Bitcoin Ordinals is a protocol that makes it possible to create NFTs on the Bitcoin blockchain. NFTs on the Bitcoin blockchain, created by adding data to Satoshis, are stored entirely on-chain and thus do not require dynamic metadata unlike Ethereum-based NFTs. Ordinals Protocol allows Bitcoin nodes to attach various data such as text, JPEG, audio or video to each Satoshi. In this way, to write smart contracts on Bitcoin becomes possible. The protocol offers complete and immutable NFTs as it ensures that all data is stored completely on-chain.
Bitcoin Ordinals makes it possible to create NFTs on Bitcoin by allowing unique data to be attached to each satoshi. The process is accomplished with the Ordinal Protocol developed by Casey Rodarmor.
First, the protocol assigns a sequential number to each satoshi, making each satoshi unique. The unique numbers are endowed with customized data through a special process called inscription. Data is added to the corresponding satoshi during a Bitcoin transaction and is permanently added to the blockchain once the transaction has been confirmed in accordance with the blockchain's security protocols. Added data can be in various formats such as text, JPEG, audio or video.
The private data added to the blockchain is permanent and unchangeable, ensuring the uniqueness and traceability of Ordinals NFTs. Created NFTs can be viewed, transferred, and traded between collectors through Ordinal-enabled wallets or online Ordinal viewers.
The importance of the Bitcoin Ordinals Protocol is based on several main reasons:
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There are two methods to mine Ordinals NFTs. The first method is to start a Bitcoin node and write satoshi to the wallet via Ord on this node. The first method may require technical knowledge. The second method is to use authoring tools that do not require technical knowledge, which is a simpler and more user-friendly option. An amount of Bitcoin may be needed for the minting process, and the minting process can be carried out through the tools or bots used.
Bitcoin Ordinals NFTs stand out with their simple and secure structures. Since Ordinals are stored directly on the Bitcoin blockchain, they are more durable and guarantee long-term usability, unlike contents stored off-chain. Thanks to their immutable nature, inscriptions cannot be modified or deleted by anyone once created, making them safer than other NFTs.
Bitcoin Ordinals NFTs offer flexibility by supporting the types of content that web browsers can handle. Their complex structures create difficulty in use. In contrast, Ordinals' simple structure reduces security vulnerabilities and provides a more reliable environment although projects such as RGB and Taro offer more features. Bitcoin's limited supply and high value contribute to the rarity and value of Ordinals NFTs.
Additionally, Bitcoin is required to create, transfer or store Ordinals. Among the advantages of Ordinals is that it does not cause confusion and difficulties with on-chain royalties like NFTs on other chains. Ordinals is based directly on the Bitcoin blockchain that provides safe, durable and flexible NFTs.
Bitcoin Ordinals NFTs can increase transaction size and complexity by adding large data payloads on-chain, which can lead to some drawbacks. First, higher transaction fees may result in miners prioritizing transactions that offer greater economic incentive. This means significantly higher fees may be required for large Ordinal transactions and may price out individual creators, limiting adoption by cost-sensitive users. Second, the constant marking of big data can contribute to increasing the blockchain size. This could require regular protocol upgrades to meet growing storage demands, exacerbating Bitcoin's existing concerns about scalability. At last, it could potentially impact node bandwidth requirements, which could reduce the overall efficiency and availability of the network.
The fundamental difference between the two lies in the way data is stored and represented on the blockchain. Ordinals provide greater security and immutability by using an on-chain approach, while traditional NFTs rely on off-chain storage and are more vulnerable. Creating Ordinals is technically complex and involves writing data into satoshis, the smallest unit of Bitcoin. Traditional NFTs are minted through a more mature process on platforms like Ethereum. Ordinals are unique because they are tied to a specific satoshi, and their rarity is determined by their number or content. The rarity of traditional NFTs is determined by the characteristics of the artwork or the scarcity of the token supply.
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