Bitcoin NFTs, also known as Bitcoin Ordinals or Ordinals NFTs, are non-fungible tokens that run on top of the Bitcoin network.
In the past, it was impossible to create an NFT on the Bitcoin blockchain because the simple architecture of this cryptocurrency could not execute smart contracts. However, the advent of Ordinals and some second-capable solutions made Bitcoin NFTs possible. This new protocol allows each satoshi (SAT) on the Bitcoin blockchain to be assigned a unique identifier so you can trade it with additional data attached.
The solution, which Casey Rodarmor created in late 2022, thus allows you to use fungible tokens, such as BTC, and non-fungible tokens in Bitcoin, making satoshis distinguishable.
How do Bitcoin Ordinals work?
The Ordinals protocol has a numbering system that assigns an individual value to the minimum Bitcoin unit, satoshis. Since each satoshi has a numeric identifier, you can inscribe in a specific sat. Inscriptions are collections of arbitrary information and metadata in almost any format the Bitcoin blockchain aggregates.
This process makes Ordinals similar to NFTs in that every piece of information enrolled in the sats is unique. All this is thanks to two updates to the Bitcoin protocol: Segregated Witness (SegWit) and Taproot. Thanks to Taproot, which introduced a new Bitcoin address format that Ordinals use to identify a specific satoshi.
For its part, Segregated Witness made it possible to add further information that is unlinked to the transaction and stored in a separate data structure on the blockchain. SegWit made it possible to increase Bitcoin’s block size and make it possible to add image and video information.
What are BRC-20 Tokens?
BRC-20 tokens differ from other token standards as they are not complete standards or parameters. In reality, these tokens are JSON code snippets embedded in an ordinal. Their purpose is to create semi-fungible tokens on the Bitcoin blockchain. Something that makes them similar to Ethereum’s ERC-20 tokens.
In this way, users can deploy, mine, and transfer BTC-20 tokens using the parameters inscribed in the Ordinal, allowing DOMO, who created the standard, to mint the first BRC-20 coin under the ORDI token in the 2023 deck.
What are the BRC-721E Tokens?
Developers created BRC-721E tokens for NFTs. But instead of simply enrolling Ordinals as NFTS, BRC-721 allows users to bundle traditional Ethereum NFTs with Bitcoin. These tokens are similar to Ethereum’s ERC-721 standard tokens. You can even create BRC-721E tokens when bridging Ethereum to Bitcoin, sending ERC-721 NFTs to an address where they get burned. Creating these tokens is permanent and cannot be undone once sent to these burn addresses in Ethereum. You can’t recover them.
History of Ordinals NFTs
Ordinals were created in late 2022 by Casey Rodarmor, but the project started to become popular in February 2023. By that time, Yuga Labs, the creators of Bored Ape Yacht Club, announced the first Bitcoin NFT collection using Ordinal. The Ordinals caused Bitcoin transactions to skyrocket as more people wanted to use Ordinal registrations. The peak occurred in mid-May 2023, but the popularity continued and had new heights in July and August. Thus, by the end of August 2023, people generated almost 30 million.
The only problem with this new development is that Bitcoin activity grew. And along with them, transaction fees peaked on May 9, 2023, at $20.34 per transaction.
What are the use cases for Bitcoin NFTs?
There are several uses for Bitcoin NFTs:
Games: game assets, such as cosmetics, accessories, skins, and avatars, can be converted to NFTs and offered to players as incentives.
Art and Music: Artists can tokenize digital art and music to preserve them on the immutable Bitcoin blockchain. You can also use them to pay royalties to their creators and for merchandising sales to fans.
Ticket Sales: Selling tickets with NFTs can be an alternative to traditional ticket sales for shows, virtual events, sporting events, etc. They are eliminating third parties and providing a more transparent service to the parties involved.
Metaverse: It is possible to tokenize properties and parcels, represented by NFTs, creating virtual real estate owned by individuals.
ID and Authentication: By using NFTs, users can represent and verify their identities, which enhances control, security, and data privacy.
Fashion and Luxury: NFTs can authenticate and preserve the ownership of style and luxury items.
Real Estate: Real-world properties can also be tokenized and provide a quick way to transfer between parties and authenticate who the actual owner is. It can also be integrated with other applications and systems to generate new use cases.
How to buy Bitcoin Ordinals?
You can trade Bitcoin NFTs in the marketplaces of Taproot and Ordinals compatible wallets. Where we not only buy, we can also transfer and sell. The wallets that allow using Ordinals are Hiro, Xverse, and Ordinal Wallet.
If we want to buy Ordinals, we must:
- Go to the wallet we like the most and create an account.
- Make a backup copy of the seed phase and enter the wallet password.
- Deposit funds to the Ordinals wallet address.
- Click on the “collections” section to see the Bitcoin NFTs listed.
- We choose the collection we want and click “Buy Now.”
- We will complete the transaction and have the ordinal added to our wallet.
If we want to sell Ordinals, we must:
- Like what we did to buy, we must first create the account and take security measures for the seed phrase and password.
- We deposit funds in our ordinary wallets.
- We go to an ordinal marketplace such as Gamma, OrdinalBots, etc.
- We select the registration type, image, or text and upload it.
- Choose the registration fee. It will depend on the size of the registration and the time it will take for the transaction to complete.
- We add the address to receive the ordinal and complete the transaction.
- Once you enroll the NFT on the Bitcoin blockchain, it will be available for viewing on Ordinal.com.
What are the best Bitcoin NFT Projects?
There are many Ordinary projects in Bitcoin, but we leave you the most interesting ones below.
Megapont Ape Club: This is the most popular collection of NFTs in the Gamma store. With 431 NFTS listed of 2,500 items, it is a fictional universe of peaceful earth and scientifically mutated species.
Ordinal Punks: It is a collection of 100 exclusive NFTs created as tributes to the CryptoPunks. The collection features 650 Bitcoin inscriptions that make them unique and rare—a group created by the pseudonym FlowStay.
TwelveFold: a collection of 3000 generative NFTs from Yuga Lab, behind BAYC (Bored Ape Yacht Club). These pieces are called satoshis and do not have any use or integration with other Yuga Labs projects.