Bitcoin ordinals, introduced by developer Casey Rodarmor in January 2023, have emerged as a unique system for permanently storing diverse data on Bitcoin's blockchain. Ordinal NFTs have gained traction within the community, with over 200,000 minted since their launch.
This article delves into what bitcoin ordinals are, how they function, and their distinctive features compared to other NFTs.
What are Bitcoin Ordinals and How Do They Work?
Bitcoin ordinals present a system for embedding digital content onto individual satoshis on Bitcoin's blockchain, resembling a next-generation Colored Coins protocol. This system offers a unique approach to creating NFTs on Bitcoin by combining three components – ordinal theory, ord software, and ordinal inscriptions.
Components of Bitcoin Ordinals
- Ordinal Theory: This system uniquely numbers each bitcoin satoshi in circulation, encompassing approximately 100 million satoshi units per bitcoin and hundreds of trillions of satoshis in circulation.
- Ord Software: Users initiate the process by downloading and running a Bitcoin full node, requiring synchronization with the blockchain. To impart non-fungible qualities to Bitcoin satoshis, Ord software is necessary.
- Ordinal Inscriptions: These on-chain inscriptions are stored within the script of a taproot transaction, setting them apart from traditional NFT collections that usually store records on-chain while hosting media files elsewhere on the internet.
Ordinals and inscriptions form the core components of ordinal NFTs. Ordinals establish a unique ordering system for sats, introducing the "non-fungible" property, while inscriptions embody the content of the NFT itself – be it an image, text, video, or other arbitrary data. Drawing parallels with non-Bitcoin NFTs, ordinal theory acts as the TokenID for Bitcoin, offering a distinctive barcode for each satoshi.
Bitcoin Ordinals vs. Standard NFTs
The distinctive characteristic of bitcoin ordinals lies in their fluid nature. While ordinals can be fungible or non-fungible based on user preferences, standard Ethereum, Solana, or Polygon NFTs maintain a rigid distinction. Bitcoin ordinals allow users to use them like any other bitcoin, even for network fees or payments, without compromising the attached arbitrary data.
Conclusion
Bitcoin ordinals have introduced a unique approach to NFTs on the Bitcoin blockchain, offering a system that distinguishes itself from other prevalent NFT platforms. As the community continues to explore and develop the potential of ordinal NFTs, how this innovative system will shape the landscape of digital assets within the broader cryptocurrency ecosystem remains to be seen.
