NFTs are non-fungible tokens first launched on the Ethereum blockchain. They allow individuals to own tokens with unique identifiers. For years, the cryptoverse have thought that Bitcoin was too primitive a blockchain to allow for such a use case.
In Jan 2023, Bitcoin NFTs, also known as Bitcoin Ordinals or Ordinal NFTs were launched, proving the world wrong. Ordinals took the world by storm and by 13 Feb 2023, over 100,000 inscriptions were created!
What are Ordinal NFTs?
Oridinal NFTs are a form of non-fungible tokens, on the Bitcoin blockchain.
The SegWit Bitcoin network upgrade in 2017 allowed users to leave small messages (aka witness) in each transaction.
The Ordinal protocol developed by Casey Rodarmor made use of this function. It allows users to leave NFT data in the form of Inscriptions on satoshis*. Each Inscription number become a unique, trackable identifier for every Ordinal NFT. The data inscribed onto satoshis can represent text, artwork, animations, music and many other forms.
*Satoshis (sats) are the smallest denomination of Bitcoin. 1 Bitcoin has 100,000,000 sats.
Oridinal NFT vs NFTs
While the concepts are similar, there are some key differences between Ordinals and NFTs on the Ethereum blockchain.
1. Ethereum NFTs are identifiable tokens that represent off-chain data while Ordinals inscribes complete data onto sats.
Most NFTs on Ethereum are contracts that prove ownership of another item. Most often the contract would point to off-chain metadata stored in IPFS, a decentralized file storage system. While this reduces the amount of data that needs to be recorded on-chain, it allows creators to change the metadata of the NFT.
There are pros and cons to this capability but we’ll not dive into that rabbit hole in this article.
On the other hand, Ordinals inscribe complete data onto satoshis and these inscriptions cannot be changed.
2. NFTs may include copyrights and royalties, ordinals do not.
Unlike NFTs, ordinals do not include creator royalties. This feature make them more akin to traditional art than NFTs.
Likewise, there are pros and cons to this feature. However, some would argue that this feature could make ordinals the new standard for digital art ownership.
Ordinal NFTs are also referred to as ‘digital artifacts‘ rather than NFTs.
How Do You Mint Bitcoin NFTs?
Before you start inscribing, you’ll need:
- some bitcoin to pay for the transaction fee
- a wallet that supports Taproot
- the image, text, or video you wish to inscription
There are two ways to mint NFTs;
1) Use the ‘ord’ terminal
This method requires some technical know-how. You’ll need to start up a full Bitcoin node, run Ord on the node and then start inscribing the sats into your wallet.
2) Use a no-code inscription solution
If like me, the first method scares you. Be thankful that there’re developers who are already working on no-code solutions to minting Bitcoin NFTs.
Gamma is one of them:
Given the speed of crypto builders, we should see this space proliferate in the coming weeks.
How to find all the Ordinal NFTs?
The Ordinal Inscriptions Explorer lets you take a look at the Ordinal NFTs being minted. You can also search for specific inscriptions based on their number or identifier.
Who are minting Ordinal NFTs?
With a new technology to play with, you shouldn’t be surprised that many have started inscribing Ordinals.
According to Dune Analytics, 204,330 inscriptions have been made at the point of writing. A total $1.334M worth of fees had been spent inscribing ordinals!
Many of the key blue chip NFTs are also finding their way onto Bitcoin.
Disclaimer: You should note that these ‘copycat’ Ordinal NFTs may not represent the same NFT projects on Ethereum or other chains. They are merely replicates and their future value should not be tied with the original projects.
Some examples include:
- Ordinal Punk NFTs: 100 Ordinal NFTs in the style of the infamous CryptoPunks. https://www.coindesk.com/web3/2023/02/09/bitcoin-punks-ordinal-nft-collection-soars-in-value/
- Bitcoin Rocks: a replica of Ether Rocks
One interesting exception would be OnChain Monkey, a collection of 10,000 Ethereum NFT PFPs. They had inscribe their existing artwork, allowing existing NFT holders to own the same NFT on Bitcoin.
Arguments against Ordinal NFTs
While these Bitcoin NFTs have gained strong traction, not everyone is onboard with the idea.
Increasing cost of Bitcoin transactions
The most common argument against Ordinals is that they could end up clogging the network, making transactions more costly.
To this, developer Rodarmor mentions that “while inscriptions contribute to making blocks full, inscriptions do not change the size of the Bitcoin block” and that inscriptions have a low impact on the actual function and use of blockspace as Bitcoin nodes will download the full block regardless.
Bitcoin should be kept for financial purposes
say the Bitcoin maximalists.
An longstanding debate among Bitcoin users has been on whether Bitcoin should be used for non-financial purposes. Keeping in mind that Satoshi, the pseudonymous investor of Bitcoin strongly advocated the use of Bitcoin solely as a financial tool, there are Bitcoin maximalists who are against the idea of Oridinal NFTs.
Conclusion
Ordinal NFTs are an exciting new way to own digital art on the Bitcoin blockchain. The ability to own digital artifacts on Bitcoin could end up driving more interest in Bitcoin over the long run.
Will it end up being the new standard for digital art ownership or will it be pushed to the sidelines? Only time will tell.
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