What are Ordinals? A Deep Dive into Bitcoin NFTs

Photo by torente on Pixabay

‍ Introduction In the world of non-fungible tokens (NFTs), Bitcoin may not be the first blockchain that comes to mind.Ethereum and Solana have dominated the NFT space for years. However, there is an emerging trend that brings NFTsto the Bitcoin network. These unique digital assets, called Ordinals, offer a new way to experience NFTs on the Bitcoinblockchain. In this article, we will explore the concept of Ordinals, their history, how they differ from traditional NFTs,and how to buy, sell, and trade them. So, let's dive in and discover the fascinating world of Ordinals.

What are Ordinals?

Ordinals are Bitcoin NFTs that exist natively on the Bitcoin blockchain. Unlike previous attempts at Bitcoin NFTs, whichrelied on layer-2 blockchains, Ordinals are directly attached to individual satoshis (the smallest denomination ofBitcoin). Each satoshi receives a unique number, known as an ordinal, based on the order of its creation. This logicalordering system, known as ordinal theory, allows for the identification and tracking of these Bitcoin NFTs.

The History of Ordinals

To understand the origins of Ordinals, we need to trace back to the early experiments with NFTs on the Bitcoinnetwork. In 2012, Meni Rosenfeld, the president of the Israeli Bitcoin Association, introduced the concept of coloredcoins. These colored coins aimed to make units of Bitcoin unique by "coloring" them and attaching special properties tothem. While this concept didn't immediately lead to the NFTs we know today, it laid the foundation for the developmentof non-fungible tokens.

In 2014, digital artists Kevin and Jennifer McCoy created what is widely regarded as the world's first NFT, Quantum. They used the Namecoin blockchain, a Bitcoin fork, to prove ownership of their generative art piece. Thisgroundbreaking creation paved the way for further exploration of NFTs on the blockchain.

Spells of Genesis, a blockchain trading card game, was launched in 2015 on Bitcoin by EverdreamSoft. This gameintroduced historical NFTs, with each card representing a special moment in blockchain history. Players could collectand trade these cards, creating a vibrant ecosystem of blockchain-based collectibles.

In 2016, Rare Pepes, a collection of nearly 1,800 digital collectible cards featuring the memeworthy character Pepe theFrog, was released on Counterparty. These cards gained popularity and even fetched high prices in live auctions,demonstrating the value of blockchain-based collectibles.

However, it wasn't until January 20, 2023, that developer Casey Rodarmor launched Ordinals on the Bitcoin mainnet, marking a significant milestone for Bitcoin NFTs. This launch was made possible by the Segregated Witness (SegWit)and Taproot updates to the Bitcoin Protocol in 2017 and 2021, respectively, which enabled the creation of true BitcoinNFTs on the main chain.

How Ordinals Differ from Traditional NFTs

While Ordinals bring NFTs to the Bitcoin blockchain, they differ from traditional NFTs in several ways:
Blockchain
Traditional NFTs exist on various blockchains such as Ethereum, Solana, and Polygon. In contrast, Ordinals areexclusively native to the Bitcoin blockchain.

Nature
Ordinals are based on ordinal theory, a novel numbering system for satoshis on Bitcoin. Traditional NFTs, on the otherhand, are unique digital assets that follow token standards like ERC-721 or Metaplex.

Storage
Most traditional NFTs store their actual content, such as images or GIFs, off-chain and link them within the token'smetadata. In contrast, Ordinals store their data directly on the Bitcoin blockchain by inscribing it onto individualsatoshis.

Fungibility
Traditional NFTs are non-fungible, meaning each one is a unique digital asset that cannot be substituted for another.Ordinals, however, gain "non-fungibility" through the ordinal theory's novel numbering system, even though they areinscribed on fungible satoshis.

Immutability
NFTs recorded on the blockchain are immutable, meaning their data cannot be altered or changed. In contrast,Ordinals, being an ordering system, can be changed and reordered within the sequence.

Royalties
Many traditional NFTs include royalties coded into their smart contracts, allowing original creators to earn a percentage of subsequent sales. Ordinals, as an ordering system, do not have built-in smart contract functionality and therefore do not incorporate royalties.

Smart Contracts

Traditional NFTs rely on smart contracts to enable various functionalities such as royalties and ownership transfers. Ordinals, being based on the ordinal theory, do not have built-in smart contract capabilities.

Buying, Selling, and Trading Ordinals

To engage with Ordinals, you'll need three essential components: an Ordinals marketplace, a crypto wallet, and Bitcoin for transaction fees. Let's explore the process of buying, selling, and trading Ordinals.

Marketplaces

Several marketplaces support Ordinals, making it easy to buy, sell, and trade these unique Bitcoin NFTs. Two notable marketplaces are Magic Eden and UniSat.

Magic Eden is a multichain NFT marketplace that initially launched on Solana but expanded to Ethereum, Polygon, and Bitcoin. With support across these major networks, Magic Eden offers a seamless experience for discovering, minting, and collecting Ordinals.

UniSat, on the other hand, is a blockchain service provider with a focus on Bitcoin. Their marketplace allows users to browse, buy, sell, sort, and filter BRC-20 tokens and Bitcoin web domains. UniSat provides a dedicated platform for those interested in exploring and acquiring Bitcoin-based NFTs.

Buying, Selling, and Trading

To engage with Ordinals, you'll need to connect your crypto wallet, such as Phantom, to one of the Ordinals marketplaces. Once connected, you can browse through the available Ordinals and choose the ones that align with your interests. When making a purchase, ensure you have sufficient Bitcoin in your wallet to cover the transaction fees.

If you own Ordinals and decide to sell or trade them, you can list them on the marketplace, set the desired price, and wait for potential buyers or traders to show interest. Ensure that you follow the marketplace's guidelines and best practices to ensure a smooth transaction.

Exploring Exciting Ordinal Collections

The world of Ordinals offers a wide array of collections to explore. Here are a few notable ones:

Bitcoin Frogs

Bitcoin Frogs is a collection of 10,000 pure digital collectibles that will remain on the Bitcoin blockchain forever. Each frog is unique, and their rarity is determined by both subjective aesthetics and satoshi-based factors.

Bitmap

Bitmap is an open-source standard that allows individuals to claim the digital "real estate" of a Bitcoin block. By inscribing blocknumber.bitmap onto a satoshi using the Ordinals Inscription standard, users can assert ownership of a specific block and build upon it.

Ordinal Maxi Biz (OMB)

Ordinal Maxi Biz (OMB) is a collection of 200 Bitcoin NFTs designed by Tony Tafuro and created by zk_shark and Nullish. Each NFT in this collection features black-and-white sketched heads with Bitcoin-inspired traits, including colored laser eyes, "₿" logos, and maximalist mantras.

Conclusion

Ordinals have brought the world of NFTs to the Bitcoin blockchain, opening up new opportunities for creators, collectors, and enthusiasts. Through the unique ordinal theory, each Bitcoin NFT receives a distinct number, allowing for identification and tracking. As the Ordinals ecosystem continues to grow, marketplaces like Magic Eden and UniSat provide platforms for buying, selling, and trading these Bitcoin NFTs. Whether you're an avid collector or a curious newcomer, exploring the world of Ordinals offers a fascinating glimpse into the intersection of Bitcoin and NFTs. So, start your journey today and discover the endless possibilities of Bitcoin NFTs with Ordinals.