Bitcoin NFTs, also known as Ordinal NFTs, work differently from traditional Ethereum-based NFTs. They utilize a feature called inscriptions on the Bitcoin blockchain. Here’s a simplified explanation:

Ordinal Theory: This theory gives individual identities to satoshis (the smallest unit of Bitcoin), allowing them to be tracked and transferred with unique meanings.

Ordinal Protocol: Developed by Casey Rodarmor, this protocol assigns a sequential number to each satoshi, making each one unique.

Inscriptions: These are data such as images, text, or videos that are attached to a satoshi through a Bitcoin transaction. Once the transaction is mined, the data becomes a permanent part of the Bitcoin blockchain and can be viewed through Ordinal-enabled wallets and viewers.

The key difference between Bitcoin NFTs and others is in data storage. While Ethereum NFTs often link to external files for their associated data, Bitcoin NFTs have the data inscribed directly onto the blockchain, making them inherently part of the Bitcoin ledger.This method provides a unique way to create and track NFTs within the Bitcoin ecosystem.