NFTs on the Bitcoin network? What are the Ordinals?
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In mid-2014, the first NFT projects began to emerge. However, in that period, the token standard that prevailed on the Ethereum network for this type of application was the so-called ERC-20, which had the characteristic of being a fungible token.
But in 2017, a new token standard emerged on the Ethereum network, the ERC-721 standard. Unlike the ERC-20, the ERC-721 brought the characteristic of giving a non-fungible token, hence the famous NFT (Non-Fungible Token).
Most of the NFTs we know today on the Ethereum network are ERC-721 tokens with unique characteristics that do not allow their replacement. Today, there are still several types of tokens, such as ERC-1155, a multi-token standard that combines the attributes of the ERC-20 and ERC-721 token standards. It is a common token and intelligent contract interface for various Ethereum tokens: fungible, semi-fungible, and non-fungible.
But NFTs can also be found and purchased on other networks, such as the polygon network, a blockchain that has been gaining much strength and popularity lately.
However, the main point is that most networks work according to EVM and use the technology of the Ethereum network. This is one of the reasons why the emergence of NFTs on the bitcoin network has generated such commotion and speculation in recent days. Another reason, of course, is that the bitcoin network did not support NFTs, and its maximalist followers needed to be more adept at this asset.
But then what changed? And how has it changed?
It all started with the launch of Taproot, a feature of the Bitcoin Core (BTC) network, which allowed data to be recorded on-chain by any holder of a full node on the network. With that, the Ordinals protocol also emerged, which created a wallet dedicated to registering NFTs using Taproot to immortalize data on the network.
The big difference between the NFTs on the bitcoin network is that bitcoin doesn’t have a different token standard like the Ethereum network. What the Ordinals protocol does is create an inscription. That is, it tracks and identifies each of the satoshis and assigns unique characteristics. Remembering that 1 #BTC = 100 million satoshis.
The Ordinals project assigns these characteristics as common, non-common, rare, epic, legendary, and mythic, depending on the occurrence in which that satoshi was produced. With the mechanism to track and identify each satoshi, it is now possible to register files in these small spaces.
But does the bitcoin network support NFTs?
Unlike traditional NFTs, where the image and metadata are uploaded to a third source, such as IPFS, here both the metadata and the image are recorded directly on-chain, linked to a specific satoshi. This causes the network to be overloaded, already having an entire block with just one transaction.
Now that you understand more about it, are you bullish or bearish on Bitcoin NFTs?
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