Since 2009, Bitcoin has been the leading blockchain-based digital currency – but today, NFTs also have their place on the chain.
Known as Bitcoin Ordinals, these digital assets have opened new frontiers for digital art, collectibles, and blockchain culture.
Their introduction has turned the world of blockchain-based assets on its head – but what makes Bitcoin Ordinals unique, how do they work, and why should they be on your radar?
Master the topic, as we explain Bitcoin Ordinals in 2024.
What are Bitcoin Ordinals?
Bitcoin Ordinals debuted in January 2023, developed by Casey Rodarmor. He utilised new features in Bitcoin’s November 2021 Taproot upgrade to allow for data to be inscribed on individual satoshis, in an effort to create a more fair, equitable and authentic ecosystem for blockchain art.
There’s multiple Ordinals standards on Bitcoin, including BRC-20 – a Bitcoin equivalent to ERC-20 NFTs on Ethereum – and Runes, a more efficient standard for Bitcoin-based art. This led to many existing NFT collections experimenting with Bitcoin Ordinals, introducing the likes of BTC DeGods, and Yuga Labs‘ TwelveFold.
A fast-growing number of wallets, exchanges and platforms now support Bitcoin Ordinals, with popular wallets such as Xverse, Leather, and OKX Wallet – and marketplaces such as Magic Eden, OKX, and Gamma.
Today, Bitcoin Ordinals continue to grow. Stacks emerged as a Layer-2 network for Bitcoin – building its own NFT ecosystem on Bitcoin. Further improvements are on the way too, with the hopes of turning Bitcoin Ordinals from a niche segment of the blockchain industry into a major player.
What makes Bitcoin Ordinals different?
Bitcoin Ordinals work in a different way to Ethereum-based NFTs.
On Ethereum, data about an asset is added to a smart contract, with the art typically stored on an IPFS service such as Pinata or Infura. On Bitcoin, the data is inscribed onto individual satoshis, making Ordinals fully on-chain.
As every satoshi on Bitcoin was mined in order, there’s a maximum limit to the number of Ordinals there can ever be: roughly 2.1 trillion. As each satoshi exists as normal on Bitcoin, they can be bought, sold and traded in a similar way to NFTs on Ethereum.
Ordinals also have a built-in rarity layer that Ethereum-based NFTs do not have. Particular satoshis are more desirable than others, such as the first satoshi of a new block. The Rodarmor Rarity Index categorizes all satoshis into 6 different rarities from Common to Mythic, adding another desirability layer to Ordinals.
Bitcoins Ordinals have been met with a mixed reaction. Critics argue that Ordinals weaken Bitcoin’s position as a financial asset, driving congestion and higher fees. Supporters argue that Ordinals expand Bitcoin’s capabilities, opening new ways for both Bitcoin and digital art to succeed.
The story of Bitcoin Ordinals so far
Ordinals are not the first attempt to create NFTs on Bitcoin.
2014 saw the debut of Counterparty, which tried a more rudimentary approach, but faced limitations with scalability, storage and scripting that led to it falling out of favour.
Bitcoin’s Taproot update in November 2021 opened the path for a new solution – and in January 2023, Casey Rodarmor introduced the Ordinals protocol on Bitcoin.
March 2023 saw the introduction of BRC-20 tokens, starting a surge of new Ordinals projects such as Taproot Wizards, Ordinal Punks and Bitcoin Frogs. Their popularity saw NFT marketplaces like Magic Eden and OKX quickly add Ordinals support.
By the end of 2023, over 10 million Ordinals had been inscribed – and that has continued to grow across 2024, with more tools, platforms and enthusiasts than ever before.
What lies ahead for Bitcoin Ordinals?
Bitcoin Ordinals have a series of upgrades in the pipelines.
Addressing ongoing scalability issues is paramount, including the development of the Stacks L2 ecosystem. DeFi, tokenized securities and digital art still have a long way to go – and with the rapidly-changing regulatory environment (particularly in the U.S.), Ordinals could be a gateway for user adoption moving forwards.
The popularity of Bitcoin Ordinals is a indication of how Bitcoin ecosystem can adapt to changing trends and consumer habits. As it continues to develop, Ordinals continue to offer exciting opportunities for artists, collectors, and investors alike.
Whether you’re for Bitcoin Ordinals or against them, their impact looks set to grow as we head into the future.
Riding crypto waves since 2012, bridging digital and physical worlds through prose.