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Ordinals: exploring the Risks and Opportunities of NFTs on Bitcoin

The Ordinals project lets digital content be written on Bitcoin’s blockchain.
| Cryptopress
Last updated: February 21, 2023

By CryptoPress

NFTs in Bitcoin? who knew? But non-fungible tokens (NFTs) are all the rage in the crypto world, and now Bitcoin is joining the party. The Ordinals project, which started in January, lets digital content be written on Bitcoin’s blockchain. This makes the blockchain a platform for NFTs. The move has started a heated discussion about the pros and cons of these inscriptions in the Bitcoin community.

What are the Ordinals?

The Ordinals protocol enables non-fungible tokens (NFTs) to be appended to Bitcoin transactions. It was released in January and allows images and other types of data to be written directly on satoshis on the Bitcoin blockchain. This means that NFTs can now be used on the largest crypto network. Every Ordinal inscription is deemed a “digital artifact” because it is claimed to be immutable and forever enshrined on the Bitcoin blockchain. 

The Risks and Opportunities of NFTs on Bitcoin

The Ordinals protocol has a number of benefits, such as the ability to store whole images or pieces of content on-chain, making them permanent and impossible to change. This is unlike most other NFT projects on Ethereum, Solana, and Stacks. So far, over 50,000 ordinals have been minted on the Bitcoin blockchain, with some projects already fetching high prices.

Some Bitcoin purists, on the other hand, say that these inscriptions are just spam that takes up space in blocks and makes it hard for real financial transactions to happen. Detractors of Ordinals have tried appealing to Bitcoin node operators and miners to censor inscriptions. In the end, nodes and miners are the ones who decide which transactions are valid and should be added to the blockchain. They have the ability to censor certain transactions.

Stacks is another platform that uses Bitcoin’s security and has its own NFT ecosystem that is growing. Stacks is a Bitcoin sidechain. In the past few days, there has been a big increase in the number of Stacks NFTs that are traded. This may be due to interest in the Ordinals protocol and Bitcoin NFTs.

Some of the Ordinals NFTs

Latest inscriptions of Bitcoin Ordinals
Bitcoin Ordinals – Latest inscriptions

Inscription 0

The very first Ordinal to be minted on Bitcoin, Inscription 0, is simply a black skull with white markings.

Black and white skull
Image: Ordinals.com

Bitcoin Rocks

The first Ethereum NFT collections are honored once more in Bitcoin Rocks. It resembles Ether Rocks, one of the earliest NFT collectible projects on the Ethereum blockchain, in appearance and feel. After they made the first one at Inscription 71, the ordrocks only made 100 of this series of rocks. Prices for some NFTs on exchanges have risen to over $22 million, or 1,000 Bitcoins (BTC) or 13,858 Ether (ETH). The current minimum acceptable bid is 37.42 ETH (nearly $61,000) or 2.7 BTC. 

Rocks in different shades of grey and brown - Bitcoin Inscriptions
Image: Ordrocks

Bitcoin Orbs

Bitcoin Orbs Ordinals asserts itself to be the first Manifold NFT Edition built upon the Ordinals protocol. People who hold and burn the Bitcoin Orb edition non-fungible token on Ethereum will be the only ones who can get Ordinals. It was created by Joan Westenberg, who intends to make it one of the first collections to connect Ordinals with the Ethereum chain. 

Bitcoin Orbs
Image: Bitcoin Orbs

In short:

  • Non-fungible tokens (NFTs) are now available on Bitcoin’s blockchain with the Ordinals project.
  • This project enables the inscription of digital content on Bitcoin’s blockchain, making it a platform for NFTs, with over 50,000 ordinals minted so far.
  • Proponents of Ordinals argue that inscriptions increase demand for block space and drive a healthy fee market compensating miners for securing the network.
  • Detractors of Ordinals have tried appealing to Bitcoin node operators and miners to censor inscriptions. Ultimately, it is up to nodes and miners to determine which transactions are legitimate and included in the blockchain.
  • Stacks, a Bitcoin sidechain, is another platform that leverages Bitcoin’s security and has a growing NFT ecosystem of its own.

© 2022 Cryptopress. For informational purposes only, not offered as advice of any kind.


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