Ordinal Protocol: BTC Chain Can Actually Mint NFTs! Exploring New Possibilities for BTC

Since software engineer Casey Rodarmor launched the Ordinal protocol on January 21, it has become possible to mint NFTs on the Bitcoin chain's mainnet, potentially unlocking the huge potential of Bitcoin as 'digital gold'. The concept of Bitcoin NFTs has sparked intense debate within the dominant blockchain community, with some excited about the new exploration while others have completely abandoned Ordinal. Amid the widespread discussion, according to Dune Analytics data, fewer than 50,000 Ordinals have been minted.

So why are Ordinals so rare? Because the vast majority of people still don't know how to buy them, let alone mint them. Higher entry barriers mean potential opportunities abound, but they also entail higher risks. If you are ready to seize this opportunity and embrace the potential of Ordinal, we will guide you on how to safely find, purchase, and store them. First, it is necessary to understand some key points about Ordinal that ordinary NFT enthusiasts may not know.

What is Ordinal

Each Bitcoin is divided into 100,000,000 units, called satoshis (or sats). The new Ordinal protocol allows people operating Bitcoin nodes to record data on each node, creating something called Ordinal. Data inscribed on Bitcoin can include smart contracts, which in turn make NFTs possible.

Ordinal will allow users to create unique NFTs on the smallest unit of Bitcoin, satoshis, with a scheme supporting the tracking and transfer of satoshis' numbers. Each satoshi will be numbered in the order it is mined and transferred in a first-in, first-out order from transaction inputs to transaction outputs. This way, each satoshi will have a unique number as an identity, allowing it to be tracked or traded individually. On this basis, data can be written into each satoshi (such as images, text, videos, applications, audio, HTML, etc.), completing the transformation of a satoshi from the smallest unit of Bitcoin to a Bitcoin NFT.

How is Ordinal Different from Regular NFTs?

NFTs on Ethereum typically point to off-chain data on the Interplanetary File System (IPFS), a decentralized file storage system, somewhat like a blockchain's hard drive—capable of using dynamic metadata for changes. So, some NFT projects will update the metadata of individual NFTs to improve image quality. They may even require their holders to click the "refresh metadata" button on OpenSea to get new, higher-quality images.

The ability to change NFT metadata implies the flaws that Casey Rodarmor was trying to improve when creating the new protocol. In Rodarmor's estimation, NFTs are "incomplete" because many situations require off-chain data. Whereas Ordinal is "complete" because all data is directly recorded on-chain. Not only that, it is also a means of directly and permanently storing digital content on-chain—something rare in the NFT field. This is why Rodarmor calls them "digital artifacts" rather than NFTs. Additionally, NFTs typically come with creator royalties, while digital artifacts do not. According to Rodarmor, an Ordinal "is intended to reflect what NFTs should be, sometimes are, and what inscriptions always are, by their very nature."

All of this indicates that Ordinals on Bitcoin may not only mark a cultural shift for Bitcoin—they may actually be a technical improvement for NFTs. With this background, here are the methods for minting, purchasing, receiving, and storing your first Ordinal.

Introduction to Obtaining Ordinal

1. Establish a Wallet

First, you need a Bitcoin address that can receive information, as Ordinals cannot yet be stored in browser wallets like MetaMask. You must set up a Bitcoin wallet that allows enough customization to receive Ordinal inscriptions. The Sparrow wallet is widely recommended.

• Download wallet link: https://sparrowwallet.com/download/
• Follow the detailed tutorial on GitHub to create a wallet compatible with Ordinal: https://gist.github.com/windsok/5b53a1ced6ef3eddbde260337de28980

!!! If you follow this guide, do not send BTC to or from this Ordinal wallet. This wallet is only for receiving Ordinals. If you send BTC from this new Ordinal wallet, you may accidentally send both BTC and Ordinal.

2. Once the wallet is set up, you can obtain Ordinal in three ways:

1. Run a node and mint an Ordinal yourself.
2. Find Ordinal owners on Discord and purchase directly from them.
3. Mint Ordinal using a bot without running your own node. The Satoshibles NFT Collection team has created the Ordinalbot for convenience, link: https://ordinalsbot.com/

Important Note: Direct purchases and bot minting are both very new and risky. There is currently no major Ordinal market, so proceeding requires a great deal of trust and caution.

Bitcoin Punks Series Soars in Value

As speculation around Ordinal NFTs on the Bitcoin ecosystem continues to grow, a project similar to the popular CryptoPunks series has rapidly increased in value—“Bitcoin Punks”.

Recently, everyone has been rushing to mint CryptoPunks on the Bitcoin chain, which is a beautiful story. CryptoPunks is one of the most historically significant NFTs, and its combination with BTC digital gold has attracted many people, bringing a lot of attention, discussion, and speculation. On the afternoon of February 9, the total of 10,000 Bitcoin Punks was fully minted. According to a tweet this Wednesday, Ordinal Punks NFT Punk 94 was sold for 9.5 BTC, approximately $214,000.

Controversial: Are Ordinals a Short-Lived Craze or a Future Trend?

According to Dune Analytics data, on February 9, the daily minting of Ordinal Inscriptions/NFTs on the Bitcoin chain reached a record high of 21,824, spending 3.333 BTC on the day of Ordinal Inscriptions minting, and Bitcoin Taproot usage soared to 9.75%.

This is mainly due to the wealth effect, as seeing a Punk sell for at least one BTC in the current market, with extremely low costs, is hard to resist. However, many people are far less proficient in using the Bitcoin network compared to Ethereum. As you can see, if you want to enter the Ordinal market early—just like "getting up early"—you must string together a series of tedious tasks to achieve it.

Some purists believe that blockchain should be limited to financial transactions, and that this meaningless text or image data is junk data that occupies system resources and should be rejected. Others point out that the popularity of the Ordinal Protocol is a positive catalyst that will drive further development of blockchain. Sam Callahan, a Bitcoin analyst at the financial services company Swan Bitcoin, told CoinDesk that while the popularity of Ordinal Punks will drive demand for block space, miner income, and ultimately the adoption of Taproot, it is not without risk.

"In the long run, if the demand for these Ordinal Inscriptions is proven to be persistent, then these Ordinal Inscriptions may affect other Bitcoin use cases, such as payments through the Lightning Network, as the Bitcoin fee market will distort its use as an open currency protocol," Callahan said.

The Ordinal protocol is in its early stages, and while it is undeniable that this is a major step forward for the Bitcoin ecosystem and NFT technology, its high participation threshold, lack of secure trading methods, and the nascent NFTs in the Bitcoin ecosystem are shortcomings that have deterred many people. The high threshold for node deployment has deterred many novices from entering, and has also brought about a special independent storage and trading environment, leading to the fatal problem of being unable to directly connect to existing large secure NFT exchanges. In the early exploration of NFTs in the Bitcoin ecosystem, it may be a new bud thriving in the spring rain, or it may be a flash in the pan in the cold wind.

We are also looking forward to more engineers and major NFT trading platforms supporting and optimizing the Ordinal protocol. Do you believe in the genesis NFTs in the Bitcoin ecosystem? Before venturing forward, please be careful and understand your capabilities. Are you ready for in-depth research? If you are interested in the Ordinal protocol and want to learn more about it, you can directly click here to download the Ordinal Theory Handbook: https://docs.ordinals.com/

Follow Us

veDAO is a decentralized investment and financing platform led by DAO, committed to discovering the most valuable information in the industry, and enthusiastic about exploring the underlying logic and cutting-edge tracks of the digital encryption field, allowing every role within the organization to fulfill their responsibilities and receive rewards.

Website: http://www.vedao.com/ Twitter: https://twitter.com/vedao_official Facebook: bit.ly/3jmSJwN Telegram: t.me/veDAO_zh Discord: https://discord.gg/NEmEyrWfjV

Investment carries risks, and the project is for reference only. Please bear the risks on your own.