscriptions do not require a sidechain or separate token.
A text inscription containing the string "Hello, world!" looks like this:
OP_FALSE
OP_IF
OP_PUSH "ord"
OP_PUSH 1
OP_PUSH "text/plain;charset=utf-8"
OP_PUSH 0
OP_PUSH "Hello, world!"
OP_ENDIF
Here is a recent Inscription showing all of the data points.
How Do They Work?
The Ordinals system gives each tiny satoshi a unique number, sort of like a serial number. This allows us to make each satoshi distinct.
These numbers depend on when the satoshi was created or how it's been used.
Unlike regular NFTs that live on separate platforms, these ordinals are stamped right onto Bitcoin's own blockchain, making them as secure and long-lasting as Bitcoin itself.
Ordinal Types and Ranks
These inscribed satoshis can be categorized based on their uniqueness:
Common: Just any regular satoshi.
Uncommon: The very first satoshi in its block.
Rare: The lead satoshi when there's a change in Bitcoin mining difficulty.
Epic: The first satoshi after Bitcoin's supply is cut in half.
Legendary: The top satoshi in a cycle, a special period in Bitcoin's timeline.
Mythic: The granddaddy of them all, the first ever satoshi from Bitcoin's beginning.
See inscriptions using this Ordinals Explorer
The Debate Around Ordinals
As cool as they sound, not everyone's a fan.
At its core, Bitcoin was designed as a decentralized currency, with a primary focus on peer-to-peer value transfer. Some purists believe that introducing features like NFTs via Ordinals diverts from Bitcoin's original purpose.
Some believe Bitcoin should stay simple, just for transferring value, while others feel it's time to explore new uses.
There's also a concern about these inscriptions hogging space and pushing up transaction fees. But some argue that these fees could encourage miners to keep the Bitcoin network safe.
Any change or addition to the Bitcoin ecosystem, even if not to the core protocol itself, is scrutinized for potential security vulnerabilities it might introduce.
Some may be concerned about how Ordinals could influence the economics of Bitcoin, from affecting miner incentives to potentially creating new speculative bubbles.
One of Bitcoin's strengths lies in its simplicity. Introducing new features and functionalities might make the system more complex, potentially opening the door to more points of failure.
Some might argue that other blockchains, specifically designed for NFTs or smart contracts (like Ethereum), are better suited for these functions. Trying to retrofit Bitcoin to accommodate similar features might seem redundant.
Increased activity, especially if Ordinals become highly popular, could lead to network congestion, causing delays in transaction confirmations.
Bitcoin Ordinals are opening a fresh chapter in the Bitcoin story by introducing a new way to store and showcase digital content. It's a shift from the usual ways we've used Bitcoin, and whether this trend sticks around, well, let's watch and see.
Stay curious, and until next time!
What do you think?
More on Ordinals
Ordinal Theory Explained: Satoshi Serial Numbers and NFTs on Bitcoin
Ordinals Discord: https://discord.gg/ordinals
Ordinals on Github: https://github.com/casey/ord
Ordinal Theory Explained: https://rodarmor.com/blog/ordinal-the...
Ordinal Block Explorer: https://ordinals.com
Bitcoin Clock: https://ordinals.com/clock