In recent years, the world of cryptocurrency has exploded with innovative and novel ideas that have revolutionised how we think about digital assets. One of the most exciting developments in this space has been the rise of non-fungible tokens (NFTs). These unique digital assets allow for the creation and ownership of one-of-a-kind virtual assets, ranging from digital art to music and even tweets. Now, a new breed of NFT has emerged in the form of “Ordinals,” NFTs minted on the Bitcoin blockchain.
What Are Ordinals?
The “inscription” on a Satoshi has been made possible by the Taproot upgrade, launched on the network on November 14, 2021, with the aim of increasing on-chain privacy, improving ecosystem scalability and security, and above all allowing for the creation of new scripts that were previously too complex or costly.
Since then, some new developers have started working to bring non-fungible tokens or NFTs onto the blockchain. This has been a delicate issue, with several members of the community strongly opposed to opening up Bitcoin to this technology. The content, whether a JPEG file or a video game, is stored directly in the space of a Bitcoin block using an encoding that makes it possible to access the Inscriptions directly from a browser.
The data is contained in the section of the block called the “witness”, which, thanks to Segwit (which in turn optimised the space in the blocks), guarantees that the Inscriptions can occupy space up to the 4MB limit imposed by the protocol.
To comprehend the origin of this tool, one must begin by assuming that each mined satoshi (0.00000001 BTC) can be linked with a specific numerical value. In essence, there exists a numerical value for each of the (almost) infinite Satoshi that has been mined thus far (approximately 19 million *10^7).
Each of these numerical values can subsequently be associated with an Ordinal, the rarity of which is directly derived from the protocol. From the outset, it is feasible to trace the total supply (in the sense that bitcoins were mined as a whole) of Ordinals, which are categorised into 2.1 quadrillions “common,” 6,929,999 “uncommon,” 3437 “rare,” 32 “epic,” 5 “legendary,” and 1 “mythic” (which, however, by default is owned by Satoshi Nakamoto as it is situated in the first block of the chain).
What Makes Ordinals Unique?
Several features set Ordinals apart from other NFTs. Firstly, the fact that they are minted on the Bitcoin blockchain is significant. Bitcoin is the original cryptocurrency and remains the most valuable and widely used blockchain globally. By creating Ordinals, creators are tapping into a vast and established ecosystem that provides a level of security and stability that is unmatched by other blockchains.
What Can You Do with An Ordinal?
Like other NFTs, an Ordinal is essentially a digital asset that can be bought, sold, and traded on various NFT marketplaces. However, unlike some other NFTs, Ordinals are not tied to any project or platform. They are standalone assets that can be owned and traded independently of any other project.
As the NFT market continues to evolve and mature, we will likely see more innovative projects like Ordinals emerge. These new types of digital assets are opening up exciting new possibilities for artists, creators, and investors, and are changing the way we think about ownership and value in the digital world.