To date, Bitcoin has emerged as the most valuable currency and a payment method. After January 2023, it gained a new function and gained functionality in the creation of NFTs, which are referred to as unique digital assets. This is called Bitcoin Ordinals NFT.
NFTs are digital assets built on blockchain technology and typically represent unique digital content such as artworks, music tracks, game content and other types of digital media. When these NFTs are created on Bitcoin, they are called Ordinals NFTs. In this article, you can find many details about Ordinals NFTs and learn how this system works.
What are Ordinals NFTs?
The term Ordinal NFT refers to the generation of NFTs on the Bitcoin blockchain. This is done thanks to the Ordinal protocol. Satoshi is the smallest unit of BTC, equal to 1/100,000,000 of Bitcoin. Individual satoshis are a key to adding or ‘writing’ digital content such as images, videos and more.
Ordinals NFTs refer to NFTs that are uniquely numbered based on a specific sequence or sort order. This enables collectors to collect or acquire NFTs that occupy a specific position within a sequence. This ranking can often be based on a specific theme, a historical event or other criteria.
For example, within a set of NFTs produced by an artist, NFTs that each have a unique sequence number and carry a specific meaning can be called ‘Ordinals NFTs’. This allows collectors to collect sequential NFTs to complete a particular concept or storyline.
Such an ordered NFT collection, combined with the uniqueness and rarity of digital assets, can create a special value for collectors. Having each NFT in a specific ranking can bring more meaning to collectors and deepen the story of digital assets.
What are Ordinal Wallets?
Ordinal Wallet is an unattended Bitcoin wallet that allows users to view, store, buy, sell and trade Bitcoin Ordinals.
11 A Bitcoin wallet with a Taproot wallet address and ‘token control’ is required to interact with the Ordinals protocol. Ordinal Wallet is one wallet that supports these features when conducting regular Bitcoin transactions.
How Do Bitcoin Ordinals Work?
Creating NFTs on Bitcoin is more difficult compared to other blockchains such as Ethereum. The two reasons for this are as follows.
1- Limited Smart Contract Functionality
Bitcoin does not have world-class smart contract functionality like Ethereum. Unlike Ethereum, Bitcoin’s smart contract capabilities are limited. This makes it difficult to create smart contracts with complex functionalities on Bitcoin. Since NFTs are usually created through smart contracts, Bitcoin’s limitations in this respect make it difficult to produce NFTs.
2- Lack of Token Standard
The ERC-721 token standard, popular on Ethereum, standardizes how NFTs are created, transferred and interacted with. Bitcoin, however, does not have this kind of token standard. This means that in Ethereum, NFTs can be created in accordance with a token standard, while in Bitcoin there is no such standard. This makes the creation and management of NFTs on Bitcoin more complex.
“How do Bitcoin Ordinals Work?” Ordinal NFTs are implemented using a special feature called ‘inscription’. This feature starts a process that makes it possible to add unique data.
The Ordinal protocol was developed by Casey Rodarmor. This protocol gives each satoshi the ability to be assigned a unique sequential number. By assigning this number, each satoshi becomes eligible to be equipped with special data. This is exactly where Bitcoin is needed. Once added to the Bitcoin blockchain, this private data can be conveniently viewed through Ordinal-enabled wallets or online Ordinal viewers.
In summary, this process takes place as follows.
- Ordinal Protocol:
The Ordinal protocol is a protocol designed to add unique sequential numbers to the Bitcoin blockchain. It allows a sequential number to be assigned to each satoshi (Bitcoin’s sub-unit).
- Inscription:
Inscription refers to equipping each satoshin with customized data. This data is added to the corresponding satoshis during the Bitcoin transaction. The protocol developed by Casey Rodarmor allows this private data to be associated with a sequential number to each satoshie.
- Bitcoin Transaction:
The addition of special data to each satoshie, identified by a sequential number, is accomplished through a Bitcoin transaction. Once this transaction is confirmed in accordance with the blockchain’s security protocols, the private data is permanently added to the blockchain.
- Permanent Addition to Blockchain:
Private data added to the Bitcoin blockchain is stored in a permanent and immutable way. This ensures the uniqueness and traceability of Ordinals NFTs.
- Imaging and Transfer
Created Ordinals NFTs can be viewed through Ordinal-enabled wallets or online Ordinal viewers. They can also be transferred by their owners and traded between collectors. These platforms offer users the ability to inspect each satoshi, equipped with sequential numbers and associated specific data.
How to Extract Ordinals NFTs?
“How are Ordinals NFTs minted?” shows that they are actually minted in the same way as conventional Bitcoin transactions. Because these are only specialized types of Bitcoin transactions that follow a specific protocol. Additionally, it should be noted that there are two main ways in which Bitcoin Ordinal mining differs from traditional NFT mining:
Bitcoin Ordinals refer to data written directly to the Bitcoin blockchain. While this is also possible on other blockchains such as Ethereum and Solana, NFT information is usually stored in an off-chain location.
Bitcoin uses proof of work (PoW) for the mining process. On the other side, other chains that have been more closely associated with NFTs in the past use proof of stake (PoS).
Advantages of Bitcoin Ordinals NFTs
Bitcoin Ordinals stand out in some ways compared to other types of NFTs. If we look at these advantages:
- Safe
Inscriptions are not stored in side chains. Instead, they are stored directly on the Bitcoin blockchain. This means the following: Ethereum is the opposite of the situation with NFTs. Because in Ethereum, data can be stored off-chain and the digital asset becomes more centralized and volatile. The Bitcoin protocol, on the other hand, makes it possible for Bitcoin users to store their digital artifacts on-chain and instantly redeem them for digital currency.
- Easy and Harmonious Operation
NFTs that are not on the Bitcoin blockchain can run on complex networks and virtual machines. Bitcoin Ordinals, on the other hand, is relatively easy and compliant. This simple nature of inscriptions makes them more secure and less prone to vulnerabilities.
- Flexibility
Satoshi scripts use a data model similar to the web and support any type of content that web browsers can handle without requiring changes to the underlying protocol. This means that there is flexibility for evolving content types.
- Liquidity
It is well known that Bitcoin is ahead of other cryptocurrencies in terms of trading volume and market capitalization. The fact that Bitcoin is so valuable and popular makes Bitcoin inscriptions more liquid than traditional NFTs sold elsewhere.
- Rarity
Bitcoin opened its eyes to the world with 21 million supply. Ethereum has never had a fixed maximum supply. At this point, it should be noted that the inscriptions may be limited in quantity. As such, the limited supply of Bitcoin makes digital artifacts on Bitcoin rarer.
- Ready to Use
The Bitcoin blockchain has been in widespread use for a long time, and given its current value, it’s not a stretch to say that its roots run deep. This means that inscriptions can be created and traded at any time.
- Area of Use
Ethereum and other networks no longer have a monopoly on NFT. Thanks to Bitcoin’s Ordinals, art, entertainment, etc. in particular, the widening of its use case means more user interest shifting to Bitcoin. This can help fund a growing ecosystem.
- Miner Incentive
When block space demand is high, miners can include more transactions in their blocks, allowing them to earn more transaction fees. This creates an incentive for more miners to join the network. Network security can also improve as more miners joining the network will increase the total hashing power of the network and make it harder for attacks to occur.
- Prioritization
Transaction fees prioritize which Bitcoin transaction is processed first. Users who are willing to pay a higher transaction fee can first determine which transactions they want to make. This helps prevent network overload and makes it possible to prioritize valuable inscriptions.
What are Ordinals NFTs?
In fact, there are many Bitcoin Ordinals NFT projects. Although it is not possible to cover all of them in this article, some projects can be mentioned as examples.
Here are some examples of Bitcoin Ordinals NFTs:
- Ordinal Punks
Ordinal Punks may look familiar from Crypto Punks. It is a set of only 100 NFTs minted within the first 650 inscriptions on the Bitcoin blockchain. This collection was built using an open source algorithm from the Web3 generator FlowStay.
- Taproot Wizards
Taproot Wizards is hand-drawn and created by Udi Wertheimer, an independent Web3 developer. The creator of this collection states that the first NFT in the collection set a record on the Bitcoin blockchain as the largest block and transaction with a size of 4MB.
- Bitcoin Rocks
When you first look at the Bitcoin Rocks collection, it is quite likely that Ether Rocks will come to mind. Because this collection carries the spirit and aesthetic of Ether Rocks. The supply of this collection is limited to 100.
- Timechain Collectibles
This collection is very limited with 21 pieces. On January 30, 2023, this collection, created with the theme of time, was printed as a single block. As an inscription, it covers the period between 356 and 377. It consists of NFTs that form different time-related objects such as clocks, monoliths and clock towers.
- Ordinal Loops
Considered one of the lowest numbered inscriptions, Ordinal Loops is an art project dedicated to creative capital, human rights and public discourse. 452. starts from the inscription and consists of a total of 189 different NFTs. An animation of these NFTs was created. In other words, it is made up of moving images, not static ones.
