The world of cryptocurrency and blockchain is constantly evolving, and quickly.
NFTs with use cases ranging from digital art to the metaverse have been trending for years. While Ethereum NFTs are the most popular, these digital assets have spread to many other blockchains including Solana (SOL), Cardano (ADA) and Stacks (STX), with its leading marketplace Gamma.io.
Late January 2023, the crypto ecosystem was taken over by important news: Bitcoin Core engineer Casey Rodarmor launched the ordinal protocol, allowing for the creation of Ordinal NFTs, also called digital artifacts, directly on the Bitcoin blockchain.
What are Bitcoin Ordinal NFTs?
Simply put, Ordinals are Bitcoin NFTs you can mint directly on the Bitcoin blockchain.
Each Bitcoin is broken into 100,000,000 units called satoshis (or sats) and each sat is serially numbered, starting at 0. These numbers are "ordinal numbers", giving an order to each sat in the total supply. As Ordinals creator Casey Rodarmor explains in a podcast interview, with the new Ordinals protocol, people who operate nodes in the Bitcoin network can inscribe each satoshi with data, creating an Ordinal inscription. The digital asset therefore lives directly in a Bitcoin block, rather than on decentralized storage services.
This was made possible by Bitcoin's SegWit and Taproot upgrades which reduced resources needed to process transactions, thus increasing block size and Bitcoin's smart contract flexibility. The Ordinal Theory Handbook states that, "individual satoshis can be inscribed with arbitrary content, creating unique Bitcoin-native digital artifacts that can be held in Bitcoin wallets and transferred using Bitcoin transactions. Inscriptions are as durable, immutable, secure, and decentralized as Bitcoin itself." With each blockchain halving, satoshi scarcity will increase, and so will inscriptions' value.
To illustrate what Ordinals are, Daniel Peter, cofounder and CEO of CapsuleNFT, put it this way: "Imagine the one-cent piece you have in your pocket, and put a piece of data on it". With Ordinals, the satoshi includes an inscription with the NFT's content, which can be text, a JPEG, an HTML and more.
Why are they called Digital Artifacts?
In the Ordinal Theory Handbook, Ordinals are referred to as Digital Artifacts. This is because they are the equivalent of physical artifacts.
Imagine a coin that you've kept safe for years. You are its owner, and as long as you keep it safe, no one can take it from you. It's complete and has no missing parts, and you are the only one who can change it or dispose of it: you're the only one who can sell, trade or gift it.
For a digital asset to be a digital artifact, it must be like that coin.
A digital artifact can have owners, unlike a number (which can't be owned by anyone). A digital artifact is "complete" in the sense that its data is kept on-chain, unlike NFTs which point to off-chain content (on IPFS, for example). Additionally, an NFT that can't be sold without paying a royalty isn't totally permissionless, thus isn't a digital artifact. A digital artifact is uncensorable and immutable, whereas NFT metadata can be updated.
This definition, for Casey Rodarmor, is intended to reflect what non-fungible tokens should be, sometimes are, and what inscriptions always are.
The benefits of Digital Artifacts
The rise of Ordinals caused both excitement and controversy within the Bitcoin community. While many see them as a positive, some "Bitcoin maximalists" oppose them for taking up block space on the network and making transaction fees increase due to network congestion.
It is true that in the couple weeks following the Ordinal protocol launch, the spike in creation of Ordinals contributed to the increase in transaction fees and typical block size on the Bitcoin blockchain. However, it is likely that higher transaction fees will lead to better incentivization for miners to further secure the Bitcoin network.
Improved security and incentives, as well as the fact that more developers and organizations could be attracted to the Bitcoin ecosystem, are some of the other benefits of Ordinals. Over the years, we've seen large companies become crypto-curious, with some purchasing .eth domains, and others such as Spotify testing web3 wallet integrations, and it is widely believed that Ordinal NFTs will further this adoption.
Ordinals inscriptions open up new opportunities for Bitcoin to be used in ways that go beyond its original purpose as a digital currency, and has the potential to bring new and exciting use cases to the world of cryptocurrency.
About Gamma.io and Ordinals inscriptions
Gamma consists of three core platforms: its user-first NFT marketplace for exploring and collecting NFT collections both on Bitcoin and on Stacks, its creator-first launchpad for artists to deploy fully-tested no-code, smart contracts in minutes, and its social platform, which brings together creators and collectors in an engaging and Web3-native way.
Gamma launched its no-code creator platform for inscribing Ordinals as well as its Ordinals marketplace. The platform makes ordinals accessible for creation, trading, selling and buying, to anyone with a Bitcoin address. NFT wallets such as Xverse Wallet and Hiro Wallet support Bitcoin Ordinal functionality, making it easier to set up a Bitcoin (BTC) address for your Ordinal. BTC can be purchased on various cryptocurrency exchanges such as Coinbase.
The Bitcoin NFT creator experience is finally ready for mainstream adoption, without sacrificing superior levels of security, trust, and decentralization that only Bitcoin can offer. Ready to dive into the world of digital artifacts? Get your NFT wallet and BNS domain, and join the adventure!