❔What is an Ordinal?

(Bitcoin NFT)

Ordinals Explained by CoinGecko:

Bitcoin Ordinals are an emerging concept in the Bitcoin community, where digital assets are inscribed onto satoshis, which are the smallest units of Bitcoin. These inscriptions are somewhat akin to Non-Fungible Tokens (NFTs), which are unique digital assets typically associated with Ethereum's blockchain.

The concept of Bitcoin Ordinals was made possible through the Taproot upgrade on the Bitcoin network, which in itself was facilitated by the earlier Segregated Witness (SegWit) upgrade that took place in 2017. The SegWit upgrade fixed certain issues and set the groundwork for second-layer solutions like the Lightning Network, while Taproot has provided enhancements to privacy, reductions in transaction data, and lowered costs.

Through a process called "Ordinal Inscriptions," users can write data into the witness part of Bitcoin transactions. This allows them to inscribe unique information onto satoshis, combining different elements in a novel way and expanding the functionality and potential uses of the Bitcoin blockchain.

Bitcoin Ordinals were created by Casey Rodarmor, and they allow for the attachment of digital artifacts such as images or text directly onto the Bitcoin blockchain. This content, once inscribed, is permanent and can be traded or transferred, similar to NFTs. To create Ordinals, users need to download Bitcoin Core, synchronize the node, and set up an Ordinals wallet.

Some worry about block space being occupied, the potential for increased fees, miner collusion, and other issues. However, others argue that the impact is minimal and welcome the innovation and added functionality that Ordinals bring to the Bitcoin ecosystem.

Several projects have started offering services for creating Ordinal Inscriptions, such as Gamma and Ordinalsbot. Additionally, companies like Hiro Systems and Xverse have announced support for Bitcoin NFTs, indicating a growing interest in this area.

Bitcoin Ordinals represent an innovative use of the Bitcoin blockchain to create unique digital assets.