Are Bitcoin Ordinals Back?

TL;DR
Bitcoin Ordinals function like NFTs on Bitcoin, and they appear to be making a comeback, with a big surge in trading volume leading them to overtake Ethereum NFTs. This comes as BRC-20 tokens on Bitcoin have also been making gains, and in some cases have been listed on centralized exchanges. As Ordinals first launched at the start of 2023, in a bear market, but have been developing constantly since then, there is anticipation to see how they perform in bullish conditions.

There’s growing excitement (again) around Bitcoin Ordinals, which are, basically, NFTs on Bitcoin, but with some key differences. Let’s pick up the Ordinals story, along with some related developments in the Bitcoin ecosystem, fill in the gaps since the first wave of hype, and assess where they might be headed from here.

What are Bitcoin Ordinals?

So just to recap, as mentioned, Ordinals are like NFTs for Bitcoin, in that they’re unique digital artifacts on a blockchain, but with some unique characteristics to set them apart:

• Ordinals allow data (such as an image) to be added (or inscribed, as it’s known) onto single Sats. Remember 1 BTC = 100 million Sats, so Ordinals are taking the smallest unit in a bitcoin, and repurposing it to make a unique item.
• The Ordinals protocol was launched by Casey Rodarmor in January 2023. As Rodarmor’s Ordinal Theory enables individual Sats to be numbered in sequence, it also led to a search for rare Sats from specific Bitcoin blocks.
• Ordinals are 100% on-chain and immutable. The data inscribed cannot be changed, and there are no externalities.

That last point, about being on-chain, became a talking point recently after Elon Musk spoke about NFTs on a Joe Rogan episode, criticizing them for only containing links to images stored off-chain. This immediately led the Ordinals community to point out how this isn’t the case with Ordinals, which are always on-chain.

By the way, Elon’s point is largely valid, but isn’t true of all Ethereum NFTs, as there are a few collections that are fully on-chain (including CryptoPunks, Chromie Squiggle and Moonbirds.)

Up to now, there have been 37 million Ordinal inscriptions, all made in under a year, and some earlier inscriptions are, as you might expect, considered more valuable.

Rare Sats

As noted, the Ordinals protocol enabled a search for rare Sats from specific blocks in Bitcoin’s history, and these items are also being traded. What this means is that some creators are choosing the specific Sats they want to inscribe their work onto.

What are BRC-20 Tokens?

For a full view on the Ordinals ecosystem, we also need to be aware of BRC-20 tokens. Unlike NFT-style Ordinal inscriptions, BRC-20s are aimed at using the Ordinals protocol to create fungible tokens on Bitcoin that can function in a similar way to ERC-20 tokens on Ethereum.

The very first BRC-20 token was called ORDI, and there was a lot of excitement this week when ORDI was listed on Binance. Then, very soon after that, KuCoin and Gate.io announced plans to list a BRC-20 called SATS. As these tokens are new and experimental they are, of course, very volatile.

BRC-20 tokens are a whole area of their own to explore, but in relation to Ordinal inscriptions (as in, the digital collectibles), they’re worth following, as increased interest in BRC-20s is linked to increased interest in inscriptions, a correlation we can see happening right now.

Marketplaces and Wallets

The most accessible Ordinals marketplace is the BTC section of Magic Eden, and there’s also Ordinals Market, while Ordinals Wallet is both a wallet and a marketplace. Ordinal Hub is a market aggregator with analytics.

For a straightforward, Metamask-like wallet option there’s Xverse, or alternatively, you could try UniSat, which also has its own marketplace.

And to check in with the latest developments, find connections, and generally keep on top of what’s going on in the Ordinals community, listening to The Ordinal Show will keep you up to date.

Major Ordinal Collections

Prices have been rising recently across the board, with some collections especially picking up interest include Bitcoin Frogs, Bitcoin Punks, and Bitmap.

Of those, Frogs and Punks are straightforward PFP-style drops (the latter an inevitable Ethereum copy), while Bitmaps is a metaverse-style concept, with items representing digital land ownership in a proposed blockchain world.

Generating a lot of hype right now, OnChain Monkey has plans to let holders of its original collection on Ethereum upgrade to an OnChain Monkey Genesis on Bitcoin, from where holders will also receive an Ordinal from a generative art collection connected to the Genesis collection.

Some other well-known collections to keep tabs on include Ordinal Maxi Biz, everything from OG Ordinals experimenter Nullish, and BTC DeGods, but with activity picking up everywhere, it’s really a case of diving in and exploring what’s on offer.

What Will Ordinals Do Next?

Where Ordinals will go from here… nobody knows. This is crypto, after all. But the story so far is that after Ordinals first appeared and gained attention (despite the bear market), and then dropped off the radar for a few months, there’s now a big second surge in activity, with Bitcoin recently overtaking Ethereum in Ordinal/NFT trading volume.

From here, it’s reasonable to think that in a new crypto bull market, and with BTC leading the way, there’ll be yet more interest in the Ordinal/BRC-20 ecosystem, and we should also remember that compared to NFTs on Ethereum, Ordinals have a lot of room to expand.

What’s more, as Ordinals launched at the bearish tail-end of the last crypto cycle–immediately post-FTX and long after market euphoria had evaporated–we still haven’t seen how they’ll perform in a full-on bullish set-up, and now with much more infrastructure built out.

You might rightly point out that all NFTs will perform better in a bull market, but what makes Ordinals special is that they’re on Bitcoin, and Bitcoin really is different.