Learn everything about the Bitcoin Ordinals protocol and how it functions—from satoshis to inscriptions and NFTs.
Introduction
The Bitcoin Ordinals protocol has surged in popularity, with inscriptions exceeding fourteen million at the time of writing. Discover how this innovative protocol enables the creation of non-fungible tokens (NFTs) directly on the Bitcoin blockchain.
Key Takeaways:
- Bitcoin NFTs have gained significant traction since the launch of the Ordinals protocol in January 2023.
- Ordinals allow NFTs to be created directly on the Bitcoin blockchain.
- Ordinal theory assigns unique identities to each satoshi (the smallest Bitcoin denomination), enabling tracking, transfer, and individual meaning through inscriptions.
- This makes satoshis non-fungible, transforming them into NFTs.
- Unlike NFTs on other blockchains, Ordinals NFTs exist natively on Bitcoin’s blockchain, enhancing immutability.
Why Ordinals? A Brief History of Bitcoin NFTs
Historically, minting NFTs on Bitcoin has been challenging due to limited smart contract functionality and the absence of a token standard like Ethereum’s ERC-721. Early attempts, such as the 2012 Coloured Coins protocol, marked Bitcoin with unique identifiers—an early step toward NFTs.
The Ordinals protocol, launched in January 2023, revolutionized Bitcoin NFTs by enabling direct minting on the blockchain.
What Is the Bitcoin Ordinals Protocol?
Developed by Casey Rodarmor, the Ordinals protocol leverages ordinal theory to assign sequential numbers to each satoshi. Key concepts include:
- Inscriptions: Satoshis are inscribed with data (images, text, videos) via Bitcoin transactions (up to 4MB per inscription).
- Immutability: Inscribed data becomes permanently stored on-chain, visible via Ordinals-compatible wallets or explorers like Ordinals.com.
- Metadata: Each NFT’s token ID is its satoshi number, while its metadata resides in transaction witness data.
Bitcoin Stamps: An Alternative Approach
The Bitcoin Stamps protocol offers a different method for embedding image data by storing it on Unspent Transaction Outputs (UTXOs). Unlike Ordinals, Stamps prevent data pruning, ensuring immutability but at higher costs due to larger storage requirements.
Bitcoin Ordinals vs. Stamps
| Feature | Ordinals | Stamps |
|---|---|---|
| Storage | Prunable witness data | UTXO-based (non-prunable) |
| Pros | Lower costs | Enhanced immutability |
| Cons | Prunable data | Higher storage costs |
Popular Bitcoin NFT Projects
Notable Bitcoin NFT collections include:
- Ordinal Punks: 100 unique PFPs inscribed on-chain.
- TwelveFold: Yuga Labs’ generative art collection (300 pieces).
- Bitcoin Domain Projects: Decentralized naming systems like Stacks’
.BTC.
BRC-20 Token Standard
Inspired by Ethereum’s ERC-20, the BRC-20 standard enables fungible tokens on Bitcoin via Ordinals inscriptions (without smart contracts). Over 34,000 tokens, like ORDI, have been minted.
Conclusion
Bitcoin Ordinals have redefined NFTs by enabling native on-chain storage, while innovations like Stamps and BRC-20 expand functionality. As the ecosystem grows, Bitcoin NFTs offer unique advantages in decentralization and immutability.
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FAQ
1. How do Bitcoin Ordinals differ from Ethereum NFTs?
Bitcoin Ordinals store metadata directly on-chain, whereas Ethereum NFTs often rely on off-chain storage (e.g., IPFS).
2. Can Ordinals NFTs be pruned?
Yes, but only by individual node runners. Most nodes retain the data.
3. What’s the maximum file size for an Ordinals inscription?
4MB per inscription.
4. Are Bitcoin Stamps cheaper than Ordinals?
No—Stamps cost more due to UTXO storage requirements.
5. What’s the BRC-20 standard?
A token standard for fungible tokens on Bitcoin using Ordinals inscriptions.
6. Which wallets support Ordinals?
Compatible wallets include Sparrow Wallet and Xverse.