- Bitcoin ordinals permit the inscription of digital assets, such as artwork, onto the Bitcoin network.
- The first month of 2023 saw the introduction of Bitcoin ordinals to the cryptocurrency world
- Just what are Bitcoin ordinals and how do they work in the cryptocurrency market
- Web3Africa discusses that including how to buy, sell and trade the Bitcoin Ordinals
Casey Rodarmor introduced the Bitcoin ordinals algorithm in January 2023. The protocol permits the inscription of digital assets, such as artwork, onto the Bitcoin network.
Rodarmor intended to create an immutable on-chain presence of a work of art, text, or video. This is as opposed to nonfungible tokens (NFTs) on Ethereum and other blockchains. Rodarmor inscribed a pixel image of a skull as the genesis ordinal on December 14, 2022.
As the ERC-721-based NFT market exploded in 2021, programmer Rodarmor saw a chance to develop a Bitcoin blockchain. This would be a distinctive experience in Bitcoin. Through 2022, he implemented Bitcoin ordinals, his approach based on ordinal theory.
The focus of the ordinal theory however is on satoshis, providing them with unique identities that enable tracking, and movement. Six weeks after the establishment of the genesis ordinal, in February 2023, the hype surrounding ordinals really began.
For a few weeks, the number of inscriptions doubled every week. The figure could have been a bit higher if the infrastructure for inscribing and trading ordinals ought to have been better planned and implemented.
How Bitcoin Ordinals work
Satoshis (sats) are now regarded as atomic units on the Bitcoin blockchain. In their most basic form, ordinals are a system of numeration for sats.
The mechanics of how these ordinals operate are based on the idea of ordinals. An ordinal theory is when the atomic unit (satoshis/sats) is recognized and exchanged separately on the Bitcoin network. One Bitcoin is equal to 100 million Sats. (BTC). An ordinal number is a sat’s unique identification number, which is dependent on the order of mining.
How to sell, buy and trade the ordinals
The trading procedure hasn’t had the same level of tool development as the process of producing the ordinals. Although, there are a few tools to enable one to trade.
The majority of transactions have been made over the counter as Bitcoin ordinals gain in favour. Albeit that, among the first 1,000 inscriptions, collections such as “Planetary Ordinals” and “Bitcoin Punks” were mostly traded without the aid of an NFT platform like OpenSea or Blur.
However, users can purchase and sell Bitcoin ordinals using programs like the Ordinals Wallet, Hiro, and Xverse. Using on-ramp payment plugins, users can purchase some Sats from within the wallet and carry out transactions to buy and trade ordinals.
Tradition NFTs are different from ordinals from a technical design point of view. There are however several features that make the pricing for ordinals a different exercise.
As previously stated, bitcoin ordinals help in identifying satoshis uniquely and store content or artwork on-chain. Ethereum’s ERC-721 standard used in creating NFTs typically holds the metadata or a pointer to the art, generally held off-chain. Some Ethereum NFTs are experimenting with on-chain storage, but they are more of an exception.