Get to know more about Ordinal Bitcoin NFT in this article. Understanding and how it works will be discussed in full here

What Are Bitcoin Ordinals?

Ordinals were introduced in January 2023 as a method to create Bitcoin NFTs by embedding information on each satoshi individually. This is accomplished through a process called "inscribing."

Previously, NFTs were mostly created and used on blockchains such as Ethereum, Solana, and BNB Chain. After realizing that non-fungible tokens could also have a place on the Bitcoin blockchain, the Ordinals project emerged.

The decentralized network of nodes and developers not wanting to compromise network security make changing Bitcoin's code difficult. However, the development of the crypto ecosystem is opening the door for innovative thinkers who see the creation of Bitcoin NFTs as part of the future of Web3 .

Ordinals' stable contribution makes it grow for various types of content, including images, audio and video.

How Ordinal Bitcoin NFTs Work

The Ordinals Protocol is a satoshi numbering system, giving each satoshi a serial number and tracking it through transactions. Ordinals allows users to make each satoshi unique by adding additional data to it. This process is known as "inscription."

Satoshi comes from the pseudonym of the creator of Bitcoin. One Satoshi is the smallest denomination of bitcoin (BTC). One BTC can be divided into 100,000,000 satoshis, which means each satoshi is worth 0.00000001 BTC.

Satoshis are numbered based on the order of mining and transfer. This numbering is determined by the order of mining of satoshis, while the order of transfer depends on the order of transaction input and output. 

Therefore, the term "ordinals" originates from this numbering system. The first satoshi in the first block has an ordinal number of 0, followed by the second with an ordinal number of 1, and so on. According to ordinal theory, this ordinal number acts as a stable identifier for the data attached to sat.

Although traditional NFTs are similar to ordinals in some ways, there are some key differences. NFTs are typically created using smart contracts on blockchains such as Ethereum, Solana, and BNB Chain, and sometimes, the assets they represent are hosted elsewhere.

Instead, ordinals are recorded directly on each satoshi, which is then included in Bitcoin's blockchain blocks. Ordinals resides entirely on the blockchain and does not require a separate sidechain or token. In this way, ordinal inscription inherits the simplicity, immutability, security, and durability of Bitcoin itself.

Pros and Cons of Bitcoin NFT Ordinals

Some believe that Bitcoin's relative simplicity in its limitations for storing and transferring value should be preserved. On the other hand, there are those who believe that Bitcoin should evolve to include new features and uses.

Engraved satoshis now compete for block space with regular BTC transactions, increasing network fees. This has caused controversy in the Bitcoin community, but some supporters of Ordinals argue that this could be a positive because fees are an important incentive for miners to secure the blockchain.

In the future, as block rewards decrease over time, network fees will become the main incentive to allocate hash power to Bitcoin. Despite these clear differences of opinion, the Ordinals project has certainly brought innovation to the Bitcoin space.

How to Create Bitcoin NFTs

The Ordinals ecosystem is still in its infancy, and creating ordinal NFTs is still difficult and may require technical knowledge. For example, there is no NFT marketplace that allows users to create them easily.

One way to create a Bitcoin NFT involves several technical steps, such as creating and running a full Bitcoin node and installing a Taproot-compatible wallet on the node before embedding satoshis into the wallet. Another method may be simpler as it involves using no-code tools to embed ordinal NFTs.

Make sure to choose a wallet that has a “coin control” feature to avoid spending Ordinal satoshis on network fees or accidentally sending them in other transactions. Those wishing to embed Ordinal should also have enough bitcoin to cover transaction fees.

That's all the understanding, how it works and the pros and cons of Original Bitcoin NFT. Understand how and start creating Bitcoin NFTs.

Also read:

NFT Bitcoin Ordinals "Genesis Cat" Sells for IDR 3.9 Billion at Sotheby's Auction

What Are Rats (Ordinals)? How it Works, Uses, and Tokenomics

SATS (Ordinals): What Is It and How Does It Work?

DISCLAIMER : This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.