What are Ordinals?
Most NFTs are created and tracked through a smart contract. However, the assets that these smart contracts represent are often hosted elsewhere. For example, some NFT platforms use the decentralized storage system, IPFS, to store NFT artwork/audio/video files.
However, Ordinals are enrolled in satoshis and therefore these Bitcoin-NFTs are stored on the blockchain. They are validated in blocks along with other transactions and stored in the network's distributed ledger.
In addition, traditional NFTs often have metadata that allows creators to change the appearance and characteristics of an NFT. For example, some NFT projects will ask users to update their metadata in order to update their NFTs with higher resolution images.
However, since Ordinals are stored in a chain, their data is immutable and cannot be changed. Furthermore, unlike NFTs, Ordinals do not provide creators with the option to receive royalties on subsequent sales.
Simply put, Ordinals are immutable and complete digital artifacts. Unlike traditional NFTs, they cannot be manipulated and reside entirely on the chain.
For these reasons, Ordinals Protocol creator Casey Rodarmor believes these digital artifacts are "intended to mirror what NFTs should be."
How to get started with Ordinals?
Until recently, the only way to sign up and use Bitcoin Ordinals was with a fully synchronized Bitcoin node, which is expensive and requires advanced technical competence.
However, the Gamma platform has provided a no-code alternative.
Here is a quick guide:
Install the Xverse Desktop browser extension for Chrome. Connect to Gamma.i® and select your enrollment type.
You can enroll an image or text directly on the Bitcoin blockchain. Upload the file you want to enroll. Remember to keep your files under 35 kb for best results. You cannot change or delete it either. Make sure what you upload is exactly as you intend it to be.
You can now choose your transaction rate based on network congestion. The higher the rate, the more likely your transcript will be created sooner. However, this can still take a few hours or even several days.
You will now need to enter your Ordinal recipient address.
To receive your Bitcoin NFT, you will need a new, unused, and Ordinals-compatible Bitcoin taproot recipient address.
In your Xverse wallet, navigate to the NFT tab and press the receive Ordinals NFT button.
Copy the taproot recipient address and insert it into the recipient address field found in the BTC wallet in Gamma.
Benefits of Ordinals
Ordinals can have a positive impact on the Bitcoin ecosystem by improving its security and incentivizing developers to build on the network.
The number of newly created Ordinals has skyrocketed since their launch, which caused an increase in transaction fees and average block size on the Bitcoin blockchain. In addition, Bitcoin NFTs will be beneficial to Bitcoin security.
By increasing transaction fees, the creation of Ordinals will incentivize miners to protect the network; whereas, revenue from mining rewards decreases with each Bitcoin halving.
An independent developer, Udi Wertheimer, explained, "Because block space is scarce and there is demand for things like registrations, there is a lot of hope that we will have enough people willing to pay fees to keep the Bitcoin network secure."
In addition, Ordinals provide a new use case for making Bitcoin construction commercially profitable. "With all that interest around Ordinals and signups, I expect there will be a very large ecosystem built around that," he said.
Wertheimer dismisses the idea of some Bitcoin core developers who claim that NFT creation is not an appropriate use case for Bitcoin.
According to him, in recent years, Bitcoin's core developers "have ignored what real Bitcoin users want."
The pros and cons of Bitcoin Ordinals.
➕ Pros.
They are something the market wants and are paying for block space.
They make Bitcoin fun and entertaining, and bring altcoiners back to Bitcoin.
Increasing Ordinals fees can benefit Bitcoin's overall security model by providing income to miners after halving is completed over the next 120 years.
➖ Cons.
May make it difficult for node operators to run full nodes and could overload the blockchain.
Inscribing non-fungible features in Satoshis may harm the overall fungibility of Bitcoin and affect privacy.
Although Bitcoin's block space is not entirely scarce, as the adoption of Ordinals increases, the negative effects of inscribing this data in blocks may be felt.
Top 3 Ordinals
More than 48,000 entries have been minted at the time of this writing, and the Web3 community is beginning to take note of the fascinating collections and amazing sales that have emerged.
Below are some of the most interesting (and valuable) Ordinals.
Bitcoin Rocks: It is inspired by Ether Rocks, and the total supply of this collection is limited to just 100. Some NFTs trade for as much as 1,000 BTC/13,858 ETH (over $22 million). The current minimum bid price stands at 2.7 BTC/37.42 ETH (almost $61,000).
Ordinals Punks: As lucrative as the famous CryptoPunks. Currently, the minimum price is 3.7 BTC/51.26 ETH (almost $84,000), and the highest selling price is for Ordinal Punk 78 which is priced at 50 BTC/692.66 ETH ($1,132,500).
Timechain Collectibles: Series 1 watches from the Timechain Collectibles collection are a very limited set of Ordinals. There are just 21 examples representing clocks in various forms: cyberpunk clocks, pocket watches, antique calendars and more. Auctions of the NFTs are held on the project's Discord, with Inscription 364 and sell for 3.08 BTC/43.59 ETH ($67,000).
This is all the basic information you need to know about Bitcoin Ordinals and its most important features. Remember that education is a key factor in the times to come and you can always learn and educate yourself about new technologies at Binance Academy, and for free!
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