On December 14, 2022, Ordinals signups have caused quite a stir in the Web3 ecosystem. These new types of NFTs, designed by developer Casey Rodarmour, are registered directly on the Bitcoin blockchain. Some welcome this revolution with open arms, while others see it as defeating the purpose of Bitcoin. In this article, we will tell you everything you need to know about Bitcoin ordinals.
Bitcoin Ordinals: what are they?
Simply put, the Ordinals protocol allows data to be permanently and permanently written to the Bitcoin blockchain. It works like in the cloud, but everything is decentralized and transparent.
Behind this invention is Casey Rodarmore, a former developer of Bitcoin Core. It was on Twitter that he announced the completion of the Ordinals protocol on January 20, 2023, just over a month after the first listing on the Bitcoin mainnet.
Registration is finally ready for the main Bitcoin network.
Labels are similar to NFTs, but are true digital artifacts: decentralized, immutable, always on-chain, and native to Bitcoin. 🧵https://t.co/a4dK7zdITS
— Casey Rodarmor (@rodarmor) January 20, 2023
That’s all well and good, but how does it work? As you probably know, each bitcoin is divided into 100 million units called satoshi (or sats). It is these satoshis that are used as supports for inscriptions on ordinals.
As with NFTs (non-fungible tokens), registering on Ordinals allows you to store images, text, audio clips, as well as security tokens, stablecoins, smart contracts, etc. For fun, a user named Nicholas Carlini went so far as to upload on the Bitcoin blockchain is another clone of the Doom video game that has already experienced every possible and conceivable media.
It should be noted that this innovation became possible after two updates to the Bitcoin blockchain: SegWit in 2017 and Taproot in 2021. Indeed, they have made it possible to quadruple the block size to 4 megabytes, and thus they allow data to be transferred. registered with Ordinals for placement.
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Listings are digital artifacts, not NFTs.
Listings on Ordinals are commonly referred to as NFTs registered on the Bitcoin blockchain. But in fact, they are very different from non-fungible tokens issued on other protocols such as Ethereum or Solana.
When he explains his creation in his Manuel de la Théorie Ordinale (Handbook of Order Theory in the original version), Casey Rodarmour insists on a distinction between what he calls digital artifacts and classical NFTs.
We have compiled for you the main differences noted by Casey Rodarmore between digital artifacts and NFTs. They allow you to clearly define the characteristics of registrations for ordinals:
- He insists that the digital artifacts are complete. Unlike NFTs, which link almost systematically to content hosted on IPFS or Arweave, registrations on Ordinals are stored directly on the blocks of the Bitcoin blockchain.
- He points out that NFTs cannot be traded for free (no fees or royalties paid) and can be upgraded, unlike bitcoin ordinals which are permissionless and immutable.
Concluding his presentation, Casey Rodarmore laments that NFTs are not true digital artifacts, unlike Ordinals registrations:
“The definition of a digital artifact is intended to reflect what NFTs should be, sometimes are, and always are, by their very nature, inscriptions. »
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A revolution that divides the bitcoin community
As with almost all other innovations, the Bitcoin community has been divided over signups for Ordinals. Among the most vocal critics are those who view these digital artifacts as an attack on the Bitcoin network, such as historical Bitcoin developer Luke Dasjer, who denounces the method used by Casey Rodarmore.
We can have NFTs and bitcoin collectibles without spamming or attacking the network.
Taproot actually makes it even easier; “tapscript” can be a new type that refers to a torrent magnet rather than a script, and spending on the chain doesn’t require any data to be added.
— Luke Dashjr (@LukeDashjr) February 3, 2023
In general, many users believe that Bitcoin was not created to store digital artifacts.
True to the good word of their progenitor Satoshi Nakamoto, who declared in 2010 that bitcoin cannot be used except for financial purposes, they believe that bitcoin can have no other role than that of a cryptocurrency.
Another problem is pointed out: the inscriptions on ordinals cast doubt on the interchangeability of satoshi, which can be perceived as more or less valuable depending on the data they contain.
Other skeptics make more compelling arguments about how the Bitcoin blockchain works. They point to the fact that listings on Ordinals can crowd out blocks to the detriment of traditional transactions. They also fear the increase in Bitcoin fees that this innovation will inevitably bring.
According to a report published by Glassnode, this increase has already been seen since the launch of Ordinals at the end of January, but for now it remains limited. Finally, some are concerned that this innovation could open the door for malware attacks on the Bitcoin blockchain.
If some voices are offended by the appearance of inscriptions on ordinals, others welcome these digital artifacts with open arms. This is especially the case for bitcoin maximalist Dan Held, who demonstrated his support for the Ordinals protocol by discovering an email from legend Hal Finney that contradicted Satoshi Nakamoto’s opinion.
Over 30 years ago, this Bitcoin pioneer was already talking about the possibility of selling and buying crypto trading cards, which suggests that he would probably be a fan of Casey Rodarmore’s creation.
Hal Finney would like to have a bitcoin NFT. pic.twitter.com/z4cO468pcA
— Dan Held (@danheld) February 6, 2023
Among other positive feedback from members of the bitcoin community, many applaud the increase in fees brought about by listing on Ordinals.
The reason is simple: the miners who secure the blockchain are paid more and therefore have more incentive to work towards the proper functioning of Bitcoin. This is a strong argument when you consider that halvings halve the reward every 4 years.
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The most notable collections on Ordinals at the moment
The creation of Casey Rodarmor had some success. At the time of this writing (February 2023), there are approximately 175,000 registrations on Ordinals. This is proof that this new tool has found its audience despite the criticism.
Some collections of digital artifacts have already been highlighted since the launch of the Ordinals protocol. While some are heavily inspired by the NFTs found on Ethereum, others are original creations. We have collected for you the most notable projects to date:
- Ordinal punks: this tribute to the major CryptoPunks brings together 100 registrations from the first 650 protocol Ordinals. One of these Ordinal Punk was sold on February 8, 2023 for 9.5 BTC, which was over $220,000 at the time of the sale.
- Taproot Masters: these designs, created by independent developer Udi Wertheimer, caused a stir when the collection’s first listing resulted in the largest block and largest transaction in Bitcoin history.
- Bitcoin rock: Inspired by one of the very first NFT collections on Ethereum, EtherRocks, this project includes 100 digital artifacts.
- Ordinal cycles: Starting with entry 452, ordinal cycles are part of the pioneering collections of the ordinal protocol. They use the text format to create art that pays homage to Bitcoin and the emergence of a new, more inclusive monetary system.
Very technical at first and reserved for bitcoin node operators, registration on Ordinals is democratizing at high speed.
Now they are available to everyone, and we see new collections of bitcoin digital artifacts appearing every day. And obviously this new phenomenon is not going to stop there… On February 19, developer Anthony Guerrera ported the Ordinals protocol to the Litecoin blockchain, which he believes is better suited for these digital artifacts (lower costs, bulkier blocks). and the ability to use anonymous transactions).
Ordinals are popular in early 2023, but it remains to be seen if they will manage to prove themselves over time and achieve the same success as NFTs deployed on other blockchains. One thing is for sure, they leave no one indifferent in the Bitcoin and Web3 ecosystem.
👉 To delve into bitcoin ordinals and their implications for the cryptocurrency queen, check out our interview with Fanis Michalakis, developer at LN Markets.
Sources: NFT Now, Glassnode, Les Echos.
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