The Inscription Revolution: Exploring Bitcoin Ordinals Protocol
Are you tired of using Bitcoin solely for transferring value? Look no further than Bitcoin Ordinals. This revolutionary new protocol, made possible by the Taproot upgrade launched on November 14, 2021, allows for each individual satoshi to be identified and transacted with extra data attached. This process, known as "inscription," creates a new use case for Bitcoin beyond simple transfers of value.
What are Bitcoin Ordinals?
Bitcoin Ordinals are digital assets inscribed on a single satoshi in the Bitcoin network, allowing users to make individual satoshis unique by attaching extra data to them. This creates a digital asset similar to an NFT, but with the added benefit of being inscribed on a satoshi in the Bitcoin network.
As of May 2023, over 3 million inscriptions using ordinals have been created, with users pouring images, video games, and other content onto the network. Ordinals are changing the world of blockchain art by providing an entirely new way to store information on Bitcoin transactions and increasing the number of non-zero Bitcoin addresses to an all-time high.
How do Bitcoin Ordinals work?
Ordinal Theory is a proposed methodology for identifying each satoshi via a serial number and tracking them in the Bitcoin coin supply, from first minting through their entire lifespan of transactions. Based on the total supply of Bitcoin, different ranks have been prescribed to denote the rarity of different satoshis.
However, the Ordinals protocol has been met with controversy as it competes for block space with regular BTC transactions, which increases network fees. Despite this, some Ordinals supporters argue that this could be positive as fees are a crucial incentive for miners to secure the blockchain.
Buying and Creating Bitcoin Ordinals
So, how do you buy and create Bitcoin Ordinals? To buy, you will need to find a marketplace or exchange that supports the protocol, such as OpenSea or MintGate. Creating an ordinal requires a small fee, which varies depending on the complexity of the inscription.
Bitcoin Ordinals were created by a team of developers led by an anonymous individual or group going by the pseudonym "Ordinal Studio." However, the protocol is open-source, meaning anyone can contribute to its development.
How do I inscribe Bitcoin Ordinals?
To inscribe a Bitcoin Ordinal, you will need a compatible wallet, such as Electrum or Wasabi, that supports the Ordinals protocol. From there, simply create a transaction with the desired amount of Bitcoin and attach the extra data that you want inscribed on the satoshi.
Difference between NFTs and Bitcoin Ordinals
While both NFTs and Bitcoin Ordinals are digital assets that can be bought, sold, and traded, the key difference is the underlying blockchain technology. NFTs are typically inscribed on the Ethereum blockchain, while Bitcoin Ordinals are inscribed on the Bitcoin blockchain.
Examples of Bitcoin Ordinals
Some examples of Bitcoin Ordinals include artwork, music, and video games (virtually any metadata that goes along with sats ), with each inscription being unique and verifiable on the Bitcoin network.
Investing in Bitcoin Fractions
Finally, if you're interested in investing in Bitcoin but don't have the funds to purchase a full coin, fear not! You can invest in Bitcoin fractions, also known as satoshis, which are divisible up to eight decimal places.