Salute to the friends who have always been on the front line of Bitcoin ecology.
Article author: Arestoshi
Source: X: @AresWey
The Bitcoin ecosystem is one of the few narratives with technological innovation in this cycle, and it is also a super narrative that has been bullish for three rounds in a bear market.
On the occasion of the 2nd anniversary of the Bitcoin ecosystem, I would like to use this article to record the three bull markets in the past two years and pay tribute to the friends who have always been sticking to the Bitcoin ecosystem front.
The birth of Bitcoin ecosystem
On December 14, 2022, Bitcoin's Ordinals protocol was officially launched, and Casey @rodarmor, the father of the Ordinals protocol, engraved the first inscription on Ordianls: Inscription No. 0. Since then, the Bitcoin on-chain ecosystem has officially begun.
The Ordinals protocol can be simply understood as a protocol for engraving data on Satoshi. The data can be pictures, text, JSON, GIF, HTML, etc. Ordinals was born at the bottom of this round of bear market. At that time, the market was dead silent and there was not much publicity, so few people in the circle knew about it.
It was not until early February 2023 that the number of Ordinals inscriptions reached more than 10,000 (now more than 80 million). Most of these more than 10,000 inscriptions are pictures, but there are also GIFs and HTML, etc. Most of them are scattered pictures engraved by users themselves. There are also some collections of 50-200 items, which are not large in scale.
At this time, holders of the CryptoPunks community launched an activity to engrave Bitcoin punks on Ordinals, and they downloaded pixel images of CryptoPunks to engrave them themselves.
Bitcoin Punks is the first 10 KNFT collection on Ordinals. At that time, many people, including me, knew about Ordinals and were shocked: What? Small pictures can be engraved on Bitcoin?
Directly engrave NFT on the Bitcoin chain! Never tamper with it, exist forever! Give each NFT inscription a confirmed inscription number and timestamp! This is a brand new subversive narrative... Previously, BTC could only transfer money, but now BTC has an ecosystem and can engrave data. (See the tweet for details)
I was very excited at the time, and I felt like I had found the passion that blockchain had in 2017 when it was going to revolutionize the world. In the following months, I devoted myself to the Bitcoin ecosystem without sleep or food.
This was the first time that Bitcoin ecosystem Ordinals was promoted in the circle. Everyone rushed to play Bitcoin Punks. At that time, there was almost no infrastructure, and there were no tools and proxy platforms like today. To engrave Bitcoin Punks, you need to have your own Bitcoin full node and understand the technology. But even so, Bitcoin Punks were completed in just a few days. It took more than two months for the Ordinals inscription number to increase from 0 to more than 10,000, and it took less than a week to increase from more than 10,000 to 30,000...
Although Bitcoin Punks is not an original collection, its appearance has brought two rules to Bitcoin Life:
1/First is First
Chinese explanation: Only the first one is recognized. To engrave pictures on BTC, there is no need for smart contracts, and anyone can engrave. So if two identical punks are engraved, which one should be included in the collection? Bitcoin Punks proposed the First is First principle, and only the first one engraved, that is, the one with an earlier engraving number, is recognized.
Please remember this First Rule. It is very, very important. It can be said to be a rule that runs through the entire Bitcoin ecosystem. Without this rule, subsequent protocols such as BRC 20 and Runes will not be able to operate.
2/Fair Launch (Fair mint)
Bitcoin Punks were not inscribed and distributed by the project owner, but were inscribed by the users themselves. This was the first fair launch in the Bitcoin ecosystem and also set a precedent for BRC 20 and Runes. It also led to the fair launch of other chains and ecosystems.
February-March 2023, the first bull market for NFT in the Bitcoin ecosystem
The popularity of Bitcoin Punks triggered the first bull market in the Bitcoin ecosystem: the NFT bull market. This bull market lasted from early February to March 2023. The floor of BitcoinPunks rose from 0.2 ETH to 2 ETH, which was about 0.1 2B TC at the time.
The @Block_Munchers OTC sale price for the Sub 10K (first 10K inscriptions) collection reached 1.2B TC, and @InscribedPepe floored at 1.6 BTC.
The @OrdinalPunks floor of the collection of Sub 1 K (first 1000 inscriptions) even came to more than 2 BTC.
At the beginning of February, the Bitcoin ecosystem had almost no infrastructure and no exchanges. It was extremely difficult to buy BitcoinPunks at that time. You had to go to Discord to find someone to do OTC. The selling price was only 0.2-0.3 ETH, and the guarantee fee for MOD was 0.1 ETH, which was very exaggerated. But even so, everyone still rushed to buy it because the price rose too fast.
I have bought a lot of Bitcoin PUNKs through OTC. @LeonidasNFT also spent several BTC to buy a bunch of rare Bitcoin Punks. He is the founder of Rune $dog. At that time, @z 3 thnft also formed the earliest Chinese community of Bitcoinpunks. I miss it very much.
Later, several exchanges emerged, such as http://ordinals.market, ordianlswallet, ordswap (which has run away), etc. NFTs on Bitcoin now have trading platforms, and the price has soared.
The most popular NFTs during that period were BitcoinPunks and Sub 10 K, with BitcoinPunks having the largest trading volume.
Sub 10 K can be said to be in short supply. There are not many collections in Sub 10 K, so the number of NFTs worth buying is also small.
Many people who bought Sub 10 K inscriptions were very low-key. They bought them as collections and never showed up or sold them. At that time, it took a lot of effort to buy an NFT of the Sub 10 K collection. It was like an archaeologist. Every day, I would hang out in the DC groups of various collections to find traces of collectors. Even if I found them, I might not be able to contact them. At that time, buying a favorite Sub 10 K inscription was like finding a favorite antique.
From March to May 2023, a short bear market will begin
After March, as more and more NFT projects were launched on Ordianls, the market supply and demand became unbalanced and entered a bear market that lasted for 2 months. These are also the 2 months that I miss the most.
Although we were all stuck with a lot of small pictures during that period, we were all confident in the prospects of the Bitcoin ecosystem. At that time, a group of old OGs in the Bitcoin ecosystem chatted every night on space, not only about making money, but also about dreams and distant places, and they were all imagining the future of ordinarys.
During that time, there were many OGs who often shared Space together, including @unisat_wallet's founder @lorenzonical,
Ordinals official DC MOD Dr. Golden Dog @ordjingle, OKX wallet @KKyleChen, idclub founder@moffat 2021, ordswap founder Jack, OrdinalsCN community creator CXO.egg, Bitcoin ecosystem's first gamefi@OrdzGames founder @z 3 thnft, orc-cash protocol founder Sonic, CryptoPunk and BAYC community @SuZhe_eth, market god paulwei@coolish, @Lioneming, Bitcoin ecosystem science blogger @practice_y 11, @ohxiyu, etc.
Many of the OGs are still active now.
At that time, everyone's position was consistent, there were no disagreements, and they were full of longing for the future. There were many idealistic builders.
During this period, two things happened that changed the Bitcoin ecosystem:
1/The birth of sats domain name protocol
At the end of February 2023, the sats domain name protocol was born at 160,000+ inscription number, and it was also the first domain name supported by unisat and xverse.
The Sats domain name protocol seems to be unknown, so why is it being singled out as a big deal?
In fact, the sats protocol was considered a local leader when there were not many asset categories at the time, and the transactions were also very active. While inheriting the First is First principle and Fair Launch rules of BitcoinPunks, it also pioneered the JSON format inscription category.
The big difference between Sats domain name and ETH domain name is: there is no project owner and it is permanently free. You can transfer money by simply entering the sats domain name in the transfer address. Unisat and Xverse wallets already support it.
The Sats domain inspired the later BRC 20.
2/The birth of BRC 20 protocol
Inspired by the sats domain name, engineer @domodata proposed a JSON formatted token protocol named BRC 20, which is the first token protocol in the Bitcoin ecosystem. The first generation of BRC 20 is called $ORDI, which was deployed by domo himself, and the inscription number is 348020. (I thought that ordi's deployment inscription must be a rare collectible, so I sent a private message to domo to ask about the price of ordi's deploy inscription (deployment inscription), and domo said that it would not be sold for less than $1 million)
However, Domo has little confidence in its own BRC 20 protocol, believing it to be just an experimental idea and does not recommend FOMO.
The BRC 20 protocol is indeed relatively crude and will cause a large number of abandoned inscriptions to be wasted. At that time, the Eastern and Western spaces were generally relatively negative in discussing BRC 20. They believed that since there was already BTC, why should we issue a token protocol with such complicated procedures and relatively simple protocols? It felt a bit like taking off pants to fart.
However, gamblers with a keen sense of smell would never miss such an opportunity: they would rather make a mistake than miss it.
So the gamblers minted all the ordi within 2 days, with a total of 21,000 ordi sheets, with a cost price of about 2-3 U per sheet. Each sheet contained 1,000 ordi, which means the cost of each ordi was about 0.003 U.
BRC 20 was a new thing at the time. There was no infrastructure or exchange. It could only be OTC in WeChat groups. No one knew what the future of this thing would be.
Therefore, the price of Ordi did not skyrocket after the mint. The OTC transaction price rose slowly. By the end of April, the price was about 50 U per piece, which is equivalent to 0.05 U per Ordi. It has increased by almost 20 times compared to the price at the time of mint, and the market value is only 1 million U.
I bought Ordi at 70 U. At first, I had no interest in BRC 20, thinking that the protocol was too crude and would waste too many resources on the Ordinals system. But when I heard from a space that Ordi was the first token in the BTC ecosystem, I suddenly woke up! Yes, no matter how crude it is, the first is the first, even if it has no practical value, it has collection value.
Ordi lived up to expectations and started his own journey of ten thousand times.
From May to June 2023, the second bull market of Bitcoin ecosystem triggered by BRC 20
The rise of Brc 20 should be thanked to @unisat_wallet. Without the continuous construction of Unisat, Brc 20 would have died under the circumstances at that time. Thanks to Unisat's efforts, the index and trading market of Brc 20 were launched in May. Brc 20 rose sharply, and the price of ordi rose to 0.3 U per unit, which is 100 times that of mint.
A bug broke out in the trading market just a few days after it was opened. Someone used the double-spending vulnerability of Unisat to defraud a large amount of money from trading users. After Unisat discovered the problem, it was very straightforward: it fully compensated the funds lost due to the bug.
This incident was big news at the time, and all major cryptocurrency media reported it, which was equivalent to a large-scale publicity for the Bitcoin ecosystem and Brc 20.
As a result, all the gamblers outside the market knew that a casino had been opened on Bitcoin, and the name of this casino was BRC 20. So gamblers flocked to it, starting the first round of the BRC 20 craze.
On May 8, the gate exchange launched ordi, and the price was raised to 29.58 u. Ordi achieved a 10,000-fold increase, and a large number of early holders became rich. On May 15, the ok exchange launched ordi, but the price never returned to its previous high.
Also in May, Binance launched the Ordinals NFT market (the one that was recently cancelled). How popular was BRC 20 at the time? The BTC on-chain fee rate once reached more than 500 sats/vb. At that time, no matter what BRC 20 was engraved, it would increase several times. There were too many gamblers, and BRC 20 was not enough.
After the BRC 20 carnival, gamblers set their sights on the Oridnals NFT market. At that time, the price of small NFT images also increased several times. Among them, the price of @BitcoinFrogs Bitcoin Frog increased from 0.00 2B TC in March to 0.1 2B TC. The BTC standard increased by 60 times. It once went from a marginal collection to the collection with the largest market value on Bitcoin.
Starting with BitFrog, the small picture pattern of the Bitcoin ecosystem has changed. People have found that small collections with low inscription numbers such as Sub 10K have a small number of users, which is not conducive to speculation, and its attributes are more suitable for collection. However, large collections with 10K numbers have a large user base and can form a cultural and community consensus, which is more conducive to speculation.
At that time, Bit Frog was hyped up as the first original 10K collection of the Bit Ecosystem. In addition, it was often given away for free on Space and Twitter in March and April. At that time, everyone in the Western Space had a Bit Frog.
I was not meant to be with BitFrog, because at the time I only focused on sub 10K and had no interest in the small pictures with high inscription numbers. In addition, I could not appreciate the artistic style of the little frog at the time, so I did not cherish the few I was given, and sold them all at the lowest price during the trough in March and April.
After BRC 20 became popular, many JSON-formatted currency issuance protocols appeared. Just like when BTC was born, many altcoins based on BTC code were modified. The earliest one was orc 20, which added some intelligent features based on brc 20. Later, some other protocols such as brc 100 and Orc-cash appeared.
There is also a stamp protocol independent of ordinals. A src 20 coin issuance protocol has been developed, and small pictures can also be engraved on the stamp.
Then other chains also began to imitate the inscriptions and brc 20, such as the coin issuance agreement drc 20 on the doge chain, the eths inscription on eth, etc.
For a while, the whole network was imitating the inscription, and the whole network was rubbing the inscription with their hands, it was very lively.
At that time, it was popular to engrave rare satoshis on rare satoshis. An uncommon satoshi was very expensive, costing about 1200 U. If it was a rare satoshi, the asking price was even 10 BTC. Later, the Blob team traded an Epic rare satoshi for 33 BTC.
The popularity of the Bitcoin ecosystem lasted for about a month. After that, with the excessive issuance of inscription assets and the inability to keep up with the funds, the market fell silent again. After all, the entire crypto industry is still in a bear market cycle.
From June to October 2023, the market returns to silence, but innovation continues
After June, the market returned to a bear market, and the BTC on-chain fee rate dropped to 1 sats/vb.
During this period, some major events happened in the Bitcoin ecosystem:
The 1/21 million sats inscription has been slowly being minted and is expected to be completed in October 2023.
2/Ordinals technology upgrade, launched father-son inscriptions, recursive inscriptions, and improved curse inscriptions.
Father-Son Inscription: Select a father inscription to engrave the son inscription, thereby achieving a subordinate relationship. It can be used for the engraving of NFT collections, which is similar to the smart contract confirmation of ETH NFT.
Recursive inscriptions: Infinite numbers of other inscriptions can be used as components to assemble into a new inscription, achieving a Lego-like effect and providing imagination for the metaverse.
Cursed Inscriptions: Some inscriptions that are not recognized by the Ordinals system are classified as cursed inscriptions, and the inscription number is negative. After the system is upgraded, there will be no more cursed inscriptions. The previous cursed inscriptions have been identified and classified and become out of print. (About hundreds of thousands of cursed inscriptions)
3/ The Metaverse Land Project Bitmap was born, which uses Bitcoin blocks as a map.
4/Merlin project team started building BRC 420 protocol and Bitcoin layer 2 Merlin.
5/ The Atomics protocol, which is independent of Ordinals, is growing and developing. It is a token protocol based on a colored coin model, with the feature of 1 coin to 1 satoshi. Transfers are much more convenient than BRC 20, similar to BTC transfers.
6/Casey announced the development of the Runes protocol. In fact, Casey's original intention in developing Ordinals was to build art galleries, museums, and libraries on BTC, but he didn't expect that he would be disrupted by BRC 20.
In fact, Casey's original intention in developing Ordinals was to build art galleries, museums, and libraries on BTC, but he did not expect that his plan would be disrupted by BRC 20.
Here we have to talk about the defects of the BRC 20 protocol:
First, BRC 20 generates a large number of UTXOs and abandoned inscriptions. BRC 20 uses inscriptions as a one-time accounting book. After each mint and transaction, the previous inscription becomes invalid. If you want to transfer money, you need to re-inscribe it. This is a waste of inscription numbers. As a result, the museum is full of discarded "tissue paper". Moreover, each "tissue paper" occupies a UTXO of at least 330 satoshis, lying in the wallet, it is difficult to use, and it is not cost-effective to merge.
Second, BRC 20 transfers require several more steps, wasting time and money. Bitcoin transfers only require one step, and the fee is the network fee. BRC 20 transfers first require a transfer inscription, which includes the inscription fee + the network fee, and then the inscription is sent out, which requires another network fee. This is equivalent to 1 inscription fee + 2 network fees. And it takes at least two blocks to complete a transfer.
Casey was mainly dissatisfied with the abandoned inscriptions and utxos produced by BRC 20. Abandoned inscriptions accounted for more than 95% of the entire Ordinals inscriptions. Looking around, they were all "garbage".
He wanted to create a token protocol that would not generate a large number of UTXOs, would not generate abandoned inscriptions, and would transfer money like Bitcoin. This was later known as the Runes protocol.
November 2023-April 2024, the third bull market of Bitcoin Ecosystem
This bull market was heralded by the launch of Ordi and SATs on Binance Exchange on November 6.
The whole network has once again started a craze for hand-rubbing inscriptions. The overall volume is much larger than the wave in May, and a new batch of BRC 20 tokens represented by $rats have been born, making many people rich.
By March 2024, Ordi had risen to a high of 97 u, achieving a 30,000-fold increase.
$Sats rose to as high as 94 u per piece, which is an increase of more than 300 times.
The market value of $Rats increased to 600 million, an increase of more than 200 times.
#Atomicals protocol#ARC20 assets $atom and $quark also skyrocketed.
The#SRC20 protocol token, which has been ignored since June, has also skyrocketed. Other non-mainstream protocols, such as orc 20, brc 100, brc 420, veda and other protocol assets have also seen a surge.
Bitcoin Frog has risen from a low of 0.03 BTC to 0.43 BTC, a 14-fold increase in BTC terms.
As long as it is a Bitcoin ecological asset, all of them will soar.
The capital flows of this bull market replicated the capital flows of the bull market in May: BRC 20—non-mainstream protocol tokens—NFT.
It’s just that this bull market lasted much longer than the one in May.
At the end of December, a project called @nodemonkes began to sell in the form of a Dutch auction, which changed the NFT landscape of the BTC ecosystem. The Nodemonkes inscription numbers are 83522-111319, and the Bitcoin frog numbers are 321224-412389. People found that the Nodemonkes was the first original 10K collection of the Bitcoin ecosystem.
As a result, the node monkey took back the First narrative that should have belonged to it, and the price rose accordingly. By March 3, 2024, the floor price of the node monkey rose from 0.03 to 0.9 BTC, and the BTC standard rose 30 times. At that time, a rare alien node monkey was traded for 17 BTC, equivalent to 560 ETH. This is the highest transaction record of Bitcoin ecological assets so far.
The popularity of Nodemonkes has boosted the entire BTC NFT market.
https://nodemonkes.com/monkedex
https://x.com/AresWey/status/1759480934645289263…
Merlin's L2 staking has also begun, supporting the staking of almost all Bitcoin ecosystem assets, including NFT, BRC 20, BRC 420 assets, etc. Merlin is a pioneer in Bitcoin's second layer and has opened the prelude to BTCfi. Although there have been various doubts along the way, the final result is that users have received very considerable staking returns.
Regarding Runes, Casey also announced early on that the Rune Protocol will be launched during Bitcoin’s halving block in April.
At the end of January, the RSIC project innovated a set of Rune pre-mining gameplay, which cleverly designed the human nature game and reward mechanism. After that, a large number of pre-mining projects imitating RSIC were born, including the current Rune leader $dog. RSIC and DOG were even hyped up to a valuation of 400-500 million by the market before the Rune protocol was launched.
In late January and before the Bitcoin halving in April, the trading of NFT and Rune pre-mining projects was extremely active. At that time, almost everyone's attention was focused on Runes. Everyone talked about Runes in the group chats and spaces. Everyone believed that Runes was a revolutionary token protocol for the Bitcoin ecosystem and would definitely set off another wave of climax in the Bitcoin ecosystem.
The result is in line with the old saying: the hottest ones must die. The greater the expectations, the greater the disappointment.
Rune Protocol was launched in April, but it was popular for about 10 days before it died down. Its duration was not even as long as the BRC 20 market.
There are several reasons for this:
1/Preliminary expectations were too high, market expectations were overdrawn in advance, and many people sold overvalued pre-mining projects to cash out and leave the market.
2/Only 3-4 runes out of the first 100 runes are fair launch runes, and the other runes are reserved. The playability is very low, and user participation is reduced.
3/The name of the rune must be more than 13 characters, and one character can be reduced every 4 months. This strange setting makes the token name look very long and strange.
4/As the only officially set Genesis Rune No. 0, Casey set a 4-year mint cycle for it, making this token, which could have been the most powerful, lose its short-term speculative attributes and discourage gamblers who wanted to speculate in this bull market.
It can be said that although the Rune Protocol is close to perfection in design and mechanism, it is also a huge challenge to the traditional token mint rules and naming rules, which is mixed with Casey’s personal aesthetic as an engineer.
It's clear that the market is not buying in the short term.
From May 2024 to now, the market is dormant after the frenzy
Ordi fell from 97 to a low of 20.
Sats fell from 94 to as low as 11.
Nodemonkes dropped from 0.9 to a low of 0.09.
Bitcoin Frog fell from a low of 0.43 to 0.028.
Rune Protocol has never exploded. All kinds of Rune tokens have been falling all the way.
Various other non-mainstream protocol assets have fallen back to a point where no one is interested in them, and even many protocols with few users are on the verge of death.
The Bitcoin ecosystem is like an accelerated version of the cryptocurrency world, with three cycles of bull and bear markets in two years.
In early November 2024, Bitcoin led the entire cryptocurrency circle to sound the clarion call of a violent bull market. It has been more than a month since then. All tracks in the cryptocurrency circle, even those old altcoins that have been ignored for thousands of years, have soared, but the Bitcoin ecosystem is still lying on the ground, with no signs of recovery.
Conclusion
As the only narrative with technological innovation in this cycle, the Bitcoin ecosystem will definitely not miss the violent bull market. After 7 months of dormancy and sedimentation, it has accumulated enough strength.
Looking back at every bull market in history, it is an asset bubble driven by capital. The larger the numerator of capital is and the smaller the denominator of assets is, the more severe the asset inflation is and the more obvious the bull market effect is.
This is particularly evident in the three bull markets of the Bitcoin ecosystem because the asset pool of the Bitcoin ecosystem is shallower.
Currently, the total assets of the entire Bitcoin ecosystem are less than 10 billion, less than 0.5% of the BTC market value. In contrast, the total market value of the ETH ecosystem exceeds 300 billion, reaching 66% of the total market value of ETH.
At present, the story and innovation of the Bitcoin ecosystem are far from over. A large number of technological innovation projects are still on the way, such as BTCfi, L2, Runes' defi, etc. There are still too many narratives in the Bitcoin ecosystem waiting to be explored.
