Bitcoin Ordinals: Everything to Know
By Beluga Research August 16, 2023
- Bitcoin Ordinals are markers or labels assigned to each bitcoin transaction in the blockchain and enables NFTs
- Sequences of unique identifiers for Bitcoin transactions.
- Enhancing privacy, security, and scalability of the Bitcoin network.
- Creating new opportunities for developers and businesses in the crypto space.
Bitcoin Ordinals are markers or labels assigned to each bitcoin transaction in the blockchain and enables NFTs. The world of cryptocurrencies is vast and full of intriguing concepts, one of which is Bitcoin Ordinals - often referred to as a niche within the broader blockchain technology.
By giving a specific "ordinal" to each transaction, one can trace, verify and authenticate the transaction's history and origin, significantly reducing the risk of fraud or double-spending. Bitcoin Ordinals are also a new NFT type created on the Bitcoin blockchain. Bitcoin Ordinals are unique in that these are attached to individual satoshis, the smallest unit of Bitcoin. This means that each Bitcoin Ordinal is genuinely unique and cannot be replicated.
A Brief History
The concept of Bitcoin Ordinals was born out of a need for a more efficient way of handling transactions within the Bitcoin network. The original Bitcoin protocol, designed by the pseudonymous developer Satoshi Nakamoto, was revolutionary. However, as the network grew and the number of transactions increased, certain limitations became apparent.
Bitcoin Ordinals were first introduced in January 2023 by Casey Rodarmor. Rodarmor is a software engineer and Bitcoin developer who has been involved in the Bitcoin community since 2011. The idea for Bitcoin Ordinals came about after Rodarmor saw the potential of NFTs. Rodarmor believed that NFTs could be a valuable way to store and track ownership of digital assets. However, Rodarmor also noticed that the current NFT ecosystem was fragmented and lacked the security and scalability of the Bitcoin blockchain.
Bitcoin Ordinals were designed to address these problems. These are built on the Bitcoin blockchain, the world's most secure and decentralized blockchain. These are also designed to be interoperable with other NFT standards, such as ERC-721 and ERC-1155. The number of Ordinals has overgrown, and there are now over 100,000. The Ordinals project is still in its early stages, but it can potentially revolutionize how users think about NFTs. The first Bitcoin Ordinal was created on February 10, 2023. It is a simple black skull with white markings. The Ordinal was created by Rodarmor and is called "Inscription 0."
What are Bitcoin Ordinals?
Bitcoin Ordinals are a type of NFT created on the Bitcoin blockchain. These are distinct in that these are linked to individual satoshis, Bitcoin's smallest unit. This means that each Bitcoin Ordinal is a unique and scarce asset. The ordinal number of a Bitcoin Ordinal is the order in which it was mined on the Bitcoin blockchain. For example, the 500th satoshi would have an ordinal number of 500. Bitcoin Ordinals can represent ownership of a wide variety of digital assets. They can represent ownership of art, collectibles, in-game items, or even real-world assets.
Bitcoin Ordinals are created using a process called ordinal inscription. This process involves creating a new Bitcoin transaction that includes the ordinal number of the satoshi being inscribed. The transaction is then broadcast to the Bitcoin network and is added to a block. Once a Bitcoin Ordinal has been inscribed, it can be transferred to another user just like any other bitcoin transaction. The ordinal number of the satoshi will remain the same, even if the bitcoin is transferred to a different address.
Bitcoin Ordinals are more secure than other NFTs because these are stored on the blockchain. The Bitcoin blockchain is one of the world's safest and most decentralized networks. Bitcoin Ordinals are also more scarce than other types of NFTs. Only 21 million satoshis exist, and each satoshi can only have one ordinal. Ordinals can be transferred between wallets just like any other bitcoin transaction. When an ordinal is transferred, the inscription is also transmitted. This means that the new owner of the ordinal will also have access to the data stored in the inscription.
- Setup Wallet. Setup a Bitcoin wallet that supports Ordinals. Some popular wallets that support Ordinals include Xverse, Hiro Wallet and Unisats.
- Choose an inscription service. There are a few different inscription services that users can use to create Bitcoin Ordinals. Some popular options include Gamma, Unisats, Magic Eden and OrdinalsBot.
- Upload content. The inscription service will allow users to upload content, such as an image, text, or video.
- Select a satoshi. Select a satoshi to inscribe content to. This satoshi will become a unique digital artifact that users can own and trade.
- Pay the transaction fee. The inscription service will charge users a transaction fee to inscribe content. This fee is paid in Bitcoin.
- Wait for the transaction to confirm. Once the transaction has been confirmed, Bitcoin Ordinal will be created.
- Ordered Transactions. The key feature of Bitcoin Ordinals is the ordering of transactions. This allows for more efficient handling of transactions.
- Reduced Transaction Malleability. Bitcoin Ordinals help to reduce transaction malleability, an issue in the original Bitcoin protocol.
- Enhanced Security. The use of Ordinals adds an extra layer of security to transactions. This making them more secure against certain types of attacks.
- Uniqueness and scarcity. Bitcoin Ordinals are unique and scarce. This makes them valuable to collectors and investors.
- Immutability. Bitcoin Ordinals are immutable, meaning that these cannot be altered or deleted once created. This makes them a secure way to store data.
- Censorship resistance. Bitcoin Ordinals are censorship-resistant. This means that these cannot be censored or controlled by any central authority. This makes them a valuable tool for freedom of expression.
- Decentralized. Bitcoin Ordinals are decentralized. This makes them a secure and reliable way to store data.
- Cost. Bitcoin Ordinals can be expensive to create and use. This is because they require a transaction fee to be paid to Bitcoin miners.
- Complexity. Bitcoin Ordinals can be complex to understand and use. This is because Bitcoin ordinals involve a number of technical concepts, such as Bitcoin scripting and satoshis.
- Controversial. Bitcoin Ordinals are controversial. Some people believe that Bitcoin ordinals are a valuable new technology. Others believe that these are a waste of resources.
- Limited use cases. The use cases for Bitcoin Ordinals are still limited, so the value may not be as high as other NFTs.