Summary: Bitcoin Ordinals are a new type of non-fungible token (NFT) technology that allows for the creation of unique and verifiable digital assets on the Bitcoin blockchain. The Ordinals inscription process writes or inscribes the data of the content stored into the witness of the Bitcoin transaction, which was introduced in the SegWit upgrade to the Bitcoin network in 2017.
Continue reading our guide to learn more about Bitcoin Ordinals and how to set up an Ordinal Wallet to inscribe and buy NFTs on Bitcoin.
What is a Bitcoin Ordinal?
Bitcoin Ordinals are digital assets inscribed on a satoshi, the smallest Bitcoin unit, resembling non-fungible tokens (NFTs). Enabled by the Taproot upgrade in November 2021, Ordinals leverage the Inscription process to store data in the witness of a Bitcoin transaction. Prior Bitcoin upgrades, such as SegWit, facilitated more transactions per block and fostered innovations like the Lightning Network, paving the way for Ordinals.
Despite the complexity of creating Ordinals using the Command Line or Terminal and the large size of the Bitcoin blockchain, developers maintain that this process does not exploit 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.
In conclusion, Bitcoin Ordinals represent an innovative NFT technology that enables the creation of unique, verifiable digital assets on the Bitcoin blockchain. With the Ordinals inscription process and advancements in the Bitcoin network, such as the SegWit and Taproot upgrades, Ordinals are gaining traction in the crypto space. As interest in Bitcoin NFTs grows, developers are working on user-friendly solutions for creating and managing Ordinals.
With projects like Gamma, Oridalsbot, Hiro Wallet, and Xverse, the future of Ordinals and NFTs on the Bitcoin blockchain looks promising.