Exploring Ordinals NFTs: a revolutionary use case for Bitcoin network
Non-fungible tokens are one of the most exciting inventions of the last decade. They can find their place in the majority of businesses. Their application is almost limitless. To date, the leading blockchain for minting is the Ethereum network, appearing in popular standards such as ERC-721 or ERC-1115 due to their simplicity and versatility. Other networks on which NFTs are built are, e.g., Binance, Polygon, Solana, Tezos, or Cardano. The choice of a network depends mainly on what utility the token is to have in the future. Why is the most popular cryptocurrency pioneer Bitcoin missing from this list? Welcome to the article, in which we will talk about why there have been no NFTs on Bitcoin so far and explain what Ordinals NFTs are.
Why hasn’t there been a Bitcoin NFT until now?
Bitcoin is a network whose main purpose is to handle BTC cryptocurrency, not to store and transfer data related to other types of digital assets such as NFTs. Moreover, there is no built-in smart contract system, which is a fundamental part of NFT creation. They are responsible for creating, storing, and managing NFTs. They determine who owns and what can be done with the assets. Creating an NFT on Bitcoin would require the use of second-level layers such as Lightning Network or RSK, which makes adoption much more difficult for users.
Curiosity: Colored Coins — Bitcoin ownership solution
As a curiosity, it is worth mentioning the solution of Colored Coins on the Bitcoin network. The idea was invented by bitcoin miners. It allows assigning ownership to a particular bitcoin. They give additional properties to represent other assets than just the cryptocurrency itself.
A popular project using Colored Coins was the Rare Pepe Wallet, which allows the creation and trading of digital Pepe cards representing characters from Internet memes.
Changes that occurred in 2023 — Discover Bitcoin Ordinals
In January 2023, Casey Rodarmor — a software engineer, co-founder of Bitcoin Core, and creator of various projects using the Bitcoin network for content storage and payments, created the Ordinals Protocol.
Ordinals allow users to view, send and receive a satoshi, which can be unique data. The process of adding specific content to satoshi is called inscription. It does not require a side chain or an additional token.
NFTs are stored on Bitcoin’s main chain, unlike, for example, Ethereum, where they reside in IPFS — a decentralized file storage system. It’s a protocol for storing and sharing files on a peer-to-peer network. NFT Ethereum owners can bind files to an NFT address using smart contracts.
Summary — exploding popularity of NFT on Bitcoin
Just a few weeks after Ordinals’ launch, popular NFT collections such as CryptoPunks and Taproot Wizards began to appear on it. The price of bitcoin itself has seen a significant rise, and the topic of Ordinals is widely discussed in the industry. In time, the potential of the Ordinals will be even more widely exploited. Already three wallets — Ordinals Wallet, Xverse, and Hiro Wallet have announced the possibility of storing NFTs on them. For the moment, minting NFT on Bitcoin is expensive and risky due to the fact that the whole concept is only at the very beginning of its journey. It’s worth observing this process and being a part of it so as not to miss the wave of popularity that awaits this type of asset. Time for a new chapter of NFT history.
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Written for BlockyDevs
