Crypto is moving at an unprecedented pace. Programmer and generative artist Casey Rodamor has taken the space by storm with his recent NFT innovation, Ordinals.
Ordinals released in January provide a method for representing non-fungible assets on Bitcoin (CRYPTO: BTC) blockchain. However, the release was not met with universal praise. There has been major backlash from BTC purists who claim this is a “wrong” use of the network.
Let’s examine the dynamics and value of this emerging technology and whether Ordinals will appear on your favorite NFT marketplace.
How do ordinals work?
NFTs are primarily traded on blockchains with smart contract functionality. Given that Bitcoin does not support smart contracts, bringing NFTs to the chain has been a significant challenge.
Rodamor’s team has achieved this by adding metadata to the lowest denomination of a Bitcoin: a satoshi (sat). For context, BTC can be divided into 100,000,000 rates.
Over 165,000 Ordinals have been entered since launch.
Investors buy up Bitcoin NFTs
Anyone can enter metadata on a sat by downloading Bitcoin Core. First, the node must be synchronized to the network. Once this is completed, users can create an Ordinals Wallet and deposit some satoshis.
Although usable, the design is incredibly technical. However, this is to be expected with any new blockchain technology. Fortunately, a number of developers have flocked to Ordinals in an effort to improve the protocol’s mechanics and accessibility.
Hiro Wallet, a self-storage wallet for Bitcoin, recently added support for Ordinals. The wallet uses Stacks, a smart contract layer on Bitcoin. With Hiro, users can enter and collect Ordinals with no coding involved.
Another protocol, Gamma, has built a full-scale NFT marketplace for Ordinals. Gamma’s platform supports both Ethereum and Stacks wallets, making trading Ordinals easier than ever. The site has a rich feature set including bulk captions, metadata optimization and more.
Do We Really Need Bitcoin NFTs?
Bitcoin maximalists on social media might dismiss Ordinals as a corruption of BTC’s utility. However, Ordinals actually provide increased utility for Bitcoin. This is especially important considering that BTC’s narrative as an inflation hedge was displaced with 2022’s move.
It is important to understand that there are important differences between traditional NFTs and Ordinals. The most prominent contrast lies in the ability to change metadata once an NFT has been minted.
Current NFT metadata is typically hosted off-chain on the Interplanetary File System (IPFS). This means that an NFT collection’s metadata can be changed at any time, regardless of file format.
Conversely, once entered, Ordinals cannot be changed by anyone. This makes them immutable, in the true spirit of blockchain. Rodamor makes this distinction by calling inscriptions digital artifacts, since they remain unchanged on the blockchain forever.
Continuation of NFT innovation
The idea that Ordinals is simply a cash-grab is superficial at best.
It may be true that we cannot predict how long Ordinals will remain popular, or which NFT projects will succeed on Bitcoin. However, there is no doubt that Ordinals have ignited a wildfire of development for both the Bitcoin and NFT markets.
It’s also worth noting that the SEC is cracking down on digital assets with force. Specifically, the commission has shut down betting services and targeted fungible tokens as securities.
Bitcoin is the only network that has proven that it is not a security beyond a shadow of a doubt. Introducing NFTs to Bitcoin increases access and drives further adoption, underpinned by the most decentralized blockchain in existence.
New innovation in any industry requires wading through the jungle of bureaucracy. It’s exciting to know that regardless of market conditions, developers continue to clear the way towards a truly decentralized future.
Here’s to the builders who work tirelessly to move blockchain forward, regardless of opposition.
