Bitcoin Ordinals NFTs: Everything You Need to Know
Bitcoin Ordinals have taken over Web3 — at least, that’s how it seems. In April 2023 alone, the daily record for inscriptions using Ordinals was broken four times as users flooded the network with images, video games, and other content. There are currently more than 10 million Ordinals NFTs minted at the time of writing.
Even though that number seems large, the vast majority of people simply don’t yet know how to buy them, let alone create them. With higher barriers to entry, that means potential opportunities abound. But it also means higher risks. If you’re ready to take that chance and embrace the potential of Ordinals, we’re here to offer you a full guide about it.
Here you’ll figure out these frequent asked questions: How do Ordinals work? How are Ordinal NFTs different from other NFTs? And of course: How do I get Bitcoin Ordinals? Or how to buy Bitcoin Ordinals.
First, it’s essential to understand a few critical points about Ordinals that the average NFT enthusiast might not know.
What are Ordinals?
Ordinals, created by Bitcoin developer Casey Rodarmor, is a term widely used to describe a new type of non-fungible token (NFT) native to Bitcoin.
This new way of deploying NFTs on Bitcoin directly has been making headlines since launching in January 2023. A Galaxy Research report is now predicting that these Bitcoin-native NFTs will acquire a market size worth $4.5 billion by 2025.
Ordinal inscriptions enable the creation of “digital artifacts,” which is what this new type of NFT is actually called. But they aren’t your ordinary NFTs. Digital artifacts actually “live” on-chain and are arguably more complex than “traditional” NFTs. Moreover, they show that Bitcoin can be more than digital gold and censorship-resistant digital money.
Unlike their predecessors, ordinal NFTs don’t exist on a separate layer from Bitcoin. Rather, they use an arbitrary but logical ordering system called ordinal theory to give each individual Bitcoin satoshi a unique number. In this regard, ordinal NFTs are completely Bitcoin-native. They work without changes to the Bitcoin protocol, don’t require any extra layers, and are backward compatible with the network.
While not everyone in the Bitcoin community is happy that these NFTs are taking up block space, which will arguably be needed for Bitcoin to attain global adoption as a form of money, a lot of people are excited that Bitcoin has become more fun and dynamic since the launch of Ordinals NFTs.
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How do Bitcoin Ordinals Work?
Ordinal NFTs use inscriptions to work. Inscriptions are powered by Ordinal theory through the Ordinal protocol, which was developed by Casey Rodarmor. Ordinal theory aims to give satoshis (the smallest unit of bitcoin at 1/100,000,000 of a full bitcoin) “individual identities allowing them to be tracked, transferred and imbued with meaning.”
Basically, the Ordinal protocol assigns each satoshi a sequential number. After that number is assigned, each satoshi can then be inscribed with data such as pictures, text or videos through a Bitcoin transaction. Once that transaction is mined, the arbitrary data is permanently part of the Bitcoin blockchain and viewable through Ordinal-enabled Bitcoin wallets and online Ordinal viewers.
What is the Difference Between NFT And Ordinals?
In rough terms, Ordinals are NFTs you can mint directly onto the Bitcoin blockchain.
But that’s not exactly right. That’s the short-hand understanding, but there are a few important differences between NFTs and Ordinals.
The one main difference between Ordinal NFTs and other NFTs has to do with data storage.
Most NFTs are created using the Ethereum blockchain through the ERC-721 Non-Fungible Token Standard. ERC 721 is a standard which outlines how an NFT should be created so that it will be properly recognized across the Ethereum ecosystem. When an ERC-721 NFT is created, a file of metadata – literally data which provides information about other data (hence, “meta”) – provides information about the NFT.
The easiest way to think of it is that the NFT itself is a contract that proves ownership of another item, which is detailed in that metadata. In the case of the most common NFTs, which are digital art, the actual JPG or file of the art is usually stored off the Ethereum blockchain and the metadata includes a link to that file. This means that the actual file or artwork can be altered since it is not embedded in the blockchain.
Bitcoin’s Ordinal NFTs are different in that there isn’t a file of referenceable metadata that describes the NFT; instead, the entire data file resides in the witness signature field of Bitcoin transactions. That means the entirety of Ordinal NFTs live and breathe on the blockchain.
For example, if a Bitcoin user does not recognize or care about an ordinal or the data attached to it, it can simply be used like any other Bitcoin. Ordinals are fungible in this way—they can be used to pay for network fees or sent as payment, though the arbitrary data will still stay attached. The same is not true of an Ethereum NFT. An Ethereum NFT is completely different from an Ethereum coin, and it’s impossible to mix up a fungible token with an NFT because the Ethereum Network treats each token type differently.
Whether that matters or not is really up to the user, but Ordinal NFTs bring an additional level of immutability to NFTs.
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How to Buy Bitcoin Ordinals?
Ordinals Wallet is a digital wallet platform that allows users to securely store, buy, sell, and trade Bitcoin Ordinals. The platform is easy to use, and the process of buying Bitcoin Ordinals is straightforward. To begin, users will need to create an account and then deposit funds into their wallet. Once the funds have been deposited, users can select the “Buy Ordinals” tab and select the amount of Ordinals they wish to purchase. Once the transaction is complete, the Ordinals will be added to the user’s wallet.
Buying Bitcoin Ordinals is a great way to diversify your cryptocurrency portfolio. Other platforms for purchasing Bitcoin Ordinals include Xverse and Hiro Wallet.
How to Create Bitcoin Ordinals?
Ordinal NFTs are really new, so their accessibility is limited as the ecosystem builds out. There are two main ways to create your own Bitcoin Ordinals NFT right now.
The first way is by starting up a full Bitcoin node and running Ord on the node. Then you can start inscribing satoshis into a wallet you control to make Ordinal NFTs. This method is technically involved and is more suitable for tech savvy hobbyists and those who really love NFTs.
The other way to inscribe an Ordinal NFT is to use a no-code inscription tool. It’s a far more casual experience and works fine if you don’t mind inserting a little trust into your minting process. You can use one of these no-code tools called Gamma. It is relatively straightforward for those familiar with Bitcoin, but it can be a bit tricky at parts.
This is what you need to do:
Before you start, make sure you have some bitcoin (~$50 worth) so that you can pay the transaction fee for your inscription. The wallet you have it in must be able to send bitcoin to Taproot addresses. Here’s a good list of wallets and service providers who support Taproot. What you need to look for is in the “Send to Bech32m” column – which is different than the “Send to Bech32” column, so make sure you are scanning the correct one. A “Yes” in that Bech32m column indicates if the wallet can send bitcoin to Taproot addresses. Note that popular exchanges like Coinbase and Binance do not support Taproot.
Once you have your transaction fee bitcoin secured in your wallet, you can start minting your Ordinal NFT. Here’s the step-by-step guide to mint your first Ordinal using Gamma. You could also use something like OrdinalsBot and the process would be more or less the same.
- Go to: https://gamma.io/ordinals
- Choose your inscription type, either an image file or just plain text.
Upload the desired file by selecting the file from your desktop or typing in the text directly where indicated.
Select a transaction fee rate based on how long you are willing to wait for your NFT to mint. Take note of the estimated mint times provided for the various fee rate choices.
Here’s one of the tricky parts of the process. The next step is to designate the bitcoin address where the Ordinal NFT should be sent. The address needs to be either a Taproot address or an Ordinal-compatible address.
We would recommend using Sparrow Wallet for this step. Here is a link to a step-by-step guide to setting up Sparrow Wallet for Ordinal NFTs.
Once you have your Sparrow Wallet address set up, drop it into the “Recipient bitcoin address” field on the Gamma website. Make sure the first four characters of this address are “bc1p.” This prefix indicates that the address is a Taproot address.
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Are Ordinals Good for Bitcoin?
Ordinals have created another use case for the Bitcoin network beyond simple transfers of value. However, the Ordinals protocol has been met with controversy as it precipitates a fundamental issue within the Bitcoin community. On the one hand, we have those who believe that the relative simplicity of Bitcoin in its limitations to storing and transferring value should be preserved. On the other hand, some believe that Bitcoin should evolve to include new features and use cases.
Inscribed satoshis are now competing for block space with regular BTC transactions, increasing network fees. This has caused some controversy in the Bitcoin community, but some Ordinals supporters argue that this could be positive as fees are a crucial incentive for miners to secure the blockchain.
In the future, as block rewards dwindle over time, network fees will become the primary incentive for committing hash power to Bitcoin. While the crypto community seems divided on the topic, the Ordinals project has certainly brought innovation to the Bitcoin space.
The growth of the crypto ecosystem has opened the gates to innovative minds for whom the creation of Bitcoin NFTs is part of the future of Web3.
Since its inception, Ordinals have grown steadily as a growing number of users contribute by uploading different types of content, such as images, audio, and videos.
Ordinals are changing the world of blockchain art by providing an entirely new way to store information on Bitcoin. They are adding extra utility and have increased the number of non-zero Bitcoin addresses to an all-time high. We are witnessing a unique moment in Bitcoin history where innovation is generating network activity beyond the typical use cases of investment and monetary transfer. Does this mean that Bitcoin Ordinals will continue to grow? Only time will tell.
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