Ordinals Surprise Bitcoin Community with NFT-like Addition to Ecosystem

Ethereum, Solana, and several other blockchains have made it obvious that NFTs are quite in demand these days. However, Bitcoin, the oldest crypto, had to sit out the movement because its network wasn't suited for this use case.

That was until 2023, when the Ordinals were introduced and immediately gained the public's attention. Since the protocol was launched, over 8.5 million Ordinals, have been inscribed, and Bitcoin registered a price boost because people are searching for exchange platforms to buy Bitcoin so they can invest in the latest digital assets introduced in the crypto world.

Are Ordinals similar to NFTs? Is the hype around them worth it? Should Bitcoin investors care? This article tries to answer these questions and provide insights about the underlying technology that powers them, so you can figure out if their use cases match your needs.

What you should know about Bitcoin Ordinals?

Ordinals are a sort of NFTs created on the Bitcoin blockchain, allowing users to number, identify, and inscribe satoshis with information.

What are satoshis? A Satoshi is the smallest unit of Bitcoin, named after the cryptocurrency's developer Satoshi Nakamoto. One Bitcoin contains 100 million sats, which are unique and indistinguishable. However, they can be exchanged for equal value, so they are fungible similarly to the tokens from other ecosystems.

However, Ordinals are different from traditional non-fungible tokens, which are connected to off-chain metadata and can suffer alterations. Ordinals allow for the information to be inscribed directly on-chain. According to specialists, Ethereum's NFTs lack this feature, which made software engineer Casey Rodarmor turn to Bitcoin to develop the Ordinals protocol. Bitcoin enthusiasts believe that the new category of digital assets could trigger a shift in the Bitcoin community, which will improve the underlying NFT technology.

The Ordinals protocol allows users to distinguish and track individual sats, which is crucial for developing NFTs in the Bitcoin ecosystem. Satoshis receive a unique number when new bitcoins are minted, and older ones are easily recognizable because they have smaller numbers.

Let's find out more about the Ordinal Protocol

We mentioned earlier that Casey Rodarmor wasn't satisfied with Ethereum's protocol for non-fungible tokens, so he turned his attention to Bitcoin when he decided to create the Ordinals. The Ordinal Protocol allows Bitcoin users to identify individual satoshis, which is a rarity considering that they are indistinguishable. Because Bitcoins are mined sequentially over time, some satoshis are older than others. If it were to analyze them from a historical point of view, the units mined during the first year of Bitcoin's existence are the most interesting ones. The same are the first coins mined during the beginning of each halving cycle. Here are the most interesting satoshis according to the rarity scheme the Bitcoin community uses.

• Mythic – the first ever mined satoshi in the Genesis block (there's only 1)
• Epic – the first satoshi created after each halving cycle (there are 5 so far)
• Rare – the first satoshi mined after a difficulty adjustment period (there are 3,437)
• Uncommon – the first satoshi in each mined block (there are over 6 million units)
• Common – all the other sats, other than the first satoshi in each block (over 2 quadrillions)

It's easy to understand why the Ordinal protocol is fascinating, considering that there are so many rare satoshis that allow Bitcoin users to develop digital assets.

What are Ordinal's use cases?

Altcoins promote themselves as better than Bitcoin because most people search for Bitcoin exchange platforms where to buy Bitcoin in exchange for Altcoins to make profits and investment reasons and also Altcoins have broader use cases. Ordinals were developed to provide Bitcoin with an extra use case, so it could help it keep up with the market's evolution. The fact that the protocol allows users to identify individual satoshis is quite interesting. Many crypto enthusiasts find collecting rare satoshis fascinating because they believe that these special units are quite valuable. The Ordinal Protocol does more than allow them to identify satoshis; it also enables the users to inscribe the units with extra data. You may wonder what inscription means because NFTs don't have this feature. The process is similar to drawing a unique model on old-school coins. When someone famous draws on the satoshi, or the model is unique, the unit gains extra value and can be traded for Bitcoins.

Many Ordinals lack complex models, and therefore they don't value much. But some NFT companies have joined the trend and launched collections of unique artworks on Ordinals. For example, Yuga Labs launched the collection TwelveFold, which includes 300 artwork pieces that are worth $16.5 million.

The average Ordinal is inscribed with art, text, or profile pictures, but developers constantly look for other ways to boost their value.

A comparison between Ordinals and NFTs

Altcoins like Ethereum and Solana have led the NFT boom. NFTs have gained popularity among the public because they rely on smart contracts, which are computer programs that run pieces of code when a set of conditions are met. Bitcoin has smart contracts, but they're less elevated than those from other blockchains, and therefore, it needs the necessary technology to power NFTs.

Traditional NFTs are created as new tokens developed on their native blockchains, but Ordinals are tools that repurpose satoshis. Therefore, Ordinals are different from well-known non-fungible tokens. Casey Rodarmor stated that he prefers to use the term digital artifacts to refer to Ordinals because it's closer to their use.

Ordinals are fully on-chain, while non-fungible tokens store content using an InterPlanetary File System. Therefore, Bitcoin users have full control and ownership over their Ordinals. No one can alter them as long as they're homed on the Bitcoin ecosystem.

Why is there so much buzz around Ordinals?

Adding digital assets similar to non-fungible tokens to the Bitcoin mainnet challenges crypto users of the oldest cryptocurrency. Bitcoin has always been a shield against inflation and has separated itself from the other digital currencies. Adding to its ecosystem, a category of assets similar to the other blockchain sends signals that it could enter the mainstream, and investors don't know what to think about it.