DeFiChain

<p>If you’ve even a passing interest in crypto, you’ve probably heard people talking about Ordinals. You may be aware that they have something to do with NFTs on Bitcoin but what are Ordinals exactly and why have people been getting themselves so excited over them? After all, aren’t there better suited networks for minting NFTs?</p><p>In this guide we’ll try to get to the bottom of the Ordinals craze and examine how it’s kickstarted a trend for NFTs on the Bitcoin blockchain. We’ll also consider whether this demand is sustainable and whether it represents a tangible new use case for Bitcoin.</p><h3 id="it-all-started-with-ordinals">It All Started With Ordinals</h3><p>Non-fungible tokens (NFTs) are traditionally minted on a smart contract chain such as Ethereum. This is because Ethereum is designed to support a broad range of different token standards including those designed to represent NFTs. Bitcoin doesn’t have that capability: it wasn’t built that way. Its primary role is to ensure the secure transfer of value between network users with strong transaction finality.</p><p>This hasn’t stopped ingenious creators from trying to make Bitcoin backwards compatible, through some clever engineering that enables its Proof of Work chain to hold data relating to other assets – including <a href="https://ordinals.market/" rel="noopener noreferrer nofollow">NFTs</a>.</p><p>Ordinals is a protocol that enables the smallest units of bitcoin, known as sats, to be sent on the Bitcoin network with a data attachment. With 100 million sats per bitcoin, that’s a whole lot of transactions that can be made between users, with the microscopic value of BTC being transferred in each instance serving only as the host: it’s what attached to it that has value.</p><p>Ordinals were created by Casey Rodarmor who has described his invention as “digital artefacts” rather than NFTs, not least because you can also attach text and other items to sats using this system. What Rodarmor has done with Ordinals is develop a system for associating each satoshi on the Bitcoin network with, for example, a digital file hosted elsewhere.</p><p>The only limits to what can be sent with a satoshi are your imagination. Technically, when a sat is transferred, the object that’s attached to it isn’t moving: it remains as a static image on IPFS, say. But what the Bitcoin blockchain with Ordinals does is provide a system for tracking and transferring these sats, effectively cataloguing and ordering all kinds of data stored elsewhere.</p><p>The concept is so compelling that you might wonder why no one thought of it sooner. Bitcoin has been in operation for 14 years after all. Well, until late 2021, it wasn’t possible to do this with the Bitcoin blockchain. Taproot, a network upgrade that appeared then, introduced the ability to inscribe data to specific transactions using the Tapscript language.</p><h3 id="bitcoin-gets-its-punks">Bitcoin Gets Its Punks</h3><p>Bitcoin is the home of the original cypherpunks: early adopters of the technology, some of whom were influential in shaping cryptography and attitudes to digital privacy in the 90s. Now, Bitcoin has its own collection of Crypto Punks, the phenomenally popular (and valuable) OG NFTs that trade for hundreds of thousands of dollars on Ethereum. In February, a Bitcoin Punk NFT sold for <a href="https://dematerialzd.substack.com/p/bitcoin-ordinals-from-magic-internet" rel="noopener noreferrer nofollow">9.5 BTC</a> as the cryptosphere went Ordinals crazy.</p><p>While it would be easy to dismiss Bitcoin NFTs as merely a passing fad, interest in the phenomenon remains strong so far. In February, Bitcoin blocks began filling up with 1 sat transactions as speculators rushed to create and transfer Ordinals. Meanwhile, dedicated NFT marketplaces began springing up to cater to demand.</p><p>NFT collectors are known to covet digital tokens that are particularly rare. For example, those with unusual attributes, or 1:1 versions. The same holds true of Ordinals on Bitcoin. Rodmarmor designed a ranking system for determining the rarity of each sat, with the rarest one of all being the first satoshi to appear in the genesis block, which is classified as mythic. Using this system, a rare sat, for example, is the first one to appear after each new BTC difficulty adjustment period.</p><h3 id="creating-your-own-ordinal">Creating Your Own Ordinal</h3><p>So how do you go about minting an Ordinal on the Bitcoin blockchain? Services such as <a href="https://ordinalswallet.com/" rel="noopener noreferrer nofollow">Ordinals Wallet</a> provide a means for anyone to create a Bitcoin-based NFT, with no technical knowledge required. The site also allows users to browse popular Ordinals collections such as Bitcoin Punks, Bitcoin Wizards, and BTC Machines. Then there are services like <a href="https://ordinalsbot.com/" rel="noopener noreferrer nofollow">Ordinals Bot</a> that also inscribe data to the Bitcoin chain on demand.</p><p>With third party services now providing a <a href="https://twitter.com/LeonidasNFT/status/1628438532137025537?ref_src&#61;twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1628438532137025537%7Ctwgr%5Ebb66074f101be2958aa423d8649ef11e3e657a68%7Ctwcon%5Es1_&amp;ref_url&#61;https%3A%2F%2Fbeincrypto.com%2Flearn%2Fbitcoin-nfts%2F" rel="noopener noreferrer nofollow">way</a> for viewing and storing Ordinals in MetaMask’s popular web wallet, it’s safe to say there’s a lot more to come from Bitcoin NFTs. They provide a new use case for the Bitcoin blockchain, commemorate historic moments in crypto history, and provide a talking point for everyone from Bitcoin OGs to NFT flippers. And with 2.1 quadrillion satoshis to play with, collectors won’t be short of sats to inscribe any time soon.</p>

The Beginner’s Guide to NFTs on Bitcoin

Tabla de contenidos

DeFiChain

Otros artículos publicados el 28 abr 2023

First Mover Asia: China’s State-Owned Banks Are Soliciting Hong Kong Crypto Business, but Opening...

Russia Postpones CBDC Pilot, Waiting for Legislation to Pass

How to choose your nano representative

3 cryptocurrencies to avoid trading in April

IoTeX is building the future of mobility on DIMO

Chicago Trading Firm Radix Caught in Binance Legal Battle

¡Únete a nuestro boletín gratuito para recibir actualizaciones diarias de criptografía!