Unless you’ve been living under a rock, you’ve probably heard about ‘Ordinals’. Maybe your favorite influencer(s) keep shilling you to buy into the mysterious new fad or you’ve heard about it in passing from your various group chats.
You have tons of questions, but you’re finally ready to stop procrastinating and look into the new world of NFTs on the Bitcoin blockchain. With that being said: Look no further: this article has you covered.
The 1st question people usually ask: "How is it possible?"
There is a long answer, but nobody likes those. The short answer is that Bitcoin can be subdivided into 100,000,000 satoshis. A software engineer recently found a way to inscribe data onto each Satoshi of a Bitcoin, allowing for NFTs to be minted on the blockchain in a new way. These NFTs can even be transferred cross-chain (to Ethereum, for example).
These “NFTs' are called "Ordinals"... AKA "digital artifacts”. They are immutable, permissionless, uncensorable and "complete" in the sense that all of their data is stored on-chain (unlike many NFTs in their current state). According to Rodamar: digital artifacts ``reflect what NFTs should be" and "what inscriptions are."
What is a more technical description of digital artifacts? According to the Ordinals Doc:
"For a digital thing to be a digital artifact, it must be like that coin of yours:
- Digital artifacts can have owners. A number is not a digital artifact, because nobody can own it.
* Digital artifacts are complete. An NFT that points to off-chain content on IPFS or Arweave is incomplete, and thus not a digital artifacts. - Digital artifacts are permissionless. An NFT which cannot be sold without paying a royalty is not permissionless, and thus not a digital artifact.
* Digital artifacts are uncensorable. Perhaps you can change a database entry on a centralized ledger today, but maybe not tomorrow, and thus one cannot be a digital artifact. - Digital artifacts are immutable. An NFT with an upgrade key is not a digital artifact.
The definition of a digital artifact is intended to reflect what NFTs should be, sometimes are, and what inscriptions always are, by their very nature."
When it comes to Ordinals, inscriptions are the name of the game. Every Ordinal has an inscription number. The lower the number, the more rare/sought after the Ordinal is. BTC Punks minted on some of the first inscriptions of the network, making them historically significant and extremely rare. Traders are betting on the future of the Ordinals protocol and the number of inscriptions (Ordinals) scaling.
“Enough talk. How can I buy in?” Well, it would require a Bitcoin node, a Bitcoin wallet and some technical knowledge. Which brings up the next point:
There is WAY too much friction and information asymmetry at play here for your average degen. On top of this, Ordinals can currently only be traded OTC. As you may know, OTC trades are always risky.
This is a high risk, high reward opportunity. But opportunity aside, narratives within the Bitcoin community are shifting. Bitcoin maxis are finally embracing the idea of NFTs, thanks to Rodamar’s vision.
Long term, most people are probably just better off holding $BTC, rather than holding inscriptions. But the opportunity may pay off greatly. Remember to DYOR!
Source: Magic Eden