Ordinals Use Cases

On January 21st 2023, Bitcoin Core software engineer Casey Rodarmor launched the ordinals protocol, allowing users to inscribe 4MB of data on a Bitcoin block, which has been the talk of the web3 ecosystem since.

As Casey Rodarmor explains in a podcast interview, with the new Ordinals protocol, people who operate Bitcoin nodes in the Bitcoin network can inscribe each sat (the smallest unit of Bitcoin) with data, creating an Ordinal NFT.

Inscribing Ordinals brings many benefits to the Bitcoin ecosystem, including more utility, bigger block size, more transactions, more miner incentives and overall growth. While many in the Bitcoin community see them as a positive, some "Bitcoin maxis" oppose them for taking up block space on the network and making transaction fees increase due to network congestion.

But what are ordinal inscriptions, and what are their use cases?

What are Bitcoin Ordinals?

Essentially, Ordinals are Bitcoin-native NFTs, with their data living directly on the Bitcoin blockchain, without the need for a sidechain or entirely different blockchain.

The Ordinal Theory was made possible by Bitcoin's SegWit and Taproot upgrades. Individual satoshis can be inscribed with content, creating unique Bitcoin-native digital artifacts that can be held in compatible wallets and transferred using Bitcoin transactions. Inscriptions are as durable, immutable, secure, and decentralized as Bitcoin itself. Each Bitcoin is broken into 100,000,000 units called satoshis (or sats). Each sat has a serial number, 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).

When Casey Rodarmor created the Ordinal protocol, he was trying to improve what he considers to be a deficiency: NFTs (non-fungible tokens) such as ETH NFTs or Stacks NFTs, are enabled by smart contracts and generally point to off-chain data which is kept on IPFS (Interplanetary File System), where the data can be changed. As an example, a token image in a given NFT collection can be updated, and metadata can be refreshed on NFT marketplaces such as OpenSea and Gamma.io. With Ordinals, however, all the data is inscribed directly on-chain. They are intended to reflect what NFTs should be, sometimes are: true digital artifacts.

Bitcoin Ordinals Use Cases

Although Ethereum NFTs are the most popular, over the years, digital assets have spread to various blockchains including Stacks, Solana and more. Traditional NFTs use cases include digital collectibles, digital art, video games, virtual real estate, concert tickets, and even tweets.

NFTs can be semi-fungible or dynamic, which requires metadata changes. Semi-fungible tokens and dynamic NFTs are used in games, vouchers and coupons, tickets to events, etc. Ordinals simply aren't meant to evolve once inscribed: they are completely immutable, which makes them quite different from NFTs on the Ethereum blockchain.

Because Ordinals are a very new development in blockchain technology, can't be updated, and their size is limited by block space, they currently don't have as many use cases as NFTs. In early 2023, JPEG, HTML, SVG, JS, CSS, images, audio, and video could be inscribed. Compression and formats such as HTML and SVG allow meaningful inscriptions with sizes on par with normal bitcoin transactions, and the more the ordinals protocol is explored, the more new use cases and functionality will emerge.

Ready to inscribe your Ordinal?

With notable NFT collections such as Ordinal Punks and Cryptopunks joining the trend, it was only a matter of a few days before startups such as Gamma.io launched support for Ordinals.

Gamma, the largest Bitcoin NFT platform, provides an easy, low-cost way to inscribe Bitcoin Ordinal NFTs, as well as an Ordinal marketplace.

You will first need a Bitcoin Ordinal wallet with a taproot wallet address (BTC address). That wallet will need "coin control" capabilities, in order to avoid spending your Ordinal NFT satoshis on network fees. Ordinal wallets you can use with Gamma include Sparrow, Xverse and Leather wallet. You'll need cryptocurrency to fund your transaction, which you can buy on cryptocurrency exchanges such as Coinbase or Binance.

Once your taproot address is set up, the Gamma no-code tool allows you to inscribe your Ordinal NFTs in minutes as well as launch collection mints, and gives you the option to choose or customize transaction fees based on network congestion.

Related articles: