Bitcoin NFTs Are Here! Here's What You Need to Know
December 26, 2023 (Investorideas.com Newswire) Blockchain has brought us some game-changing technologies in the last ten years. From secure finance to Web 3.0 and NFTs, it's changed how we do things online. Bitcoin has been a big player in these changes. It has been leading the way in crypto and bringing decentralized finance to the forefront.
Now, there's something new in the Bitcoin world called Bitcoin Ordinal NFTs. They are a kind of digital artifact created by inscribing information onto the Bitcoin blockchain forever. This article will discuss what Bitcoin ordinals are, why they matter, and what they could mean for the future.
What are Bitcoin Ordinal NFTs?
Bitcoin Ordinals is a software that lets you attach/inscribe information to the smallest parts of a Bitcoin, called satoshis. There are 100,000,000 satoshis in one Bitcoin. This turns normal bitcoins/satoshis into unique digital items known as non-fungible tokens (NFTs) directly on the Bitcoin system. People also call them Ordinal NFTs.
Before, all bitcoins were the same, and you couldn't tell one tiny part from another. However, Rodarmor, a Bitcoin developer changed that by coming up with the Ordinal Theory of numbering on Bitcoin using two updates to the original Bitcoin system: Segregated Witness (SegWit) and Taproot.
Taproot brought in a new way of writing down Bitcoin addresses that Bitcoin Ordinals use to find specific satoshis.
Segregated Witness made a cool change by splitting witness information from transaction data. This made Bitcoin's storage bigger and allowed users to add pictures and videos to the data along with other types of data.
A Brief History of NFTs on Bitcoin
The idea of NFTs on Bitcoin goes back to 2012 with the Colored Coins protocol. These are special bitcoins marked differently from regular ones, like the early version of NFTs on the Bitcoin network.
But now, Bitcoin NFTs are getting more popular. The Ordinals protocol, launched in January 2023, made a big change by letting people create NFTs directly on the Bitcoin blockchain.
How do Bitcoin NFTs work?
The Ordinals system gives each tiny unit of Bitcoin, called a satoshi, a special number to track it in transactions. You can think of it as a serial number for your digital money. You can do this by adding extra information to the satoshis by a process called "inscription."
A satoshi is the smallest part of Bitcoin. There are 100,000,000 satoshis in one Bitcoin, and each satoshi is tiny and valued at 0.00000001 BTC.
The numbering of satoshis depends on when they were created and moved around. Thus, Ordinals use the order they were created, and transfers use the order in which they move in transactions. The first satoshi in the first block gets the number 0, the next one gets 1, and so on. These numbers stay the same and help identify the satoshis.
Now, compared to other digital collectibles like NFTs, there's a difference. NFTs often use special contracts on different blockchains, but ordinals are put directly onto satoshis in the Bitcoin blockchain. And, you don't need extra stuff like a separate token or another chain. This simple process makes ordinals simple, safe, just like Bitcoin itself.
How to Mint Bitcoin Ordinals
Making NFTs on Bitcoin was not possible as compared to other blockchains like Ethereum. That's because Bitcoin had limited abilities for smart contracts and doesn't have a set standard for NFTs like Ethereum's ERC-721.
Now, you can create Bitcoin ordinals through a process like mining, minting, or inscribing. There are user-friendly apps like Gamma, Xverse or Ordinals Bot which let you upload content, make a payment with a QR code, and inscribe Bitcoin ordinals without hassle.
But, Bitcoin ordinal tools are still in the early stages. It's only been a few months since the first ordinals were made. As more people get into it, you can expect easier tools in the near future for a smoother experience.
Why Are Bitcoin NFTs becoming more popular?
Bitcoin NFTs have become popular. Just a few weeks after starting, there were hundreds of thousands of Bitcoin NFTs on the blockchain, and that number keeps going up.
People like Bitcoin NFTs as they bring more functionality to an already-trustworthy network. Ordinals use something called Partially Signed Bitcoin Transaction (PSBT) tech, which is secure and trustworthy.
How to Trade, Buy, and Sell Bitcoin NFTs
You can buy, sell, and trade Bitcoin Ordinals like regular NFTs. But you only have to use wallets that work with Taproot, such as the Xverse Ordinals Wallet. And, keep in mind that NFT markets are not regulated and can have scams, so be careful when trading Bitcoin NFTs.
Trading Bitcoin NFTs might sound a bit tricky, but it's actually quite simple. You can either do it on special Bitcoin Ordinals Discord servers (a bit riskier) or on marketplaces like Generative.xyz, Gamma.io, and Magic Eden.
Magic Eden is a new marketplace for Bitcoin Ordinals that started on March 22, 2023, when Bitcoin NFTs became really popular. If you want to trade on Magic Eden, just connect your wallet and check out the different Bitcoin NFT collections.
How Bitcoin Ordinals are different from NFTs
Bitcoin Ordinals and traditional NFTs differ mainly in how they store data. Most NFTs on other crypto networks only have metadata or a link to off-chain data. But Ordinals put content directly on the blockchain using inscriptions, which makes them more decentralized and censorship-resistant. However, it makes the Ordinals pricier and limits their size.
Another major difference you will see between Bitcoin Ordinals and other NFTs is how they decide rarity and value. Traditional NFTs look at artwork or supply scarcity. However, Ordinals might also consider key moments in Bitcoin's history tied to specific satoshis. For example, an Ordinal from a new block, adjustment period, or halving epoch could be seen as rarer and more valuable.
One more difference is that adding these NFTs to their blockchains varies. Bitcoin Ordinals use Proof of Work (PoW) in mining, contributing to Bitcoin's energy needs. On the other hand, NFTs on chains with Proof of Stake (PoS) use less energy and process transactions faster.
Final Thoughts
Developer Casey Rodarmor introduced Ordinals NFTs on Bitcoin in January 2023, and it has impacted the Bitcoin landscape so far. Minting and owning a Bitcoin NFT is a relatively easy process that allows you to inscribe whatever you’d like on the most famous blockchain in existence.
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