A proposal to integrate NFTs (non-fungible tokens) into the Bitcoin (BTC) network was posted to the Bitcoin dev email list in February 2022. According to the proposal, each Satoshi (a Bitcoin unit) would be given an ordinal number. The ordinal number would then be connected to other information like text, photographs, videos, or games. As a result, digital artifacts, or NFTs, might be produced and kept on the BTC blockchain.
A digital asset stored on the BTC network is called an inscription. It differs from conventional tokens as it is kept in the limited-capacity OP_RETURN field of a BTC transaction. This field can store small amounts of data. The use of inscriptions enables the development of one-of-a-kind, non-fungible digital objects.
Ordinals debuted in January 2023 and left the Bitcoin community split. Developers, fans, and supporters debated the advantages of placing JPEG on the blockchain. Some believe that Ordinals unlock a world of dangers for the Bitcoin network, including malware assaults and soaring transaction costs. Furthermore, according to Rene Pickhardt, the Ordinals community has been “spamming” the blockchain with huge JPEG images.
Meanwhile, others have offered support for NFTs on the BTC blockchain. According to Dan Held, the initiative is “good” for BTC. Moreover, Held shared a snapshot of an email written by the late Hal Finney in which he discussed “crypto trading cards.” Finney is one of the suspects behind the pseudonymous creator of Bitcoin, Satoshi Nakamoto.
Nonetheless, the Ordinal project is growing every day. According to Dune, BTC inscriptions using Ordinals have crossed 12,000 mints daily. Meanwhile, total mints are above 33,000.
What makes Ordinals NFTs on Bitcoin different?
Although Ordinals are not the first NFT project on Bitcoin, they differ from the previous ones as assets are directly inscribed on Satoshis on the BTC blockchain. Furthermore, there is no need for a sidechain or supplementary token.
While some in the Bitcoin ecosystem refer to the digital asset simply as “inscriptions,” Ordinals refers to its NFTs as “digital artifacts,” unlike Ethereum and Solana.
According to Alex Adelman, co-founder, and CEO of Lolli, Bitcoin NFTs will draw fresh attention and funding. Additionally, he continued, it will provide developers with fresh opportunities to come up with creative ideas that will aid in scaling and efficiency.