With the advent of blockchain technology, the revolution in the space of financial transactions has been phenomenal. From decentralized banking to trading cryptocurrencies, we have witnessed spectacular advancements. Another recent breakthrough was the emergence of non-fungible tokens (NFTs), which have been capitalized on by a large number of people. Bitcoin, the most popular cryptocurrency, is making news again as it has found a new utility with the development of Bitcoin NFT ordinals.
What are Bitcoin NFT Ordinals?
Bitcoin has evolved from being a lending and borrowing mechanism to becoming a host to a range of DeFi protocols in recent years with the advent of Stacks (STX), Wrapped Bitcoin, etc. It has now found another use case in enabling people to create and store digital artwork like images, audio, text, or videos on the Bitcoin blockchain network. This has become possible because of the Ordinals protocol.
As thrilling as it sounds, this new evolution has become highly popular among the bitcoin community, and more than 100,000 ordinals have already been created.
This has not only increased the block size of Bitcoin but has also resulted in more than 40 million new people joining the Bitcoin blockchain network. One might wonder how ordinals differ from the already existing idea of NFTs.
The distinction can be simply understood by knowing that bitcoins are quantified in ‘satoshi’ (sats), and ordinals are inscriptions in the form of audio, text, image, etc., on the satoshis. Such an inscribed satoshi is termed as a Bitcoin NFT ordinal, and these are stored on the Bitcoin chain. NFTs, on the other hand, are digital artworks regulated through smart contracts hosted elsewhere, like decentralized storage. Moreover, NFTs have metadata, which allows scope for modifications and customization in the appearance of the artwork, whereas ordinals are not customizable and cannot be changed. Moreover, one cannot receive royalties on ordinals, unlike NFTs which can be monetized on the subsequent sale of the artwork.
Conclusion
Ordinals have also faced criticism from many, as it has resulted in an increased block size for Bitcoin, thus increasing the already massive energy consumption. Although the new technology has mostly received positive affirmation as it has increased the popularity of bitcoin and has also unlocked another potential revenue stream for miners who would get more transactional fees from mining ordinals. Thus we can say that the innovation of ordinals has surely opened a new gateway towards the development of more use cases of cryptocurrency and has increased the popularity of the crypto-universe.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
