If you are in the blockchain/crypto/web3 space, you have undoubtedly been subjected to a litany of news regarding Bitcoin “Ordinals,” aka “Inscriptions,” aka “Bitcoin NFTs.” This is the latest rage to sweep the crypto world, and it’s shaping up to be a similar hype to what happened with Ethereum NFTs in the summer of 2021.
What are Ordinals, and How Do They Work?
“Regular” NFTs are typically produced through the use of a smart contract, similar to the creation of crypto tokens. This is why they were named "non-fungible" tokens, as they are generated in a similar manner - but aren’t used to spend; they aren’t fungible. The NFT smart contract outlines how to mint, trade, send, and any other transaction that might involve the NFTs contained within that contract. The Ethereum ecosystem started with ERC-720 and expanded with new specifications for various NFT types. Other blockchain networks followed suit, often adopting the Ethereum standard.
Bitcoin ordinals, on the other hand, work differently. For more information, check out the original Ordinals Handbook. In short, ordinals are generated through the "inscription" process, where units of Bitcoin (or "sats") are used. These sats, and their accompanying ordinal, will be recorded on the ledger and can be transferred together. My understanding is that 10k sats (for example) are often bundled per inscription, but I can’t say whether this is true or not.
The beauty of bitcoin ordinals is that they are secured by the highly decentralized and secure bitcoin blockchain, and the actual data (the graphic binary) is stored directly on the chain rather than being linked to IPFS or a website.
OK, Cool, So How Do I Get Them?
Well, it’s still the Wild West, tbh. There aren’t any exchanges that fully support selling them yet. This means trading is difficult, requiring escrows or trust. You can see them all at the ordinals site, and they are numbered from 0 until the latest (currently approaching 50k). Not every Bitcoin wallet will support this. The ord wallet was made for storing and creating them; Sparrow also supports ordinals, as does Alby, a web-based wallet.
Be careful, and this is important because ordinals are encoded within sats. If you don’t use a compatible wallet, or if you send bitcoin from your ordinals wallet, YOU MIGHT UNWITTINGLY SEND YOUR ORDINALS AS FRACTIONAL BITCOIN. Do not send them to exchanges or non-supported wallet addresses.
That said, if you get in now, this could be a great time, as it’s early.
I Want To Make Some!
Ohhhh, you’re the artist or entrepreneurial type. Great. Fortunately, that has gotten a LOT easier. gamma.io has an ordinal creator tool, and Satoshibles NFT project created the Ordinals Bot for you to do this. Otherwise, if you’re a geek type (and you are reading Hackernoon, so I am guessing you might be), you are free to download a full bitcoin node and use the ord wallet.
Additionally, Emblem Vault is working on a way to bring your NFTs across chains to live on and be secured by Bitcoin.
Most of the projects on Bitcoin now are derivative: punks, on-chain monkeys, and even rocks. There is definitely an opportunity to create some unique projects here - and undoubtedly, there are numerous collections in the works. Just keep in mind the tooling is still very nascent. Doing things like allowlisting (or at least collecting $BTC wallets for airdropping) will only be available from frens this weekend.
Because there is no mint() function, ordinals need to be created manually or from a script. This means at current, there are a few possible ways to do this:
- Build your own site that creates ordinals on demand and can handle “minting” your NFTs.
- Create all of the inscriptions upfront and send them one by one to buyers. A hassle, to be sure.
- Use another chain to mint NFTs that will represent the inscriptions, then let your community know how to get wallets and drop them to your holders. Fine for a few hundred, but likely not for a 10k collection.
- Let users create their own inscription, and whoever mints each graphic first (aka has the lowest instance - all inscriptions are numbered) has the "original.” Catalog them.
- Or just wait until gamma or Satoshibles or whoever builds something to make this easier.
LFG!
It’s great to see Bitcoin getting some additional functionality and attention again. Whatever happens, as always, it will be fun to watch. If you have questions, find me on Twitter and reach out anytime.
Note: this is not investment advice. I am just providing information on the technology. Investing in cryptocurrencies and NFTs is extremely risky. Do so at your own risk.