What Are Bitcoin NFTs? A Beginner's Guide to Ordinals protocol

What Are Bitcoin NFTs? A Beginner's Guide to Ordinals protocol

In simpler terms, think of 'ordinals' in math as a way of putting things in order, like first, second, third, and so on. Bitcoin has something similar called the Ordinals protocol, which is a new feature that lets people store unique digital items, like images or texts, directly on the Bitcoin blockchain. It's like marking each tiny part of a Bitcoin (called a satoshi) with a special note or image that makes it unique, kind of like how people collect special edition coins or stamps.

This cool ability to add these unique marks to Bitcoin parts became possible because of some updates to the Bitcoin system. One big update in 2021, called the Taproot upgrade, and another in 2017, known as the SegWit update, changed how Bitcoin transactions work and how much space each Bitcoin 'block' (a kind of digital ledger page) has. Thanks to these updates, each Bitcoin block can now hold up to 4 megabytes of data, which means there's more room to store these unique digital marks or collectibles, similar to those digital art pieces known as NFTs.

What are Bitcoin NFTs?

Ordinal NFTs, also known as Bitcoin ordinals or digital artifacts, represent a significant innovation in the Bitcoin blockchain, allowing the inscription of digital content like art, text, or videos directly onto individual satoshis. This groundbreaking concept was introduced by developer Casey Rodarmor and officially launched on the Bitcoin mainnet on January 20, 2023.

Unlike traditional non-fungible tokens (NFTs) on Ethereum and other blockchains, Bitcoin ordinals feature a unique architecture. They are not based on separate layers like previous Bitcoin-based NFTs enabled by networks such as Counterparty and Stacks. Instead, they are entirely native to the Bitcoin blockchain. This is achieved through ordinal theory, which assigns a unique identity to each satoshi, the smallest unit of Bitcoin, allowing them to be tracked and imbued with meaning. This approach does not require any changes to the Bitcoin protocol and is backward compatible with the network.

Since their inception, ordinal NFTs have seen substantial growth, with over 200,000 pieces minted, attracting a diverse community of users, developers, and enthusiasts. The genesis of this movement can be traced back to a pixel art of a skull inscribed by Rodarmor on December 14, 2022, marking the beginning of what would become a significant trend in the Bitcoin ecosystem.

The implementation of ordinal NFTs became feasible due to key updates to the Bitcoin protocol, particularly the Segregated Witness (SegWit) and Taproot updates in 2017 and 2021, respectively. These updates expanded the amount of data that could be stored within a block, inadvertently paving the way for ordinal NFTs. SegWit, for instance, introduced a separate section for witness data in Bitcoin transactions, allowing for the transmission of arbitrary data within the block's limits. The Taproot update further enhanced this capability by easing the storage of arbitrary witness data, crucial for the development of ordinal NFTs.

Ordinal NFTs operate by utilizing an ordering system for satoshis, creating a non-fungible property essential for NFTs. The inscriptions refer to the actual content of the NFT, such as images or videos, embedded into individual satoshis. This method of creating NFTs differs fundamentally from Ethereum NFTs, which are distinguished by a unique tokenID and separate metadata. In contrast, Bitcoin ordinal inscriptions are integral to the transaction's witness data, blurring the lines between fungible and non-fungible tokens within the Bitcoin framework.

The emergence of Bitcoin ordinals has not only expanded the utility of the Bitcoin blockchain but also sparked debates within the community. While some view this development as a natural evolution of Bitcoin's capabilities, others express concerns about its impact on the network's efficiency and transaction fees. Despite differing opinions, the presence of ordinal NFTs marks a notable shift in the Bitcoin narrative, moving it from a pure store of value to a platform for a more diverse range of applications.

What differentiates Bitcoin ordinals from ordinary numbers?

Purpose and Functionality:

  • Bitcoin Ordinals: These are specific to the Bitcoin blockchain, serving to maintain and identify the chronological order of transactions. Each transaction receives a unique ordinal, marking its sequential position within the blockchain.
  • Regular Numbers: Used broadly in various fields like mathematics, science, and daily activities, regular numbers aren't designed for tracking transactions or any blockchain-specific functions.

Uniqueness and Repetition:

  • Bitcoin Ordinals: Every ordinal is exclusive within the blockchain, ensuring that each transaction is distinct and easily identifiable.
  • Regular Numbers: These can be repetitive and are used in numerous contexts, with the same number appearing in different situations without any conflict.

Immutability and Flexibility:

  • Bitcoin Ordinals: Ordinals are immutable; once assigned to a transaction, they cannot be altered, safeguarding the transaction history's integrity.
  • Regular Numbers: They lack inherent immutability and can be changed or reused in various contexts.

Role in Consensus and Verification:

  • Bitcoin Ordinals: They are integral to the consensus mechanism within the Bitcoin network, helping to verify the order and validity of transactions, thus upholding the network’s security and functionality.
  • Regular Numbers: They don’t play a role in network consensus or transaction verification processes.

Contribution to Blockchain Security:

  • Bitcoin Ordinals: By ensuring a transparent and tamper-resistant transaction order, ordinals bolster the overall security and trustworthiness of the Bitcoin blockchain.
  • Regular Numbers: They do not possess qualities that enhance security or verifiability in a blockchain context.

Scope of Application:

  • Bitcoin Ordinals: Their use is confined to the Bitcoin blockchain, where they are essential for tracking and organizing transactions within the cryptocurrency ecosystem.
  • Regular Numbers: They have a vast range of applications across numerous domains, including but not limited to, calculations, measurements, and financial transactions.

Furthermore, the introduction of Bitcoin ordinals represents a significant advancement in the blockchain world, adding a layer of functionality and security unique to the Bitcoin ecosystem. As blockchain technology continues to evolve, the role and application of Bitcoin ordinals may expand, further distinguishing them from regular numerical systems.

How to mine Bitcoin ordinals?

The creation of Bitcoin ordinals, often referred to as mining, minting, or inscribing, is a process distinct from minting NFTs on the Ethereum blockchain. While Ethereum's method is more established and user-friendly, the process for Bitcoin ordinals is technically more complex and initially lacked straightforward tools.

In the early stages, creating Bitcoin ordinals was primarily accessible to those with technical expertise, specifically those operating a Bitcoin node. Enthusiasts equipped with a Bitcoin node and the ord app, a command-line wallet, were able to mine ordinals. This process involved loading their wallets with Bitcoin satoshis (sats) to cover the transaction fees, followed by the technical inscribing process.

Recently, the emergence of no-code solutions like Gamma and Ordinals Bot has started to democratize the process, making it more accessible to a broader audience. These applications allow users to upload the content they wish to inscribe onto a Bitcoin satoshi, thus creating their own Bitcoin ordinal. The user experience is streamlined, typically involving a simple payment process via a QR code, making it feasible for those without deep technical knowledge.

The infrastructure supporting Bitcoin ordinals is still in its infancy, having only been a few months since the first ordinals were inscribed. However, as interest from the general public grows, we can expect to see the ecosystem evolve, with a focus on developing more user-friendly tools and platforms. This progression will likely encourage wider participation and experimentation within the Bitcoin ordinals space, potentially leading to innovative uses and applications of this new blockchain feature.

Bitcoin NFTs vs. traditional NFTs

From a technical standpoint, Bitcoin ordinals diverge significantly from conventional NFTs, particularly in how they are valued. One of the key distinctions of Bitcoin ordinals is their ability to uniquely identify each satoshi (the smallest unit of Bitcoin) and store content or artwork directly on the blockchain. This contrasts with Ethereum's ERC-721 standard for NFTs, where typically, the metadata or a link to the art is stored off-chain, although some Ethereum NFTs are beginning to explore on-chain storage.

The rarity and pricing mechanisms for Bitcoin ordinals also set them apart from traditional Ethereum-based NFTs. In the Ethereum ecosystem, the rarity and value of an NFT are often determined by the unique attributes of the art piece. For instance, the Ethereum Name Service (ENS) derives value from its limited supply. In contrast, the value of Bitcoin ordinals hinges on the significance of specific Bitcoin blocks. Collectors might highly value the first 1,000 or 10,000 ordinals, and the very first Bitcoin ordinal could potentially fetch millions in the future. The rarity of a particular satoshi is therefore linked to its historical and chronological significance within the Bitcoin blockchain.

The founders of Bitcoin ordinals have proposed a framework where key blockchain events dictate the rarity of a satoshi. For example, the first satoshi in each new block is considered rarer than the others, and the first satoshi of a two-week adjustment period is even more scarce. With the next Bitcoin halving expected in 2024, the first satoshi of each halving epoch is set to gain additional rarity. Moreover, the first satoshi of the adjustment period occurring every six halvings (roughly every 24 years) represents a unique level of rarity.

This system of ascribing rarity based on blockchain milestones differentiates Bitcoin ordinals from traditional NFTs, where rarity is often controlled by the creators or artists. The randomness and decentralization in determining rarity could be a key factor driving the surge in interest around Bitcoin ordinals. As the 2024 Bitcoin halving approaches, it will be fascinating to observe how this influences the activity and valuation within the Bitcoin ordinals space.

Pros and cons of bitcoin ordinals and inscriptions

Bitcoin ordinals and inscriptions have sparked a debate within the cryptocurrency community, highlighting both potential advantages and disadvantages.


  • Distraction from Bitcoin’s Original Purpose: Critics argue that Bitcoin was envisioned as a tool for creating a decentralized financial system accessible to everyone. The introduction of digital collectibles and data storage, they contend, diverts from this serious purpose and could dilute Bitcoin's fundamental message.
  • Network Congestion and Increased Fees: The growing number of transactions involving ordinals and artifacts has occasionally led to network congestion. This increase in traffic can result in higher transaction fees and slower processing times, potentially undermining Bitcoin's effectiveness as a financial system.


  • Enhanced Security for Data Storage: Supporters of Bitcoin ordinals tout the blockchain's unparalleled security and decentralization. With millions of independent computers globally verifying and updating the network, data inscribed on the Bitcoin blockchain is virtually immutable, making it a robust platform for storing a wide array of information, not limited to financial transactions.
  • Attracting New Users: Ordinals and inscriptions could broaden Bitcoin's appeal beyond those interested in its financial aspects. Digital collectibles might attract a new user base, expanding the network’s reach and influence.
  • Benefits to Miners and Network Security: Higher transaction fees, while seen as a disadvantage by some, actually benefit miners by increasing their revenue. This, in turn, could bolster the network's security by incentivizing more miners to maintain and update the blockchain efficiently.

Looking forward, the debate over Bitcoin ordinals and inscriptions reflects the evolving nature of the cryptocurrency space. While challenges like increased fees and processing times are acknowledged, many believe these issues will be addressed as the technology matures. The potential for Bitcoin ordinals to secure a diverse range of data, coupled with the opportunity to attract new audiences to the blockchain, presents an intriguing expansion of Bitcoin's capabilities. As the community navigates these developments, the balance between preserving Bitcoin's original vision and embracing innovation remains a key consideration.

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