What are Bitcoin Ordinals: The world’s most well-known digital assets at the moment are NFTs, or non-fungible tokens. Nevertheless, the majority of them have been developed and implemented on blockchain platforms as Solana, Ethereum, and BNB Smart Chain. Curiously, the Bitcoin Ordinals whitepaper laid forth the groundwork for implementing NFTs on the Bitcoin network, the oldest blockchain in the world. It is not possible to modify the code of Bitcoin applications due to Bitcoin’s technical nature.
The Bitcoin network’s security is ensured by a decentralized network of developers and nodes. So, no concrete project ever came out of the idea of Bitcoin NFTs. In fact, more and more options to create Bitcoin NFTs have arisen as a result of the growth of the crypto ecosystem. Learn more about Bitcoin Ordinals and their inner workings in the following discussion.
Understanding Bitcoin Ordinals
One of the most talked-about innovations in the web3 sphere recently is Bitcoin Ordinals. After Casey Rodarmor unveiled the project in January 2023, it sparked heated debate among cryptocurrency enthusiasts. Give me the rundown on the ordinals protocol and its salient features. Bitcoin Ordinals are the original, mint-state, one-of-a-kind bits of data that make up Bitcoin, often known as satoshis or sats.
Consequently, satoshis can acquire an identity similar to that of a fundamental non-fungible token and become truly unique. What are the options for adding digital assets such as text, photos, or videos using the most basic Bitcoin denomination? The solution reveals how the mechanism that allows inscription on Bitcoin functions.
The need for materials to understand Bitcoin’s technology and its uses has been increasing at an exponential rate. In the realms of crypto and web3, Bitcoin Ordinals have emerged as the newest sensation. With increasing network activity, the record for daily inscriptions using Ordinals was broken four times in April 2023. Users uploaded an overwhelming amount of media, including photos and video games, to the network.
What is an Inscription?
Bitcoin Ordinals, when defined, shed light on a frequently-mentioned feature of the protocol. Ordinals are useful for encoding digital assets onto Bitcoin’s lowest denomination, Satoshi. You can also include smart contracts, which can help represent NFTs, in the data that you can inscribe on Bitcoin.
The generation of Bitcoin NFTs is thus made possible by inscription. The question “How are Ordinals different from NFTs?” has legitimate responses that can be found in the inscription. In November 2021, the Bitcoin network implemented the Taproot upgrade, which greatly improved the satoshi inscribing process.
The Bitcoin team has put in a lot of time and effort to integrate NFTs into the Bitcoin network. At both Counterparty in 2014 and Stacks in 2017, an early attempt was made to integrate Bitcoin with non-fungible tokens. Data saved in the witness of Bitcoin transactions can mainly be engraved during the inscription procedure. The witness functionality was introduced with the SegWit upgrade that the Bitcoin network introduced in 2017.
The rationale behind Creating Bitcoin Ordinals
Bitcoin Ordinals must also be the primary emphasis of the introductory guide. Note that Bitcoin Ordinals are based on long-standing debates within the Bitcoin community. Do you think learning Bitcoin is merely for financial transactions? As an alternative, you can use Bitcoin’s decentralized and secure network to store your data.
Picture this: Bitcoin is the de facto reserve currency of the globe. Without room for experimental use cases like data incribing in the block space, it would simply build a global financial network. Resolving Bitcoin’s security budget problem can be achieved by increasing the utilization of block capacity for storage.
In its early stages, Bitcoin’s OP_RETURN function was the only way to encode messages onto blocks, limiting the available capacity to about 80 bytes. You want to know about Ordinals NFTs, but that characteristic wasn’t enough to make them. The size limit was raised to 4 MB with the introduction of two significant hard fork upgrades, Taproot and SegWit, which brought about significant benefits. The improvements allowed for more efficient organization of transaction data by providing a one-of-a-kind method for measuring block sizes.
Working of Ordinals
There are four different factors linked to a satoshi’s location on the Bitcoin blockchain, according to developer Casey Rodarmor. A Satoshi index, a cycle number, the block index during the challenging adjustment phase, and the block index during the halving epoch make up the four parameters. By finding the equilibrium between these factors, you can have a better understanding of how Bitcoin Ordinals work.
A satoshi’s position on the Bitcoin blockchain may be determined using these four factors; obviously, the first satoshi is more rare. Rare mints may be able to command a premium price from NFT collectors. Consequently, one way to confirm the rarity of a Bitcoin NFT is to use the ordinal ranking of sats.
One further way Bitcoin Ordinals function is by reusing the code, this time as envelopes for the data written on satoshis. The Ordinals protocol can assist in staking larger data on satoshis when Bitcoin’s block size limit is increased. Users can mint CryptoPunk on Bitcoin using a satoshi, for instance.
Imagine two identical banknotes of the same denomination, but with the signatures of Michael Jordan and LeBron James on one. That’s the idea behind ordinals. Keep in mind that you can purchase a same item with both bills. Conversely, a bill featuring the signatures of well-known celebrities would have a different social status.
Unique Traits of Bitcoin Ordinals
One of the fundamental guidelines in an introduction to Ordinals is to avoid confusing Bitcoin Ordinals with non-fungible tokens. You need to be aware that there are a number of ways in which Ordinals differ from NFTs. ‘Ordinals NFT’ has been trending recently because of the possibility of imprinting Bitcoin network satoshi with one-of-a-kind data and smart contracts. Bitcoin Ordinals are distinct from NFTs in a number of ways, some of which are highlighted here.
On-chain Minting
The fact that the Bitcoin blockchain stores real raw file data is the primary argument in favor of Ordinals being considered apart from NFTs. Ethereum and other non-fungible token networks store the files as reference points, which can be hosted anywhere. For instance, NFTs have the ability to link to physical artworks that are being auctioned in a gallery.
Inscription vs. Tokenization
Bitcoin Ordinals differ most significantly from NFTs in that they have an inscription. Since Bitcoin Ordinals include distinct data like audio, video, and text files, some would think they are NFTs. Ordinals, on the other hand, hold the file data with direct inscription on the Bitcoin blockchain, as you can see from the basics of an Ordinals wallet. The process of tokenization involves minting brand-new tokens on separate blockchain networks, which results in non-fungible tokens.
Smart Contract Functionality
Another indicator that Bitcoin does not have smart contract functionality is the discrepancy between Bitcoin Ordinals and NFTs. Consequently, without decentralized exchanges, an effective user interface, and easily accessible wallets, trading Bitcoin Ordinals can be a challenging operation. Consequently, the only way to trade Bitcoin Ordinals is using the OTC trading paradigm.
Users are still flocking to the project, despite the fact that the Ordinals NFTs are divided according to the smart contract functionality. An illustration of why it is imperative that you acquire knowledge about Ordinals may be seen in the rapid influx of capital into their environment.
Concurrency Issues
Potential concurrent problems are another major focus of an introductory Bitcoin Ordinals described for beginners. The possibility of adding additional inscriptions to Satoshi units is now open thanks to the inscription. However, NFTs, or non-fungible tokens, are associated with a particular digital or physical asset. With Bitcoin Ordinals, the worries about multi-vector NFTs may become a reality.
Examples of Renowned Bitcoin NFT Collections
Understanding the project’s popular collection examples is also necessary for the Bitcoin Ordinals introduction. In this article, we will have a look at the most well-known Bitcoin NFT collections that were introduced by Bitcoin Ordinals.
Ordinal Punks
Ordinal Punks would be the initial instance of Bitcoin Ordinals being applied to NFTs. It is a tribute to the CryptoPunks NFT collection and has 100 Bitcoin Ordinals. Ordinal Punks stands out since its PFP generator is an open-source algorithm. The Ordinal Punks’ bids and asking prices are managed by the project author in a Google Sheet. Project developers can keep tabs on all transactions through Discord by pretending to be escrow managers.
TwelveFold 
Among Bitcoin Ordinals, TwelveFold by the same developers as Bored Ape Yacht Club (BAYC NFTs) is by far the most popular. Limited to 300 pieces, Yuga Labs’ Ordinals series features generative art. Generative art NFTs incorporate both computer-generated imagery and features created by human artists.
You need to be familiar with TwelveFold’s plans to investigate the interplay between blockchain technology, time, and mathematics in order to grasp the concept of an Ordinals Wallet application. Over the course of nearly twenty-four hours, 3,246 bids between $50,000 and $150,000 were received in the first TwelveFold auction.
Ordinal Loops
Bitcoin Ordinals collection continues with an example of an Ordinal Loop. Object 0 is a one-of-a-kind NFT that is featured in this popular offering. Along with its distinctive mathematical torus design, the NFT showcases dynamic generated art that spins. One of the initial series’ additions, Object 0, is the existing narrative named “Do Not Fiat.” It was created by the Ordinal Loops team.
Taproot Wizards
Taproot Wizards are also part of Ordinal’s NFT collection. This Ordinal collection was created on the Bitcoin network by the independent web3 creator Udi Wertheimer. With Inscription 652, the developers kicked off the Taproot Wizards collection, which features one unique NFT designed by Udi for each wizard. Using Bitcoin’s immutability, the Taproot Wizards collection may safely store one-of-a-kind digital artifacts.
Conclusion
How non-fungible tokens can be added to the Bitcoin blockchain was outlined in the introduction sketch to Bitcoin Ordinals. Ethereum and similar blockchains have long been considered the best options for developing and deploying NFTs. But with all the new developments in crypto and web3, there has been a huge uptick in people looking for ways to integrate NFTs into the Bitcoin network. The smallest unit of Bitcoin, the satoshi, can have its own unique data added to it using Bitcoin Ordinals’ special process, the inscription.
