Ordinals are Bitcoin’s version of digital collectibles, launched in 2023 by Casey Rodarmor. They work by assigning unique ID numbers to individual satoshis (the smallest unit of Bitcoin) and allow users to attach digital content like images, text, or videos. Through recent Bitcoin network updates, Ordinals enable direct creation of digital assets without additional blockchain layers. While some view them as controversial, they’ve sparked new developments in Bitcoin’s ecosystem that expand its capabilities.
Quick Overview
- Ordinals are unique identifiers assigned to individual satoshis on Bitcoin’s network, allowing digital assets to be attached and traded.
- Launched in January 2023, Ordinals enable users to inscribe data like images, text, or videos directly onto Bitcoin’s blockchain.
- They function similarly to NFTs but are native to Bitcoin’s network, requiring no additional layers or separate blockchains.
- Ordinals utilize Bitcoin’s SegWit and Taproot updates to store data, with capacity up to 4MB per transaction.
- Users need a full Bitcoin node and Taproot-compatible wallet to create, store, or transfer Ordinal inscriptions.
The cryptocurrency world saw a major innovation in January 2023 with the launch of Ordinals on Bitcoin’s network. Created by Casey Rodarmor, Ordinals are unique identifiers given to individual satoshis, which are the smallest units of Bitcoin. This system lets users attach different types of data, like text, images, or videos, to these satoshis, creating unique digital items that can be collected and traded.
What makes Ordinals possible are two important updates to Bitcoin’s network: SegWit in 2017 and Taproot in 2021. SegWit added a special section for extra data in Bitcoin transactions, while Taproot increased how much data could be stored to 4 MB per transaction. To use Ordinals, people need to run a full Bitcoin node and have a special wallet that works with Taproot. The recently launched Runes Protocol expands Bitcoin’s capabilities by enabling fungible token management through UTXOs.
Ordinals work differently from traditional NFTs that you might find on other blockchains. They’re built directly into Bitcoin’s network, unlike other solutions that add extra layers on top. While they can create items similar to NFTs, Bitcoin doesn’t officially recognize them in that manner. The serial numbering system assigns unique identifiers to each satoshi based on when it was mined. The process of making Ordinals is more complicated than making NFTs on networks like Ethereum, and they don’t have built-in features for things like automatic royalties.
The introduction of Ordinals has led to some interesting developments in the Bitcoin ecosystem. They’ve made it possible to create Bitcoin-based NFTs, known as ordinal NFTs, and have sparked the creation of a new token standard called BRC-20 for making tradeable tokens. The digital inscriptions provide a secure way to store and transfer unique assets on the Bitcoin blockchain. Some investment firms, like Bitwise, have even started contributing to Bitcoin ETF wallets because of Ordinals.
Not everyone in the Bitcoin community is happy about Ordinals, though. They’ve sparked quite a debate about what Bitcoin should be used for. Some people think Bitcoin should stick to being digital money, while others believe it’s okay to use it for storing different types of data. Despite the controversy, Ordinals represent an important technical achievement in Bitcoin’s evolution.
Using Ordinals requires technical knowledge since users need to operate specific software and understand how Bitcoin transactions work. The system is built to work with existing Bitcoin rules, so it doesn’t need any special changes to the network. While it’s more complex than other digital asset systems, it’s become an important part of Bitcoin’s growing capabilities for creating and trading digital items.
Frequently Asked Questions
How Do I Sell My Bitcoin Ordinals for Profit?
Selling Bitcoin Ordinals for profit involves choosing a marketplace like Magic Eden, Unisat, or OKX.
Traders first need a compatible digital wallet that works with their chosen platform. They’ll need to list their Ordinals at competitive prices based on current market trends.
Many sellers watch trading volumes and Bitcoin network activity to time their sales. Transaction fees and market conditions can affect potential profits.
Can Ordinals Be Created on Other Blockchains Besides Bitcoin?
Yes, Ordinals can exist on other blockchains besides Bitcoin.
Litecoin was the first to adopt them in February 2023, and Dogecoin’s community is working on something similar.
Ethereum has an experimental version that uses smart contracts.
However, each blockchain handles Ordinals differently due to their unique architecture.
While Bitcoin’s Ordinals are the most well-known, other networks are adapting the concept to fit their specific systems.
What Happens to Ordinals if Bitcoin Undergoes a Hard Fork?
When Bitcoin has a hard fork, existing Ordinals will likely stay on the original chain, but they might also get copied to the new chain.
This means owners could end up with Ordinals on both chains. The value and recognition of these Ordinals might become unclear during this split.
The new chain could choose to either support or reject Ordinals completely.
Technical issues, like wallet compatibility, will need to be sorted out.
Are Ordinals Susceptible to Hacks or Security Vulnerabilities?
Ordinals face several potential security risks.
They’re vulnerable to hackers who might exploit Bitcoin Core versions through 26.0. There’s also concern about network congestion when too much data gets stored on the blockchain.
However, once inscribed, Ordinals can’t be modified or deleted, which provides strong security. They benefit from Bitcoin’s established security features, though experts continue to debate whether they pose risks to Bitcoin’s overall network performance.
Which Wallets Currently Support Bitcoin Ordinals Trading and Storage?
Several popular wallets support Bitcoin Ordinals trading and storage. The main ones include Xverse, Ordinals Wallet, Leather Bitcoin Wallet, Hiro Wallet, and UniSat Wallet.
These wallets let users store, send, and receive Ordinals inscriptions. They’re mostly non-custodial, which means users have full control of their assets.
Most offer browser extensions and integrate with Ordinals marketplaces. They also support BRC-20 tokens and include security features like encryption.
