BITCOIN ORDINALS, BITCOIN NFTs, DIGITAL ARTIFACTS: WHAT ARE THEY???
Three days ago, I released an article on ordinal projects I have my eyes on. However, I realized I haven’t actually talked about ordinals themselves, so I felt I should address this. So, here we are!!!
🟧WHAT ARE BITCOIN ORDINALS?
Bitcoin ordinals, introduced by Casey Rodarmor in January 2023, represent a significant innovation in the world of blockchain tech.
Casey Rodarmor, a seasoned software engineer and developer with a background in Bitcoin and blockchain, introduced this concept to enable the inscription of data onto the Bitcoin blockchain. This means that various forms of data, including images, text or even code, can be permanently stored on the Bitcoin blockchain and exchanged among users.
Ordinals stand apart from normal NFTs by offering an unchangeable on-chain presence for digital content. The inaugural Bitcoin ordinal, a pixel art depiction of a skull, was inscribed on December 14, 2022. One distinctive feature of ordinals is their ability to determine rarity based on specific parameters, such as the satoshi’s position within a block, block cycle and halving epoch. This rarity factor can enhance the value of certain Bitcoin Ordinals for collectors.
By introducing Ordinals, Bitcoin has expanded its utility beyond simple value transfer, effectively realizing the concept of Bitcoin NFTs. Once a Bitcoin Ordinal is inscribed, it becomes an indelible part of the Bitcoin blockchain, ensuring a highly secure method for data storage.
🟧UNDERSTANDING THE ORDINAL THEORY AND THE ORDINAL PROTOCOL
The ordinal theory, introduced by Casey Rodarmor in November 2021, forms a crucial conceptual framework. It centers around the notion that each satoshi possesses a distinctive ordinal number based on its mining sequence. From the total supply of Bitcoin, each satoshi has different rarity ranging from Common, Uncommon, Rare, Epic, Legendary and Mythic. This concept enables the identification and tracking of individual satoshis as they circulate within the Bitcoin network…It’s a bit like assigning a unique serial number to every grain of sand on a beach.
🔶️Now, this numbering system takes things a step further.
It lets users bestow a unique identity upon individual satoshis by attaching additional data to them. This process of inscription, sets ordinals apart from normal NFTs. Unlike NFTs, which often rely on smart contracts and may reference assets stored off-chain, Bitcoin Ordinals etch data directly onto satoshis. These inscribed satoshis then find their permanent home within Bitcoin blocks. The beauty of this approach lies in its simplicity, immutability and security, as it operates seamlessly within the Bitcoin blockchain itself, without necessitating separate tokens or sidechains.
🔶️Now, let’s go into the Ordinal Protocol, Casey Rodarmor’s brainchild, released to the world in January 2023.
🔸️This protocol is a precise embodiment of the ordinal theory we’ve been exploring.
It empowers users to etch data permanently into the heart of the Bitcoin blockchain. Once this data finds its place on the blockchain, it becomes as immutable as the Ten Commandments carved in stone. To distinguish between the two, remember that the ordinal theory represents the broader conceptual framework, while the Ordinal Protocol serves as the specific blueprint, outlining the rules and procedures for etching diverse data forms into the Bitcoin blockchain.
In essence, the ordinal theory sets the stage, while the Ordinal Protocol provides the practical means to inscribe a myriad of data forms into the Bitcoin blockchain
🟧HOW ORDINALS WORK
Bitcoin ordinals work based on ordinal theory which assigns unique identities to satoshis. (A satoshi is the smallest part of a bitcoin, and it’s named after Bitcoin’s creator, Satoshi Nakamoto).
🔶️To put it simply, one bitcoin can be divided into 100,000,000 satoshis, which means each satoshi is worth a tiny fraction of a bitcoin, specifically 0.00000001 BTC.
Now, the Ordinals protocol comes into play. It lets you identify and work with each individual satoshi by adding extra information to them. This is done through inscription. So, in essence, every bitcoin is made up of these tiny satoshis and ordinals lets you do more with them by inscribing extra data to them using inscription.
🟧BENEFITS OF BITCOIN ORDINALS
🔸️Decentralization: Bitcoin Ordinals are stored on the decentralized Bitcoin blockchain itself, making them resistant to control or censorship by any single entity.
🔸️Security: Ordinals enjoy the unparalleled security of Bitcoin blockchain, renowned as the most secure network globally. This robust security shields the integrity of the data inscribed on satoshis.
🔸️Transparency: Every ordinal inscribed is visible to the public onchain, ensuring transparency and accountability.
🔸️New use cases: Ordinals has created new applications and use cases for the Bitcoin blockchain.
🟧DRAWBACKS OF BITCOIN ORDINALS
🔸️Scalability: Bitcoin’s blockchain isn’t known for its scalability, inscribing and transferring ordinals can sometimes be slow and costly. This poses challenges, especially during periods of high network activity.
🔸️Complexity: Ordinals are a relatively new, and their intricacies may be challenging for some users to grasp.
🟧CONCLUSION
In summary, Ordinals have introduced a novel way to store information on the Bitcoin blockchain, expanding its utility beyond simple value transfer.
🔶️The concept has generated increased network activity and innovation in the Bitcoin space, and I am very bullish on it’s long-term growth.
Although the introduction of Ordinals has sparked controversy within bitcoin community. While some laser eyed maxis believe bitcoin should maintain its simplicity as a store of value, most of us support its evolution to accommodate new features like Ordinals and BRC-20s.
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