What are Ordinals?
You've probably heard of Ordinals, let's find out what they really are!
To better understand how Ordinals work, we need to go back to the basics...
The OP_RETURN function
It is possible to attach non-monetary data to a Bitcoin transaction, via the OP_RETURN function. This function is the basis for understanding how metadata can be linked to Bitcoin transactions!
So why haven't we seen any new collections of nft in recent years on Bitcoin? In fact, the use of OP_RETURN for purposes other than the payment system, such as data storage, was a matter of debate in the Bitcoin ecosystem! So, a soft fork was made to limit the amount of code that could be done via this famous function to 80 bytes... So, the debate was over…
To understand why there was so much debate about the various uses of the Bitcoin network, it is important to understand that this kind of use can lead to a large flow of metadata, which in turn will increase the cost of storing and managing the network data. Bitcoin is known to be decentralized, so this increase in cost could undermine that fundamental factor.
Obviously, this is not the real end, otherwise we wouldn't be talking about NFT on Bitcoin...
SegWit & Taproot
It is thanks to two updates of the Bitcoin protocol that the trend has been upset. These two updates are SegWit and Taproot which combined allowed the engineer Casey Rodarmor to create the Ordinals project...
To make it very simple, here is what these two updates allow (among other things):
SegWit (2017): Transaction size optimization to increase the number of transactions per block... To keep it simple, imagine that the data has been separated into two parts, one side with the main data and the other with "witness" data. The witness data will be removed from inside the transaction to be integrated in the block separately... It's much more technical and complete than that in reality, but you just have to take into account this separation of data to understand Ordinals.
Taproot (2021): This update brings a lot of new things and is considered as one of the most important of the last years... The main thing to remember is that thanks to this update, it was possible to increase the development possibilities in the "cookies" part presented by SegWit. Once again, this update brings a lot of complexity, go and have a look at it, it's very interesting!
Now we can get to the heart of the matter - Ordinals, the NFT of Bitcoin!
The Ordinal Project
As said before, Casey Rodarmor is the one who came up with the idea of Ordinals, his goal was to create "Digital Artefacts", which are what we identify as “Bitcoin's NFTs”.
To accomplish his project, he will have to identify each unit of Bitcoin, which are called Satoshis, to number them. On Ethereum, standards such as ERC-721 are used to create the NFTs. On the Bitcoin blockchain, it is impossible to use this method... Casey Rodarmor will therefore list the Satoshis according to their order of arrival in the transactions.
Once the identification is done, how to link an image to a Satoshi? It is at this moment that Casey Rodarmor will use the two updates we have previously talked about to realize his project and create the Ordinal Theory. He will use the "Witness" part of a transaction to link an identified Satoshi with other data.
Here is what we can find on the official Ordinal Theory Handbook: " Individual satoshis can be inscribed with arbitrary content, creating unique Bitcoin-native digital artifacts that can be held in Bitcoin wallets and transferred using Bitcoin transactions. Inscriptions are as durable, immutable, secure, and decentralized as Bitcoin itself."
The special feature of these Digital Artifacts is that what is stored on-chain, is the entire property and not the proof of ownership like traditional NFTs. Thus, some argue that Ordinals are more legitimate and immutable than ERC-721 on Ethereum.
The first Ordinal to be inscribed on Bitcoin was a representation of a "Calavera", the famous skull of Hispanic origin. Of course, the person who inscribed it is none other than Casey Rodarmor himself!
Other Ordinals have followed and some have caught the attention of the Bitcoin community, here is a small but not exhaustive list of the most important entries to date:
- Inscription 0: The First Ordinal – Casey Rodarmor
- Inscription 2: The First GIF
- Inscription 54: The First PDF – The Bitcoin Whitepaper
- Inscription 73: The First Song - Have Fun Staying Poor by BTC Minstrel
- Inscription 142: The First Game - Snake
- Inscription 652: The Biggest Bitcoin Block Ever Mined - Taproot Wizard (4 MB block)
The Bitcoin community has been quick to create solutions for creating, mining and trading Ordinals...
Gamma.io in particular, which is a marketplace specialized on the nft of the Bitcoin ecosystem has set up a complete solution to browse Ordinals but also to register them on the blockchain easily - Also, wallets like Hiro Wallet and Xverse are using the solution proposed by Gamma to offer users the tools to create them directly through their browser extension!
This is the beginning of a new paradigm that announces many new features but also many discussions. Again, some question the usefulness and legitimacy of NFTs / Digital Artefacts on Satoshi Nakamoto's blockchain... Anyway, good thing or not, we should not ignore what is happening nor deny the innovations in blockchain…
Ordinals Documentation: https://docs.ordinals.com/
Github Document from Casey: https://github.com/casey/ord/blob/master/bip.mediawiki
Ordinals website: https://ordinals.com/
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