Ordinals, NFT projects on the Bitcoin blockchain, are taking the crypto community by storm. On the 21st of January, software programmer Casey Rodarmor unveiled the Ordinals protocol, a new way of numbering/positioning a series of satoshis. Ordinals (combined with the Taproot protocol) presents a new way of attaching data to a small portion of Bitcoin. Before we get too technical, let’s take a look at the functionality of Ordinals and the current buzz surrounding the subject.
Table of Contents
- What are Bitcoin Ordinals?
- How to use Bitcoin Ordinals
- The current buzz surrounding Ordinals
- The potential of Ordinals
What are Bitcoin Ordinals?
We already mentioned the basic principle of Bitcoin NFT’s, but let’s dive a little deeper into the specifics. To have a better understanding we need to start with some Bitcoin Basics. As you may or may not know, a single Bitcoin can be divided into smaller units called satoshis or sats, the smallest denominator of a bitcoin. 1 sat = 0.00000001 BTC, meaning that 1 BTC can be divided into 100,000,000 satoshis.
On the 14th of November 2021, the Taproot upgrade was implemented on the Bitcoin blockchain. One feature of Taproot enabled so-called tapscripts, inscriptions which allows the attachment of on-chain data to a single satoshi. This data inscription can’t surpass the size of 400kb, meaning that you can attach a sound, photograph or pdf to a single satoshi. Still following us? Good! Let’s move on.
On the 21st of January the Ordinals protocol was released. When we look at the word ‘ordinal’, the Cambridge dictionary gives the following description: a number such as 1st, 2nd, 3rd, 4th, that shows the position of something in a list of things.
When we apply this to the Bitcoin blockchain, ordinals are a way of numbering/positioning a series of satoshis. Combine Taproot’s data inscriptions with ordinal numbering and you get the Ordinals protocol; NFT’s on the Bitcoin blockchain. The effect? 105,841 inscriptions have been made in the short span of 25 days. Let’s check out the very first ordinal, followed by some other examples.
Ordinals is a protocol that allows users to mint NFT’s (aka digital artifacts or inscriptions) onto Bitcoin’s blockchain. These NFT’s (non-fungible tokens) are not just limited to images but can contain any type of data — which may include unique inscribed items like videos, gifs and sounds. It’s a new way to mint NFTs on the Bitcoin blockchain, one that involves putting the actual content of the NFT completely on-chain.
How to use Bitcoin Ordinals
Step 1: Find the right wallet.
The Ordinals protocol is new, meaning that many wallets cannot view the inscription/data. Popular wallets like Metamask do not support this feature. Luckily, Sparrow Wallet allows users to receive the NFT on a Taproot address. As time will pass, more wallets will follow.
Step 2: Install your wallet.
Sparrow Wallet only works on desktop, so you are going to need a laptop or computer to install it. During the installation you need to make sure that your wallet can view Taproot inscriptions. The best way is to follow this Github guide step-by-step to make your wallet Ordinal-compatible. Congratulations, this wallet can now receive Bitcoin NFT’s.
Warning: Make sure that you only use this wallet for Ordinals! Sending BTC from this wallet can accidentally send your Ordinal with it.
You now have three ways of actually sending/inscribing an NFT to your wallet.
- Run a Bitcoin Node and inscribe it yourself.
- Buy an Ordinal from someone else.
- Use an Ordinal service and upload your own NFT.
Step 3a: Sending a NFT to your wallet – Run a node
The NFT needs to be broadcasted to the blockchain itself. If you run a Bitcoin node, you can essentially inscribe the satoshi and have it broadcasted to other nodes for synchronization.
Step 3b: Sending a NFT to your wallet – Buy an Ordinal
Another option is to buy an Ordinal from someone else since the market is peer-to-peer (user to user). Discord servers are popping up where people are advertising their Ordinal.
Warning: Buying Ordinals from someone else is not recommend, as it requires you to break almost every rule you’ve ever heard about regarding scams and wallet hacks.
Step 3c: Sending a NFT to your wallet – Use an Ordinal service
The most popular option is by using an Ordinal service, where you simply upload your image, enter your Ordinal-compatible wallet address and pay the miners/service fee for it to go through. After a while, your image will be transferred to your wallet and will be converted to a NFT. Basically, the bigger the image, the more you pay. The faster you want it, the more you pay. The amount of sats you pay, determines whether the NFT will be transferred in a matter of seconds, or a matter of days.
The current buzz surrounding Ordinals
Now that you know more about Ordinals, we are going to discuss the hype that is currently surrounding Bitcoin NFT’s. The best way to do that, is with some numbers. Keep in mind that the Ordinals protocol was launched on the 21st of January. During those twenty-five days, Ordinals achieved the following:
- 105,841 inscriptions have been made in the short span of 25 days.
- The launch of Ordinals has tipped the number of non-zero Bitcoin addresses to an ATH of 44 million.
- The highest limit of the average Bitcoin block size has increased from 1.5 – 2 to 3 – 3.5. Meaning that more Bitcoin blocks are being filled with data.
- Ordinals currently occupy 50% of the Bitcoin block space.
- Bitcoin miners have made over 700K from Ordinal transactions.
The potential of Ordinals
It goes without saying that Ordinals has created a buzz in the crypto community. There are also those who are less positive, stating that Ordinals bloat the Bitcoin blockchain with images. They believe that the blockchain should solely exist for financial transactions. The current negative sentiment surrounding NFT’s (monkey jpgs) does not help either. The introduction of Ordinals might accelerate the introduction of layer-2 solutions on the Bitcoin blockchain.
On the other side there are people that see the potential. What if you could immortalize your wedding pictures or upload songs or pdfs to the blockchain. The technology is still new and is just starting to get the attention of Bitcoin users and developers. Bitcoin Ordinals encourage further experimentation and development of the Bitcoin network, which results in innovation within the ecosystem. Let’s see where it takes us.