Just a few months ago, no one would have predicted that Bitcoin would process nearly half as many NFT transactions as Ethereum. Since its inception, Ethereum has processed a staggering 38 million NFT transactions, eclipsing Bitcoin’s 320,000. However, the explosive popularity of Ordinals is reinventing the world’s oldest blockchain as a place to store art, movies, collectibles, tickets, and even video games.

Evidently, NFTs in Bitcoin are nothing new. Satoshi Nakamoto coined the first NFT in 2009 when they inscribed Ordinal No. 1 using transaction code data in the genesis block: “The Moments 03/Jan/2009 Chancellor on brink of second bailout for banks.” For more than a decade, Bitcoin users have used uncomplicated text and hashes to inscribe memories on the chain, including the Bitcoin white paper.

Bitcoin NFT Ordinals vs. Inscriptions

Rodamor’s Ordinals protocol assigns serial numbers to individual satoshis, the smallest subdivision of a bitcoin, using wallet software other than Bitcoin Core. The former Bitcoin Main developer wrote and debugged the custom “ordwallet” program as a year-long passion project.

Its ordwallet numbers are similar to the serial numbers on one-dollar bills. While all one-dollar bills are worth at least $1, special serial numbers give additional numismatic value to rare bills.

The Bitcoin protocol itself will always value a satoshi at one satoshi, but the Ordinals application allows NFT collectors and traders to pay more to collect certain satoshis in their wallets.

Enrollments can use almost any type of data. Thanks to Bitcoin’s Taproot update, each inscription can use up to 4 MB of data each using Bitcoin’s SegWit token data discount. Because most inscriptions are digital art equivalent to NFT, many refer to the inscriptions (or ordinals) as NFT.

BRC-20s Use Ordinals

Other registrations are not NFTs at all, but traditional altcoins. Ordinals allow Bitcoin to use an experimental standard called BRC-20, which allows the minting of non-BTC tokens on the Bitcoin blockchain. Its supporters say it is very similar to Ethereum’s preferred ERC-20 standard. There are countless examples of ERC-20 tokens, including USDC, SHIB, BUSD, DAI, APE, and UNI. Today, the most preferred BRC-20 token is the aptly named ORDI.

The BRC-20 standard allows token creators to attach tokens to ordinals by adding a JSON file that outlines the token’s characteristics. Activity on OrdinalsWallet shows attempts to create BRC-20 tokens by adding the JSON file. BRC-20 supporters say the standard enables DeFi, tokenization, and experimentation with new features directly in Bitcoin.

The use of enrolled ordinals requires a wallet capable of supporting them. Many wallets do not support them. Bitcoin Core does not recognize the standard by default, for example.

Big Numbers Lure NFT Traders to Bitcoin

Enrollments have increased the amount of data to be processed in the Bitcoin crimson. Since enrolled ordinals started to become popular, the amount of pending transactions in the Bitcoin mempool has increased dramatically. Transaction fees reached $30 on some days this month.

Attracted by the novelty and profit potential, traders are flocking to Bitcoin Ordinals. Individual enrollments can sell for more than 50 bitcoin ORDI, a BRC-20 token based on Ordinals, nonexistent a month ago, has its own $160 million market cap.

Enrolled Ordinals can increase trading volume. One enrolled collection, Bitcoin Frogs, briefly passed the Ethereum-based Bored Ape Yacht Club in trading volume. Three ordinal collections briefly reached the top 10.

By Marina Meza


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