What is an Ordinal?
Ordinals are a type of digital asset inscribed on a satoshi, which is the smallest denomination of Bitcoin. Ordinals are similar to non-fungible tokens (NFTs) and are made possible by the Taproot upgrade launched on the Bitcoin network in November 2021. Inscribing data onto a satoshi is done through a process called Inscription, which writes the data into the witness of a Bitcoin transaction.
The development of Ordinals was made possible by previous Bitcoin upgrades, such as SegWit, which allowed for more transactions per block and laid the groundwork for innovations like the Lightning Network. While the creation of Ordinals can be a complex process due to the size of the Bitcoin blockchain and the need to use the Command Line or Terminal, developers argue that it is not an abuse of the network.
How to Create an Ordinal on Bitcoin
The process of creating Ordinals involves users downloading Bitcoin Core and syncing the node to the blockchain, followed by creating an Ordinals Wallet and sending some satoshis (the smallest unit of a bitcoin) to the wallet. For more detailed information, you can read the Inscriptions handbook from the team that created the first Ordinal.
Alternatively, users can mint an ordinal through a trusted third-party Bitcoin NFT Marketplace like Gamma. They allow users to connect a Stacks Wallet, or alternative BTC Wallet to mint an Ordinal in a similar way to how you would mint an Ethereum-based NFT on a popular marketplace like OpenSea or Magic Eden.
Growth of Ordinals
Since its launch in January, Ordinals and inscriptions have grown rapidly, surpassing 130,000 inscriptions, according to data from Dune Research via Dataalaways. Ordinals leverage the Taproot soft fork, which has seen a surge in adoption and utilization, with Taproot adoption and utilization reaching new all-time highs of 12.68% and 5.59%, respectively, over a 7-day moving average.
This increased adoption of Taproot has also resulted in a rise in the mean block size, which has increased from 1.5 to 2MB to 3 and 3.5MB over the past week. This has also resulted in a substantial increase in fees for the Bitcoin network with over $1 million in cumulative fees paid to the network from inscriptions.
What is Next for Ordinals?
The next step for Ordinals is to develop more seamless methods of inscribing on Bitcoin and wallets that make it possible to view the Bitcoin NFT once it is created. Several projects are already working on this, such as Gamma, a Bitcoin NFT marketplace on Stacks, which offers a paid service that allows users to inscribe images and text, and Oridalsbot from the creators of the Satoshibles NFT collection.
Additionally, Hiro Systems announced that it is rolling out support for Ordinals on its Hiro Wallet, which will allow users to create and manage Bitcoin NFTs seamlessly. Furthermore, Xverse, a Bitcoin-based web wallet, has launched support for Bitcoin NFTs. These developments show that there is increasing interest in Ordinals and NFTs on the Bitcoin blockchain, and more innovations are likely to come in the future.
Bitcoin Ordinals offer a unique way to create and verify digital assets on the Bitcoin blockchain, similar to non-fungible tokens (NFTs). The Inscription process writes or inscribes data onto a satoshi, the smallest denomination of Bitcoin, and is made possible by the Taproot upgrade. Despite its complexity, developers argue that it is not an abuse of the network.
The growth of Ordinals has been remarkable, and the next steps for development include creating more seamless methods of inscribing and viewing Bitcoin NFTs. As adoption increases and more innovations come, it is exciting to see where Ordinals will go in the future.