NFTs have mostly been minted and used on Ethereum, Solana, and BNB chain blockchains. Then, the team behind Ordinals arrived and changed the game.
<aside> 🧠KEY TAKEAWAY Bitcoin Ordinals is a protocol that allows individual satoshis (SATs) in a Bitcoin blockchain to be assigned as unique identifiers and transacted with extra data attached.
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Simply, it allows NFTs to be created directly on a Bitcoin blockchain. Bitcoin ordinals are also known as Bitcoin NFTs or Ordinal NFTs.
<aside> 🔒 A satoshi is the smallest unit of a Bitcoin currency, 1 bitcoin has 100 million satoshis.
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At its core, the Ordinals protocol is a system designed to assign serial numbers to satoshis, tracking them throughout transactions. Satoshis are numbered based on the order in which they are mined and transferred.
The first satoshi in the first block has the ordinal number 0, the second has the ordinal number 1, and so forth The ordinal numbers serve as stable identifiers for the attached data to the satoshis.
<aside> 💡 NFTs on other blockchains are usually created using smart contracts, and the assets themselves are hosted in external locations. In contrast, Ordinals are directly inscribed onto the satoshis themselves and included in blocks on the Bitcoin blockchain.
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Making changes to a tiny part of Bitcoin's code is seriously tough, mainly because of the decentralized network of nodes and developers who don't want to risk compromising network security. However, thanks to the booming crypto ecosystem, a new wave of creative thinkers has emerged, bringing about updates that previously struggled to see the light of day.
Casey Rodarmor is the mastermind behind the protocol, which made its debut in January 2023. Prior to its creation, bitcoins were fungible, meaning one satoshi could not be distinguished from another. However, with the recent updates to the original protocol (Taproot and Segregated Witness), it has become possible to embed image and video data in the witness script, alongside digital signatures and other essential information. These modifications have turned Bitcoin NFTs into a tangible reality.
<aside> 🔒 The inscription refers to the process through which each individual satoshi can be uniquely identified and transacted with additional attached data.
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It’s the same process as minting on other blockchains.
<aside> 🔥 There are more than 59 million Bitcoin Ordinals inscribed as of February 2024.
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The very first Ordinal inscription aka the Genesis block is a tiny pixel art of a skull, timestamped on 14th December 2022. You can see it here.
There’s no big picture, yet. Ordinals are very early on the market and their rise lead to network bursts in terms of usage, fees and storage space.