A Comparison Between Ordinals NFT and Traditional NFT
The Bitcoin ecosystem has once again gained market attention, with the NFTs based on the Ordinals protocol and BRC20 standard generating significant market demand. Beyond the volatile market capitalization, we believe that both the Ordinals protocol and the BRC20 standard behind Ordinals NFTs are noteworthy technological advancements.
In January of this year, Casey Rodarmor introduced the Bitcoin Ordinals protocol, leveraging a vulnerability in Taproot. By allowing users to record different types of metadata (such as images, videos, PDF) on satoshis, they can directly create and store Bitcoin-based NFT on the Bitcoin network. Ordinals represents a novel way of storing Bitcoin transaction information and thus made its first breakthrough in the NFT space. Ordinals NFT achieve the permanent storage of digital content on-chain through its protocol features.
This is a significant breakthrough for Bitcoin, as Bitcoin users can now store digital assets on the Bitcoin blockchain, a capability previously exclusive to other blockchains such as Ethereum, Polygon, Flow, and others. Bitcoin NFT bring digital assets to the Bitcoin network, enabling their creation, storage, and exchange in the Bitcoin ecosystem. However, there are several notable differences between Ordinals NFT and existing NFTs in terms of technology and market dynamics. This article draws on the analysis of Bardia Eshghi, an industry analyst at AIMultiple, to summarize the significant distinctions between Ordinals NFT and traditional NFT.
Unlike Traditional NFT, Ordinals NFT is Always Stored on the Bitcoin blockchain
Compared to traditional NFT, one major advantage of Ordinals NFT is decentralized and higher security standards. Thanks to the cryptographic properties of Bitcoin.
Ordinals allows metadata to be recorded on satoshis, ensuring that Ordinals NFT is consistently stored on the Bitcoin blockchain. This core feature makes them more decentralized and secure. In contrast, most NFT types currently found in the NFT market are stored on decentralized applications using self-executing smart contracts like EVM. This reliance on contract-encoded rules and logic makes traditional NFTs dependent on the contract layer.
Ordinals NFT will Offer Increased Liquidity
Among users who have faith in Bitcoin and Ethereum, a significant portion consists of early adopters and Web3 enthusiasts. It can be said that the Bitcoin network is one of the earliest and most influential blockchain networks. Bitcoin’s volatility continues to impact market dynamics. With digital assets stored on Bitcoin, it means that users can link their artwork to the most liquid crypto assets in the market. Other NFT-compatible crypto assets, constrained by the security features, robustness, and market value of their respective platforms, face concerns that limit their ability to enjoy the same level of liquidity.
The Immutability and Security of Ordinals NFT
Ordinals NFT inherit the simplicity, immutability, security, and persistence of Bitcoin. The inherent properties of the Bitcoin protocol, such as cryptographic hashing and consensus mechanisms, make transactions immutable. Each block in the Bitcoin blockchain contains the hash of the previous block, creating a chain of tamper-resistant blocks. Therefore, once a transaction is confirmed by a majority of nodes on the Bitcoin network, it becomes a permanent record in the distributed public ledger. Bitcoin users benefit from the minimal opportunity for fraudulent transactions or alterations to existing transactions.
Ordinals NFT is Even More Rare
The maximum supply of Bitcoin is 21 million, and miners obtain newly minted Bitcoins by performing computationally intensive operations and creating new Bitcoin blocks on the blockchain. The block rewards halve approximately every 4 years. Every 2016 blocks, or roughly 4 weeks, the cost and difficulty of creating new blocks increase. The difficulty level is designed to ensure a stable creation rate of new blocks over time. Therefore, to create an engraving based on Ordinals, a user needs to perform a Bitcoin transaction and hold the content on the Bitcoin blockchain.
In contrast, other NFT have no quantity limit and can even be considered infinite in production. NFT on Ethereum are operated using the ERC721 contract. Once a contract is created for a transaction, it “can define an arbitrary number of NFT within that contract.” It means a single transaction can hold an unlimited number of NFTs. This is because the contract doesn’t need to store data but rather points to off-chain data.
Ordinals NFT is expected to excel in preserving their value compared to other NFT, given the supply restrictions imposed by the Bitcoin network.
However, while Ordinals NFT has garnered frenzied market demand and experienced volatile market conditions, For developers, especially those exploring the NFT space, to be aware of the challenges faced by the Bitcoin network. These challenges include low wallet coverage, complex on-chain operations, limited block space for engravings and NFT, among others. Projects rushing into the Ordinals NFT market still face uncertainties and risks. For some novice developers, choosing a more suitable ecosystem may be more important than speculative pursuit of market trends.
Not only Ordinals NFT, But Polkadot is Also a Fertile Ground for NFT
As a blockchain network that supports multi-chain interoperability, Polkadot offers abundant opportunities for the development of NFT. While different from Ordinals NFT, the support and adaptation of NFT on Polkadot reveal the current industry’s common requirements for NFT, such as security, efficiency and cross-chain compatibility. In our article “The Current State and Potential of NFT on Polkadot,” we deep dive into the interoperable NFT projects on Polkadot and the NFT ecosystems of various parachains. Let’s analyze why Polkadot is suitable for NFT development.
Interoperability: Polkadot cross-chain features and interoperability allow for the exchange of data and assets between different blockchains, enabling NFT created on Polkadot to interact and trade with NFT on other blockchains. This provides NFT holders with a broader market and increased liquidity.
Scalability: By employing shared validators to validate and secure multiple blockchains, Polkadot offers unprecedented economic scalability. By distributing transactions across parallel blockchains, Polkadot achieves higher transaction processing capacity.
Simplified blockchain development: Polkadot’s Substrate framework makes it simple and fast to create custom NFT projects or even entire blockchain networks on its network. Developers can enjoy interoperability and security from the start by connecting to the Polkadot network. This ease of development contributes to the continuous growth of Polkadot.
Enhanced shared security: Polkadot’s unique multi-chain heterogeneous design ensures secure interactions between relay chains and parachains. Each parallel blockchain maintains its independence while also achieving shared security guarantees.
Conclusion
The explosive popularity of Ordinals NFT is technologically inevitable, and it is essential to recognize how its technical innovation can inspire and provide developers with more ideas. Developers exploring the NFT space do not have to blindly chase trends but instead consider the Polkadot ecosystem, which offers both cross-chain capabilities and interoperability. Understanding Polkadot ecosystem can be a more flexible and efficient choice for development.
About OneBlock+
OneBlock+ is a leading global community of developers in the blockchain space, serving as a talent hub for Substrate development. We provide professional technical articles and development courses, organize workshops, hackathons, and entrepreneurial competitions to facilitate practical exchanges. Our aim is to help developers master Substrate technology and delve deeper into the Web3 domain. Additionally, OneBlock+ offers multiple entrepreneurship support services, including technical guidance and access to talent resources, for high-quality Web3 projects. Our goal is to encourage more development teams to build the future open networks using the Substrate technology framework.
