Ordinals

What are Ordinals

Ordinals is a new protocol that allows non-fungible tokens to be stored on the Bitcoin blockchain.

Roughly speaking, Ordinals are NFTs that you can mint right on the Bitcoin blockchain. Following this review, we will learn everything we need to know about what is Ordinals.

Who Created Ordinals

The creator of Ordinals is Casey Rodarmor. He is a longtime Bitcoiner and artist-programmer. He stated that in the past, he created art with code, but before he created Ordinals, it was always a hobby.

In 2021, as interest in NFTs began to emerge, he saw something in the space he wanted to dive into. “Even as a hardcore Bitcoiner who found altcoins uninteresting,” he joked.

In early 2022, Rodarmore decided he would find a way to create an NFT on top of the Bitcoin chain.

“So I came up with Ordinal numbers or Ordinal theory when I’m being ironic.”

Casey Rodarmor

According to Rodarmor, Ordinals were actually created by Satoshi Nakamoto in 2009 when he mined the Bitcoin genesis block. In this sense, the Ordinals, and especially the early Ordinals, are certainly of historical interest.

How do Ordinals Work

Each Bitcoin is divided into 100,000,000 units called satoshi (or sats). The new Ordinals protocol allows the people who run Bitcoin nodes to write data into each satoshi, creating something called an Ordinal. This data written to Bitcoin can include smart contracts, which in turn allows the use of NFTs.

When creating an Ordinal, all attached data is written to the blockchain, unlike Ethereum, where the NFT image itself is stored in the cloud or on the servers of the smart contract owner. Moreover, Taproot qualifies the “signature” as witness data, and the fee for writing witness data to the blockchain is lower than standard transaction data, so a mint of such tokens is relatively cheap.

What are Ordinals Serial Numbers

Ordinals serial numbers are a satoshi numbering scheme that allows you to track and transfer individual satoshis. Sats are numbered i n the order in which they are mined and transferred from transaction inputs to outputs keeping the order in which they are received.

Both the numbering and the transfer scheme depend on the order. To break it down, the numbering scheme depends on the order of satoshi extraction, while the transfer scheme depends on the order of transaction inputs and outputs.

Hence the name, Ordinals serial numbers.

What is Ord

Ord is a wallet and explorer that provides the ability to track the location and a serial number of specific satoshis. It also allows you to create and transfer captions, which are individual satoshis with added content such as images, videos, and HTML.

How do NFTs Work in Ord

Ordinals NFTs have two key features that make them different from others.

• First, they are made up of data on the network, which means that the actual image for the NFT is stored directly on the blockchain rather than linked to an external website like most Ethereum NFTs. This makes them unique and more secure, as data cannot be lost or changed without affecting the blockchain itself. Also, it is believed that storing fully networked NFTs is now seven times cheaper in Bitcoin than in Ethereum.

• NFTs are pegged to individual satoshis, unlike Ethereum NFTs, which have their own token. This creates a link between the NFT and the underlying asset, Bitcoin.

However, maintaining this connection can be tricky because Bitcoins are interchangeable, meaning each is fungible and can only be differentiated through a complex system of I/O transactions.

To solve this problem, Ordinals use a common numbering system that gives each Satoshi a serial number based on the order in which it was mined. This numbering system, along with other details, is used to ensure the continuity of the NFT.

It is important to note that Bitcoin does not natively support these features, and NFT holders could accidentally spend their NFTs on transaction fees if they are not careful.

How to’s of Ordinals

This Ordinals review will demonstrate how to buy and sell NFTs with a new protocol.

How to Buy NFTs with Ordinals

1. Get the Right Wallet

You can’t store Ordinals in a browser wallet like MetaMask yet. You must set up a Bitcoin wallet that allows enough customization to get Ordinals.

2. Set up your Wallet

Change the settings to make it compatible with Ordinals. Now that you’ve set up your wallet, you have three options for getting an Ordinal:

• Run the node and enter the serial number yourself.
• Find an Ordinal owner.
• Use a service to add an Ordinal without running your own node.

3. Find Ordinals to Buy

To find Ordinal projects, join the Ordinals Discord channel. Go to the link-your-project channel and see what projects are there. On this channel, collection creators link their Discord, where you can buy their Ordinals.

How to Sell NFTs with Ordinals

Currently, the selling of Ordinal NFT is done through manual order books and OTC trading. Users will need a dedicated wallet and block explorer (Ord Wallet) to index and track Ordinal NFTs, but they can send and receive them with any type of Bitcoin address.

Users will need to run a full Bitcoin node to be able to sell them. Since this is somewhat unfeasible for most users due to hardware requirements, some lightweight clients are currently in development and will be launched in the coming months.

Are Ordinals Safe?

Supporters of the project suggest that it will generally have a positive impact on the Bitcoin ecosystem. They believe that the integration of NFTs on the Bitcoin blockchain is a safe development that will bring more fees and use cases on-chain.

Some people believe that the inclusion of NFTs on the Bitcoin blockchain will negatively impact its financial and transactional use case.

It is possible that Ordinals could become the cause of a new conflict between developers seeking to preserve the original concept of Bitcoin and miners who receive income from commissions. However, many believe that Ordinals can become an organic addition to the network and “make Bitcoin great again.”

Pros & Cons of Ordinals

Pros 👍

Among the advantages, we spot the following:

• Hype and the emergence of a new market.
  Any industry allows for the greatest profit for pioneers, so the floor of the Ordinals from the first thousand is now higher than that of most NFT collections on Ethereum.
• The resurgence of interest in Bitcoin.
  For a long time, BTC has been perceived solely as “digital gold” and is used mainly for savings and long-term investments. Ordinals were able to return activity to the network and attract the attention of the public, who had not previously been interested in buying BTC.
• Secure decentralized data storage.
  If you exclude the speculative factor, then Bitcoin is one of the few networks that are considered truly decentralized. In addition, Ordinals are completely stored on-chain, unlike Ethereum (and most other) NFTs, whose images are recorded on third-party cloud storages.

Cons 👎

The main problems of Ordinals:

• High technical entry threshold.
• Lack of infrastructure and convenient solutions for storage, transfer, and trading. Now everything works thanks to the enthusiasm of a few Bitcoiners, so the risk of running into a scam is an order of magnitude higher compared to traditional NFTs. In addition, trading through OTC (Over-the-Counter-Markets) gives more freedom to speculators, which increases the likelihood of a bad deal.
• Potentially, Ordinals can overload the blockchain. “Inscriptions” take up ten times more space in the block than regular transactions, and Taproot allows you to record this data relatively cheaply. If Ordinals become a mass phenomenon, then Bitcoin may face congestion and its consequences: many hours or even a daily queue in the mempool and a commission of several tens/hundreds of dollars.

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