What are Bitcoin Ordinals? A Comprehensive Overview

Bitcoin Ordinals have taken the crypto world by storm. Currently, over ten million Ordinals have been minted and counting.

Introduced on January 20, 2023, Ordinal NFTs revolutionized the creation of non-fungible tokens (NFTs) by leveraging the power of the Bitcoin blockchain. Although the concept of generating NFTs on Bitcoin has been explored before through platforms like Counterparty and Stacks, BTC Ordinals introduces an innovative architectural framework that reshapes the network's capabilities.

But what are Bitcoin Ordinals, and how do they work?

What are Bitcoin Ordinals? A Comprehensive Overview

The Bitcoin Ordinal meaning is simply a method of creating Bitcoin NFTs by attaching arbitrary data to an individual “satoshi” or “sat.”

Arbitrary data can be anything, including an image or a video, making them relevant to the NFT movement.

Unlike previous incarnations of Bitcoin NFTs, Ordinals do not exist on a layer distinct from the Bitcoin blockchain. Instead, they utilize an ordering system known as the Ordinal Theory, which assigns a unique number to each Bitcoin satoshi.

Due to this minting method, Ordinals are native to the Bitcoin blockchain. They do not rely on making changes to the Bitcoin protocol or creating extra layers. Furthermore, they are backward compatible.

Additionally, it's worth exploring the concept of the Bitcoin Ordinal value. Although each NFT can possess its distinct assigned value, it is crucial to understand that a satoshi represents 1/100,000,000th of a single Bitcoin unit. This implies that a satoshi always retains its worth as the smallest conceivable denomination of Bitcoin, regardless of the prevailing value at any given time.

So, how is this relevant to NFTs?

Ordinals are permanently stored on the Bitcoin blockchain directly without any additional layering. The metadata that makes each NFT what it is is packaged within the transaction. The BTC Ordinal protocol enhances what is possible by utilizing Bitcoin’s native blockchain features, including decentralization and enhanced security features.

The History of Bitcoin Ordinals

Minting Bitcoin NFTs was always complex because alternative tools were needed to bring NFTs to the world’s number one blockchain.

The revolution began in 2014 with Counterparty, which the creators of the NFT collection Rare Pepe developed. This was followed by Stacks in 2017. However, Ordinals did not truly come into being until the development of two critical updates: Segregated Witness (SegWit) in 2017 and Taproot in 2021.

Before delving into these updates, it is essential to note that their primary intention did not revolve around unlocking the potential of Bitcoin NFTs. Instead, their emergence was an unintended consequence stemming from two updates that significantly expanded the capacity for storing arbitrary data on the blockchain. As a result of these updates, the upper limit for data storage increased substantially, enabling the preservation of various assets ranging from high-resolution images to valuable in-game items.

In other words, Bitcoin Ordinal NFTs were an unintended side effect of these updates.

SegWit

The initial step forward for Ordinals began with SegWit in 2017. This update provided a soft fork for Bitcoin’s blockchain by segregating Bitcoin transactions into two sections. The key part of each transaction is the “Witness Data” section.

Witness data, or “Signature Data,” can support arbitrary data, which radically changes the architecture of each transaction. Under SegWit, transactions and signature data are split into separate sections. But what difference does this make?

SegWit’s update was created to:

• Bypass the original block size limit.
• Allow arbitrary data to be transmitted.
• Prevent unintended transaction malleability.

From a technical standpoint, SegWit removed the requirement to include witness data, typically the sender’s digital signature. Instead, extra space for witness data was added as a separate part of the block. It was an ingenious update that enabled storing large amounts of data that would have otherwise surpassed the block size limit of the time. Plus, no hard forks were required.

This update was the precursor for BTC Ordinal Inscription because of the expanded arbitrary data limits per transaction.

Taproot

Whenever someone asks, “What is a Bitcoin Ordinal?” most guides point to the Taproot upgrade of 2021. This upgrade did much more than SegWit, impacting the entire Bitcoin blockchain.

Again, Taproot’s priority was not to enhance Bitcoin NFTs. Instead, Taproot upgraded Bitcoin’s security, scalability, and privacy. The side effect was that storing witness data became simpler and loosened the Bitcoin blockchain’s data limitations.

Crucially, this upgrade enhanced smart contracts on the Bitcoin blockchain, including time-locked contracts, often incorporated into witness data.

So, why did this enable Ordinals further?

These changes were vital because NFT data is often stored within script-path spend scripts. Storing and structuring arbitrary witness data overnight became easier, eventually leading to the “Ord” standard.

The blockchain has reached a stage where a single block can accommodate a substantial 4MB of data, greatly expanding the range of media types that can be stored. This development has ushered in a groundbreaking era where the direct storage of intricate NFTs on the blockchain has become a practical and feasible reality for the first time.

How Do Bitcoin Ordinals Work?

The Bitcoin Ordinal definition can be tricky to unpack for those new to the NFT scene. To properly grasp how Ordinal NFTs function, it is vital to distinguish between the twin concepts of Ordinals and Inscriptions.

While some guides use the term interchangeably, they are two distinct concepts. The definitions you need to know are:

• Ordinals – This system for ordering satoshis allows the data stored on-chain to become non-fungible, which is a necessity for all NFTs because, without them, there is no uniqueness to each NFT as each would be indistinguishable from another.
• Inscriptions – A BTC Ordinal Inscription relates to the content of each NFT. This could be any type of arbitrary data.

The simplest way to understand these NFTs is to compare them to non-Bitcoin NFTs, which are unique. Each traditional NFT comes with a tokenId and its metadata.

Token Id

Fungible tokens are the same. For example, all cryptocurrencies are considered fungible tokens because there are no means to tell one coin from another.

Token Ids remedy this situation by assigning a unique barcode to each token. Every NFT has a unique token that enables you to differentiate your NFT from another NFT, even if its metadata is identical.

A token Id makes NFTs what they are.

Token Id and Ordinal Theory

The innovation behind Ordinal NFTs is that they provide a unique numbering system for every satoshi.

Technically speaking, each Ordinal is nothing more than a satoshi that has received a unique number. Under Ordinal Theory, every satoshi has a number defined by the order in which it was mined.

For example, the first satoshi was minted back in 2008. Although satoshis may have passed through hundreds of different hands, the order remains the same because of its unique number. Yet Ordinal Theory does not impact Bitcoin fungibility because Bitcoin’s native protocols do not recognize the ordering system, meaning Ordinals can be fungible and non-fungible.

Instead, the creators of Ordinal Theory have built tools to execute the ordering system.

Metadata

Metadata is the core content of any NFT. In non-Bitcoin blockchains, metadata is an optional attachment of arbitrary data. It could be an image, video, video game, or profile picture. It’s the metadata that has become synonymous with the NFT concept.

Metadata and Inscriptions

Unlike traditional NFTs, metadata has no designated position within Ordinals. Ordinal NFTs hold metadata within each transaction’s witness data.

This functionality is where the concept of a Bitcoin Inscription arises. The metadata is inscribed within a specific area of each transaction within the Bitcoin blockchain.

So, how are they minted?

Specific satoshis are inscribed with data by sending an individual satoshi to a wallet compatible with Taproot. NFT creators must attach all of the metadata within the transaction. This is simpler today because various tools exist to automate the process.

It’s why even non-technical users can build their own NFTs, which is also why observers expect NFT adoption to grow further.

Bitcoin Ordinal NFTs vs. Traditional NFTs

The primary difference between Ordinal NFTs and traditional NFTs is their fluidity. The fact that the Bitcoin protocol offers no formal recognition of Ordinal Theory means that Ordinals can function as fungible or non-fungible tokens.

The owner of the Ordinal decides on the fungibility aspect of the token.

This means a Bitcoin user can use an Ordinal and its data like any other cryptocurrency token. They can be fungible, meaning they can be used to pay for network fees or sent as a form of payment. However, even when used this way, the arbitrary data is never detached from the satoshi.

This contrasts with Ethereum NFTs, which are different from Ethereum cryptocurrency. As they are distinct, they cannot be mixed up or combined, as the Ethereum blockchain treats them differently.

Likewise, Ordinal NFTs can remain as non-fungible tokens and trade like any other type of NFT with the same simplicity as traditional NFTs. This flexibility represents a massive breakthrough for NFT and blockchain adoption.

Are Ordinal NFTs the Way Forward?

Ordinal NFTs have become so popular that the Bitcoin community is split over the role of Bitcoin and whether these NFTs are a step forward or a potential threat.

Some detractors have argued that Bitcoin should remain a hub of secure financial transactions. They blame the rise of Ordinal NFTs for rising transaction fees because they are rapidly filling up Bitcoin’s blockchain. However, others are delighted with the added functionality that Ordinal NFTs have brought to the space.

Ordinals bring several core benefits to the table, such as:

• Security
• Liquidity
• Exclusivity, due to Bitcoin’s maximum supply
• Ready-to-use
• Clear royalty model for creators
• Expanded use cases
• Increase in mining
• Offers complete “digital artifacts.”

Regardless of where Bitcoin enthusiasts stand on the debate, reversing Ordinals and returning to Bitcoin’s previous state would require a massive update to the protocol. Despite the grumbles about increased transaction fees, the benefits of Ordinals mean that there is no convincing argument to reverse them.

Undoubtedly, Bitcoin Ordinals have firmly established their presence and are poised to gain even greater strength in the future.

How to Get Bitcoin Ordinals

One of the most common questions is, “What are Bitcoin Ordinals, and how do I get them?”

Much like the minting process, the trading process lacks the mature tools needed to make the process simple and effortless. While several tools automate the minting process, the niche continues progressing through its initial growth phases.

For example, popular Ordinals like “Bitcoin Punks” and “Planetary Ordinals” lacked any formal marketplace to obtain them. In other words, unless you knew the creators, you were likely unaware of their existence.

But several platforms have made adding Bitcoin Ordinal tokens to your collection simpler than ever. One such option is FreeNFT.

Our platform offers you the opportunity to acquire a diverse range of free NFTs, including coveted Bitcoin Ordinals, through enticing giveaways and various airdrops. Now, let's delve into the process of kickstarting your journey toward obtaining your initial collection of Ordinals crafted by renowned creators in the industry.

• Step One – Sign up for FreeNFT.
• Step Two – Create your digital wallet to hold your NFTs.
• Step Three – Connect your wallet to the FreeNFT platform by clicking on the button in the header.
• Step Four – Register for any projects you are interested in. You may be prompted to provide your digital signature to verify that you are the genuine owner of your digital wallet.
• Step Five – Follow any additional signup instructions, such as completing a captcha or following certain Twitter accounts.

Through FreeNFT, you can obtain a free NFT instead of spending your hard-earned crypto on different NFT marketplaces. Both traditional NFT and Ordinal NFT giveaways are available, so keep checking back to learn about the latest giveaways.

Join the Free NFT Movement

No matter where you stand on the Ordinals vs. traditional NFTs debate, Ordinal NFTs are here to stay and have already become a significant facet of the NFT revolution.

As Ordinals become more refined and further upgrades increase the functionality of these NFTs, it is expected that adoption will increase as time goes on. At FreeNFT, you can gain a headstart on the competition by indulging in the industry’s best-kept secret.

Sign up for FreeNFT in just a few minutes and get the chance to obtain free NFTs from the industry’s leading creators to store in your wallet. If you have any questions, get in touch with FreeNFT now.