With the growing popularity of NFTs on the Ethereum blockchain, a new trend emerged in 2023: NFTs on Bitcoin. These are not your typical NFTs; they are known as Ordinals or Ordinal NFTs, and they function differently from their Ethereum counterparts.
This article explains the mechanics of Ordinals, how to purchase them, and even how you can create your own.
The Core Concept of Ordinals
Ordinals are a type of NFT created based on the Ordinal Theory. Before their inception, most NFTs were built using smart contracts on networks like Ethereum. The introduction of Ordinal Theory enabled the creation of NFTs on blockchains that don't natively support smart contracts, like Bitcoin.
Although born on the Bitcoin chain, the Ordinals protocol is now expanding to other blockchains, such as Litecoin.
How Ordinal Theory Works: Serializing Satoshis
The foundation of Ordinals is the Ordinal Theory, a method of assigning a unique serial number to each satoshi.
A satoshi is the smallest unit of Bitcoin (BTC), where 1 satoshi = 0.00000001 BTC (one hundred millionth of a Bitcoin). Ordinal Theory assigns a unique number to every satoshi ever mined, giving each a distinct identity. For instance, the first satoshi mined is number 1, and the 100,000,000th is number 100,000,000.
Inscribing Data onto Satoshis
An Ordinal is created by inscribing data—such as an image, text, or video—onto a specific satoshi. This process is called inscribing, and the inscribed data is known as an Inscription (like an engraving).
Each Inscription is also assigned a number based on the order it was created (e.g., Inscription #1, Inscription #2). Generally, a lower inscription number tends to carry more rarity and potential value.
Viewing Inscriptions
You can view the content of any Inscription on the official Ordinals website. For example, Inscription #0 is inscribed on the 1,252,201,400,444,387th satoshi. The site provides details like the timestamp of the inscription, offering a transparent look into each digital artifact.
Key Differences Between Ordinals and Traditional NFTs
The underlying technology of Ordinals creates several significant advantages over conventional, smart contract-based NFTs.
1. Data Immutability on the Blockchain
Every Inscription exists directly on the Bitcoin blockchain. Because blockchain data is extremely difficult to alter, the inscribed content is permanently secure and cannot be replaced or tampered with. In contrast, the media for many traditional NFTs is often stored on external servers, which can be compromised, go offline, or be altered by the creator.
2. Secure Transaction Signing
Transactions with Ordinals are inherently safer. The Bitcoin network only handles transactions, meaning there is no risk of signing a malicious smart contract that could drain your wallet. With Ethereum NFTs, users can accidentally sign dangerous permissions like "Set approval for all" or "eth_sign," potentially leading to a loss of all assets.
3. Inherent Scarcity
Ordinals are naturally scarcer than most NFTs. Creating an Ordinal requires a satoshi (and thus, BTC). Since there is a finite number of satoshis, there is a hard cap on how many Ordinals can ever exist. Traditional NFTs, however, can be minted in unlimited quantities, sometimes devaluing entire collections through oversupply.
Notable Ordinals Projects
The Ordinals ecosystem is growing rapidly. Here are three pioneering projects:
- Ordinal Punks: A homage to Ethereum's iconic CryptoPunks, this collection consists of 100 images inscribed within the first 650 inscriptions. One, Inscription #620, famously sold for 9.5 BTC.
- Bitcoin Rocks: Inspired by Ethereum's Ether Rocks, this was one of the first collections on Bitcoin, with all items inscribed within the first 250 inscriptions. Lower numbers are highly coveted.
- Taproot Wizards: This project is based on the "Bitcoin Wizard" illustration, a mascot in the Bitcoin community. It consists of 2,121 inscriptions and is deeply rooted in Bitcoin culture.
Where to Buy Ordinals
You can purchase Ordinals on several dedicated marketplaces. Some even allow you to connect a MetaMask wallet, making it accessible even if you are new to Bitcoin.
- Ordinal Wallet: A simple platform that allows you to create a wallet and trade Ordinals. The setup involves setting a password and securing your seed phrase.
- Ordswap: A versatile platform for buying, selling, and creating Ordinals. It can generate a Bitcoin wallet address by connecting your MetaMask, simplifying the process for Ethereum users.
- ordinals.market: This marketplace uses "Emblem Vaults," where the private key to a wallet containing an Ordinal is itself an Ethereum NFT. You trade the Vault, and upon purchase, you "burn" it to reveal the key and claim your Ordinal.
👉 Explore available Ordinals marketplaces
How to Create Your Own Ordinal
Creating an Ordinal is now surprisingly straightforward thanks to platforms like Ordswap and Gamma. The process is as simple as uploading a file and paying a fee.
Here’s a general guide using Ordswap:
- Choose Your Data: Click "Inscribe" and upload your file (image, text, video, etc.). The maximum file size is 1024KB.
- Select a Fee: Choose a transaction fee. A lower fee will result in a longer processing time, potentially taking days.
- Send the Payment: Send the required amount of BTC to the provided Bitcoin address. Transactions must be completed within one hour.
- Receive Your Ordinal: Once the payment is confirmed, the inscription process begins. If you provided a receiving wallet address, your new Ordinal will be sent there automatically.
The Future of Ordinals
Ordinals have experienced explosive growth in a very short time. Their future looks promising for several reasons:
- Appeal to Bitcoin Purists: High-net-worth individuals who exclusively hold Bitcoin may be drawn to Ordinals, potentially creating a massive new market built on Bitcoin's superior liquidity.
- Web Integration Potential: Inscriptions use MIME types, the same data model used by the web. This could make it easier to integrate Ordinals directly into web applications and services in the future.
However, some in the Bitcoin community oppose Ordinals, arguing that Bitcoin should be reserved for financial transactions and that NFTs clog the network, driving up transaction fees. The future of Ordinals will depend on how these debates unfold.
Frequently Asked Questions
Q: What exactly is an Ordinal?
A: An Ordinal is a type of NFT on the Bitcoin blockchain. It involves inscribing digital content (like images or text) onto a single satoshi, the smallest unit of Bitcoin, which is then serialized to prove its uniqueness.
Q: Do I need a Bitcoin wallet to buy an Ordinal?
A: Not necessarily. Some marketplaces, like Ordswap, allow you to connect an existing MetaMask wallet to generate a compatible Bitcoin address for purchasing and holding Ordinals.
Q: Are Ordinals safer than regular NFTs?
A: In some ways, yes. Since Ordinals exist on the immutable Bitcoin blockchain and don't involve interacting with smart contracts, the risk of signing a malicious transaction that drains your entire wallet is significantly reduced.
Q: Why are lower-numbered inscriptions more valuable?
A: Lower inscription numbers (e.g., Inscription #100) indicate that the Ordinal was created earlier in the protocol's history. This earlier minting date is seen as a mark of rarity and prestige, similar to low serial numbers on physical collectibles.
Q: Can I create an Ordinal with any type of file?
A: Mostly, yes. You can inscribe images, videos, audio, text, and document files. However, there is a file size limit of 1024KB on most platforms, so larger files may need to be compressed.
Q: What is the main criticism against Ordinals?
A: The primary criticism is that inscribing non-financial data onto the Bitcoin blockchain goes against its original purpose as a peer-to-peer electronic cash system. Critics also argue that it increases network congestion and transaction fees for users.