Everything You Need to Know About Bitcoin Ordinals

Bitcoin ordinals are revolutionizing blockchain usage by enabling the permanent inscription of digital content such as images and games directly onto Bitcoin, thereby opening new avenues for digital expression and ownership.

Definition of SATOSHI

Before delving deeper, it’s important to understand what a satoshi is. A satoshi, being the smallest unit of Bitcoin, is analogous to cents for the euro. Just as a euro is divided into 100 cents, allowing for precise transactions suitable for small values, a Bitcoin is divided into 100 million sats. This subdivision enables very precise transactions within the Bitcoin ecosystem, facilitating the exchange of small amounts of value in a manner similar to using cents to settle small purchases in everyday life. In the context of Bitcoin ordinals, if we think of sats as cents, ordinals transform them into super special cents, where each tiny cent can tell its own story or display its own image. It’s like giving each cent the possibility to become a mini collectible or a mini work of art.

Ordinal Protocol – Inscriptions on Bitcoin

Launched in January 2023 by Casey Rodarmor, the ordinal protocol marks a revolution in the use of the Bitcoin blockchain. This protocol allows for the registration of various digital contents directly onto satoshis, thus transforming each satoshi into a unique digital artifact. Inspired by the rising popularity of NFTs in 2021 on the Ethereum blockchain, Rodarmor designed the ordinals to give each satoshi a distinct cultural and artistic value, thus ensuring infallible traceability and a new form of digital expression on Bitcoin.

Transformation of Satoshis

Each satoshi becomes a potential medium for a variety of digital data, ranging from simple images and texts to more complex multimedia contents like audio clips and videos. This inscription capability radically transforms the nature of satoshis, turning them from mere units of value into vectors of personal expression and creativity.

Diversity of Inscriptions

The spectrum of possible inscriptions is broad and varied. Users have already begun to utilize this new feature to inscribe an astonishing range of content:

• Images: From digital artworks to photographs, images are among the first types of content to be inscribed, offering a new form of immutable art gallery.
• Audio: From musical clips to voice recordings, audio enriches the blockchain with new sound dimensions.
• Video: Although more complex to inscribe due to their size, videos are also beginning to appear, opening the door to unprecedented narrative forms on Bitcoin.
• Games: The inscription of games, like a playable version of Doom, demonstrates the playful and interactive potential of ordinals.

Technology and Potential

Fundamentally, the ordinal protocol is based on recent technical improvements in the Bitcoin blockchain, such as SegWit and Taproot, which have optimized block space and facilitated the storage of complex data. These technological advancements have not only made inscriptions possible but also economically viable by reducing the costs associated with recording large amounts of data.

NFT vs Ordinals: An Enlightened Comparison

Non-Fungible Tokens (NFTs) and Bitcoin ordinals have revitalized the debate on digital ownership, each introducing a unique perspective on how digital assets can be created, exchanged, and valued. While they share the concept of digital asset tokenization, they present fundamental differences in their approach and implications for users and the blockchain.

Technological Foundation:

• NFTs: Primarily created on blockchains like Ethereum, NFTs use standards such as ERC-721 and ERC-1155 to represent ownership of digital assets. These tokens often point to off-chain stored data, such as images or videos, hosted on servers or decentralized file systems.
• Ordinals: Specific to the Bitcoin blockchain, ordinals directly inscribe digital content onto the blockchain, utilizing each satoshi as a unique medium for data such as images, text, or even games. This approach ensures that the digital asset itself is immutable and inseparable from the blockchain.

Immutability and Storage:

• NFTs: The immutability of NFTs often depends on the permanence of the referenced off-chain data. If these external data change or disappear, the NFT can lose its value or original content.
• Ordinals: With ordinals, the digital asset is entirely stored on the blockchain, enhancing its immutability. Each inscription is permanently linked to a specific satoshi, making the asset indelible and immune to external changes.

Conclusion

Ordinals open a new horizon for Bitcoin, demonstrating its capacity to serve as a platform for digital ownership and artistic expression, beyond its traditional role as a store of value. By exploring the possibilities offered by inscriptions on Bitcoin, we embark on a journey towards the future of the blockchain, where art, culture, and technology converge in unprecedented ways, redefining what it means to own and exchange value in the digital world.