Bitcoin Ordinals (Ordinal NFTs)
Bitcoin Ordinals is a protocol that allows assigning a unique identifier and trading with additional data attached to each satoshi (SAT) in a Bitcoin blockchain. (A satoshi is the smallest unit of the Bitcoin currency, and there are 100,000,000 satoshis in a single Bitcoin.) The protocol, attributed to Casey Rodarmor, effectively allows the creation of non-fungible tokens (NFTs) directly on a Bitcoin blockchain . NFT Bitcoin Tokens may also be referred to as Ordinal NFT.
Until recently, Bitcoin was considered fungible (interchangeable) and one satoshi on one blockchain could not be differentiated from another. Rodarmor's protocol changed this by taking advantage of two updates to the original Bitcoin protocol: Segregated Witness (SegWit) and Taproot.
Taproot has introduced a new Bitcoin address format, which the Bitcoin Ordinals protocol uses to identify specific satoshis.
The Segregated Witness update made it possible to separate witness information (also known as witness scripts) from transaction data and store it in a separate data structure on the blockchain. This change increased the Bitcoin block size and made it possible to record image and video data in the witness script, along with digital signatures and other validation information.
Ordinal NFTs
NFTs (non-fungible tokens) are unique digital assets that are authenticated on a blockchain to protect the creator's intellectual property.
NFTs on the Ethereum or Solana blockchains can only reference metadata documenting the ownership and authenticity of a specific digital asset. The metadata itself is stored off the blockchain in a separate file.
Instead, Ordinal NFTs can also store the digital asset itself inside the blockchain transaction's witness data.
To create an Ordinal NFT, the user must first send an Ordinal SAT to a Taproot compatible wallet and include (enroll) data and metadata as part of the transaction. Once mined, the inscription is permanently etched on the first satoshi of the initial transaction output.
The initial process requires using a Bitcoin node, synchronizing the entire Bitcoin blockchain, and using command-line interfaces – all of which can be daunting tasks for non-technical users. With the advent of codeless ordinal mining apps, even less technical users can upload content for inscriptions and create Ordinal NFTs.
controversies
Bitcoin Ordinals
has sparked much debate in the crypto community. Critics argue that SATs written in Ordinals use block space inefficiently and will ultimately lead to higher Bitcoin transaction fees and slower transaction times for all network users. But proponents of Bitcoin Ordinals are interested in how the protocol can be used to expand Bitcoin's use beyond financial transactions. In addition to creating Ordinal NFTs, for example, the protocol could potentially be used to attach ordinal satoshi to individual security tokens or stablecoins, enable Bitcoin smart contracts, and introduce the cryptocurrency to a wider audience. large.
