Were you to break Ordinals down to someone with a vague idea about the Web3 space and all its grandeur, you’d probably be tempted to mention non-fungible tokens. Hardly can you come across anyone who hasn’t heard this word muttered about at least once. A-listers from Snoop Dogg to Paris Hilton to Eminem have ventured into this friendly space and brought even more popularity to them.
Now, comparing NFTs with Ordinals would only be misleading in some aspects. Bitcoin Ordinals aren’t NFTs but are just referred to as NFTs. These are fractional units of the original Bitcoin worth thousands, officially known as satoshis. Part of what gives these assets value is represented and distinguished by the inscription endowed, like an image, text, video, sound, or other type of digital data.
Ordinals aren’t exactly NFTs, so their value is incomparable. Unlike many popular NFT operable on Ethereum, Solana, and so on, Ordinals are an entirely different matter. They “stamp” the information directly onto the satoshi, and each existing one has some sort of data. Many Ethereum-native NFTs have moved to the Bitcoin network to leverage ordinals’ better security system, enabling enthusiasts to browse them on dedicated places like https://magiceden.io/ethereum and invest in the refined versions. Now, why are they referring to ordinals as non-fungible tokens? Isn’t it like mixing chalk and cheese?
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Bitcoin Ordinals started humbly
Bitcoin possessors wouldn’t have anything to do with NFTs for years, as blockchains like Ethereum and Solana would be the go-to for memes and artistic expression in the form of investment thanks to their SPL and ERC-721 token standards. Bitcoin’s protocol was created with entirely different purposes in mind, which are easily definable since it’s the token that gave birth to the concept of digital money. Bitcoin realized the dream of many previous attempters to develop digital currencies who couldn’t take it to the finish line. Satoshi Nakamoto, the said Bitcoin developer, is an anonymous individual or group of technicians who succeeded in creating this revolutionary digital payment system.
Rewinding to NFTs, these necessitate extra data structures and functionalities that the primary blockchain doesn’t have. But this backdrop doesn’t mean there are no ways around digital artistic expression in the web3. As Casey Rodarmor, a software dev known as one of the most conversant Bitcoiners, has proven, the first blockchain network can ever support NFT-like developments.
NFTs want a piece of the Ordinals fame
Ordinals differ from NFTs in some aspects, one of them coming down to convenience, where the point goes to the former. Ordinals boast the advantage of not being restricted to a specific data limitation, besides the 4 MB found in the transaction witness channel.
Fast forward, security is also a boon for ordinals. Throughout time, many NFT projects vanished after unforeseeable downfalls of websites holding them, leaving investors broken. The immediate need to prevent such mishaps from happening again pushed many NFT projects, such as the sought-after Bored Apes, to relocate to Bitcoin. And yes, this is possible. Similarly, you can confidently invest in all the desired ordinals once you choose a reputable, well-established marketplace for their sales, trading, etc.
What exactly are Bitcoin Ordinals?
Owing to the longevity of Ordinals, these inscribed data documents represent one of the most potent types of high art, as NFTs are. Long ago, non-fungible tokens could be minted and employed on smart contract ledgers like BNB Chain, Tezos, Ethereum, Solana, and others. They didn’t do it on Bitcoin until late 2022.
To clear things up, ordinals represent a protocol that offers a system to count the small Bitcoin units known as satoshis. A BTC unit worth over $65K at the moment of writing can be fractioned into 100MN of satoshis, each valuing a negligible amount of Bitcoin. What makes the ordinals unique is that each is offered a one-of-a-kind serial number, making them distinguishable. These ordinal numbers found on the small Bitcoin units permit numerous other types of information, like images and videos, to be inscribed.
How do Ordinals differ from Runes?
If you’ve been keeping up with the bountiful threads in the crypto sphere, chances are you’ve come across the concept of “runes” a few times and wondered what the catch is. Why are they mentioned together with Ordinals and what’s the distinction?
Runes, developed by Casey Rodarmor, differ from Ordinals in that they aim to build fungible tokens that resemble the ERC-20 tokens of Ethereum. On the flip side, Ordinals permit the inscription of data on singular units of Bitcoin, also known as satoshis. As you will see by browsing through the multitude of runes on your favorite marketplace, they have funny names and differ wildly in price. This is another characteristic that makes them stand out. They’re volatile and their denominations ensure that big brands cannot profit from runes as they might be tempted.
Both Ordinals and runes are readily purchasable and tradeable – all you have to do is find a reliable and trustworthy supplier.
Ordinals have revolutionized NFT technology
The NFT market was in the doldrums when the famous Ordinals developer finished the last details of the Ordinals protocol project. The development debuted without the publicity or fuss many may have expected. From their moment of debut in December 2022 to the final of the Q1 of 2023, a booming market was supporting them. Enthusiasts were investing like crazy into the inscriptions that looked like a Bitcoin NFT spin-off. Inevitably, the wildly grossing assets crippled the mining industry.
So far, over 70MN ordinals have emerged. The road has been bumpy, however, as the network dealt with excessive traffic like Ethereum did when Crypto Kitties boomed. Nevertheless, as the crypto industry has accustomed supporters, resolutions emerged, and many users reallocated to Merlin Chain, Stacks, and other similar Layer-2 networks. The former, for instance, built a whole new ecosystem around Bitcoin-generated assets, offering new ways to venture into the market. One of the best things about L2 is that it streamlines operations and permits multiple transactions to occur with the speed of light.
Ordinals and NFTs are not inseparable bedfellows
The primary difference between non-fungible tokens and ordinals is that the worthiness of each ordinal is associated with its history instead of the artwork inscribed. Rodarmor created a system where unique sats are registered to differentiate the greatest ones, like those minted by Satoshi Nakamoto. This means that the transaction record of the ordinals and their age can boost their value. Other sats rise in popularity when they’re launched around well-awaited events, like the halvings or when the mining difficulty changes.
Bitcoin Ordinals make things easier.
A few technical distinctions exist between ordinals and non-fungible tokens, which is why the former are said to be a new breed of NFTs or an unparalleled milestone in their ecosystem. The ordinals’ creator himself exclaimed that non-fungible tokens, or “digital artifacts,” as he calls them, are half-finished. Numerous NFTs need off-chain data in order to pay their inventors royalties.
On the flip side, every piece of data belonging and through an ordinal is stored on the Blockchain network, endowing it with the attribute of sufficiency.