Are Bitcoin Ordinals Taking Over NFTs?

Bitcoin Ordinals

TL;DR
Bitcoin Ordinals are similar to NFTs, but are self-contained and fully on-chain. When determining value, inscription numbers and rare sats are both significant factors. Recursive Ordinals can call on data from other Ordinals. There are many new Ordinals collections launching, and some existing collections on other blockchains are also releasing Ordinals items.

The NFT space shifts quickly and right now all the energy is flowing towards Bitcoin Ordinals. Just to recap, Ordinals are information attached permanently on-chain to individual sats (1 BTC is made up of 100,000,000 satoshis), creating unique digital artifacts on the Bitcoin blockchain.

They’re similar to NFTs except that because they’re on-chain (regular NFTs are usually an on-chain pointer to off-chain data), it’s a cleaner, more self-contained and fully decentralized system, and also, Ordinals are on the most valuable and resilient blockchain.

The Ordinals protocol was developed by Casey Rodarmor, who created the first inscription (inscribing is the preferred term for adding data to sats) in December 2022, and there are now approaching 12 million inscriptions.

Low Inscriptions or Rare Sats?

Figuring out which Ordinals are valuable, there are the usual factors: who is the artist or creator, is there a community of collectors, or even just a sense of FOMO? Basically, is there demand for something scarce?

But with Ordinals, there are two other, related ideas: inscription numbers and sat rarity, and there are debates about which of these is more important (hint: they’re both meaningful).

Inscription Numbers

Each inscription has a number, the lower the number, the earlier the inscription, and–if this is our priority–earlier is better. As mentioned, we’re now close to 12 million inscriptions, and the first natural cut-off point where we start to think early, is sub-100K, and you might then place markers at sub-50K, sub-10K, sub-1K… you get the idea.

Rare Sats

An element unique to Ordinals is the idea of rare sats. In art terms, this is like the canvas being as important as the painting it displays (with the canvas being the sat and the paint being the inscribed data).

According to Casey Rodarmor, because we can track when and in what order sats were mined, it follows that some sats will be seen as historically more special than others. These, basically, are rare sats, and if you can get hold of them and put inscriptions on them, then what you create might have additional value.

Here’s Rodarmor’s classification system:

Bitcoin Ordinals

And here’s an alternative system, which has coined the term Satributes, from the Ord.io platform, where you can also check the rarity of sats in your possession:

Bitcoin Ordinals

Recursive Ordinals

There’s recently been a new Ordinals tech development called recursive Ordinals. The idea is that Ordinals can call the content of other Ordinals, and then make use of that data. One simple utility would be that an NFT collection’s traits are inscribed, and then each individual item in the collection calls on those traits to assemble images, which would streamline the amount of code and storage required.

There are far more ambitious possibilities too, which revolve around the idea of inscribed packages of code that can be called on and utilized by developers to build interlinked on-chain applications.

A collection early to this kind of functionality is Cypherpunk Ghosts, which believes in the possibility of building on-chain website-like experiences on Bitcoin. Also take a look at OCM Dimensions and Ordinal Fomojis for experiments with Ordinal recursion.

Bitcoin Ordinals

Key Players

When a new crypto sector accelerates, you find key characters driving the expansion. Looking back at ETH NFTs when they started to blow up, there were Larva Labs, Snowfro and Art Blocks, artists like XCOPY and FVCKRENDR, and collector/influencers such as Cozomo de’ Medici and Punk6529.

Pushing things forward now on Ordinals, there’s Ordinally, who worked with Casey Rodarmor, Udi Wertheimer, who leads the Taproot Wizards collection, and in the arena of rare sat hunting there’s Nullish, who’s creating his own experimental Ordinals ecosystem.

Bitcoin Ordinals
Image credit: Ordinal Maxi Biz

Nullish is also working on the influential ZK Shark’s expanding Ordinal Maxi Biz collection, other important names include Leonidas and BitGod, and for Ordinals chat and to keep up with developments, there’s a regular Twitter Space called The Ordinal Show.

Upcoming Launches

With a lot of Ordinals activity happening, here are a few collections that are either launching or expanding, all of which can make good starting points to explore from:

Rare sats and scratchy artwork from ZK Shark, and set to release newly inscribed Block 9 pieces soon.

Using art and ordinals to broadcast Bitcoin’s original post-fiat cypherpunk message.

A very limited edition art collection making use of sats from the first 1,000 blocks.

100 hand-painted acrylic artworks by artist Resaang, inscribed on sats from Block 78.

There are also projects migrating or branching out from other blockchains, notably DigiDaigaku, ON1 Force, and Okay Bears, which follow on from earlier Ordinals launches by Yuga Labs and DeGods.

Are Ordinals Taking Over?

Everything in crypto moves in cycles, so growth around Ordinals does not suggest that it’s over for Ethereum. Also, Ordinals on Bitcoin may develop into something different from NFTs on Ethereum, and both might come to function in distinct ways.

That said though, statements like this–“in less than 30 days, Ordinals JPEG volume is going to flip ETH JPEG volume”–really don’t sound that implausible. Sure, you might want to expand the time frame out a little and it definitely might not happen, but it’s not a crazy prediction.

Bitcoin Ordinals

The other thing I notice is that despite some Bitcoin Maxis really not liking Ordinals, it feels like Ordinals are reviving part of the original Bitcoin spirit. Bitcoin has always had gravitational pull not just because on an engineering level it works, but because that solid foundation allows it to be irreverent and radiate positive vibes, and in Ordinals right now, you can find that old DGAF, DIY, (cypher)punk energy.

Or that’s how it looks to me anyway, but in case the idea of digital collectibles on Bitcoin still doesn’t sit quite right with you, here are Hal Finney’s thoughts on the idea of crypto trading cards, from way back in 1993.

Crypto trading cards
Are Bitcoin Ordinals Taking Over NFTs? - - 2024

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