Bitcoin Ordinals Benefits
Intro to Ordinals
On January 21st 2023, Bitcoin Core software engineer Casey Rodarmor launched the ordinals protocol, which seems to have taken over the NFT market and wider crypto ecosystem since, brining many new users to the Bitcoin community. By finding a way to inscribe 4MB of data on a Bitcoin block, Casey Rodarmor has unlocked a plethora of new possibilities for the Bitcoin blockchain and Bitcoin enthusiasts.
A rough way of defining Ordinals is to say they are Bitcoin NFTs you can mint directly on the Bitcoin blockchain. Ordinals were made possible by Bitcoin's Taproot network upgrade. 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."
Each Bitcoin (BTC) is broken into 100,000,000 units called satoshis (or sats). In a podcast interview, Casey Rodarmor explains that in brief, the protocol allows users to send and receive sats --- the smallest measuring unit of Bitcoin recorded on the blockchain --- that carry optional extra data in ordinal progression. Each sat is serially numbered, starting at 0. These numbers are "ordinal numbers" in the mathematical sense, giving an order to each sat in the total supply. Satoshi scarcity is cut in half every four years (halving every 210,000 blocks).
The difference between NFTs and Bitcoin Ordinals
By now, you've heard of NFTs, unique digital assets on the blockchain. Although they are most popular on the Ethereum (ETH) blockchain, they have spread to other blockchains such as Solana, Polygon and Stacks, with its leading marketplace Gamma.io.
Non-fungible tokens, such as Ethereum NFTs or Stacks NFTs, generally point to off-chain data which is kept on IPFS, a decentralized file storage system that can be changed using dynamic metadata. To Rodarmor, this makes them "incomplete". Ordinals NFTs, however, are "complete" because all the data is inscribed directly on-chain, and are intended to reflect what NFTs should be: true digital artifacts. NFTs often have creator royalties attached to them, as is the case on NFT marketplaces such as Gamma.io, whereas digital artifacts don't necessarily. It should be noted Gamma.io implemented opt-in creator earnings for Ordinals, yet again putting creators first.
Benefits
According to ordinals proponent, developer and blockchain consultant Udi Wertheimer, Bitcoin NFTs will have a positive impact on the ecosystem, with improved security and incentives, amongst other things. In an interview with Cointelegraph, he explored the following benefits.
In the couple weeks following the creation of the Ordinals protocol, the spike in creation of Ordinals contributed to the increase in transaction fees and typical block size on the Bitcoin blockchain. The scarcity of block space in the system boosts the demand, hopefully incentivizing miners, since revenues coming from bitcoin mining rewards are expected to go down after each halving of Bitcoin.
It is likely that higher transaction fees will lead to better incentivization for bitcoin miners to further secure the Bitcoin network, bringing new developers and bitcoin users to the network. With the rising demand for Ordinals, it is also possible more and more users who are willing to pay to keep the blockchain safeguarded will join the network.
The Bitcoin blockchain was originally designed as a cryptocurrency and peer-to-peer network meant for financial transactions. Ordinals inscriptions can add new capabilities to the chain, enhancing its functionality beyond its original purpose. Ordinal projects can be anything from JPEG images to PFP projects but more than NFTs, they are a revolution in the Bitcoin space: by making it easier and more efficient to use Bitcoin, Ordinals can help promote mass adoption of the cryptocurrency and blockchain. More users, more transactions and more overall value can be brought to the Bitcoin ecosystem through the growth of Ordinals. As we are still in the early stages of Ordinals, new use cases may be discovered, so make sure to keep an eye on the latest news.
About Gamma.io
Gamma consists of three core platforms: its user-first marketplace for exploring and collecting digital art, 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 is the leading open marketplace for Stacks NFTs (a smart contract layer for Bitcoin, that enables DeFi, dApps and more) and supports over a thousand Stacks NFT collections, nearly 80% of which were deployed using its no-code launchpad. Its marketplace has facilitated millions of dollars of transactions and supports trading the largest number of NFT contracts of any platform built on Bitcoin.
In the midst of all the Ordinals related crypto news, Gamma launched its no-code creator platform for making NFTs on native Bitcoin, using Ordinals. Gamma's platform makes creating Ordinals simple and accessible to anyone with a Bitcoin address. Crypto wallets such as Xverse Wallet and Leather Wallet also support Ordinals.
Soon after, Gamma released its trustless Bitcoin Ordinals marketplace, making all inscriptions instantly tradable.
Paired with the creator launchpad on the Stacks programming and scaling layer for Bitcoin, 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.