Ordinals are the new thing taking Bitcoin by storm. On Monday, February 13, there were 100,000 posts using ordinals, when users flooded the network with images, videos, and other content.
Ordinals, like NFTs, are digital assets denominated in satoshis, the lowest denomination of Bitcoin (BTC). The satoshi script, named after the pseudonymous creator of Bitcoin, Satoshi Nakamoto, is possible thanks to the Rod Root Update launched on the Bitcoin network on November 14, 2021.
What is an ordinal inscription?
Bitcoin developers have been working to bring non-fungible tokens, or NFTs, to the number one blockchain for nearly a decade, starting in 2014 with Counterparty, creators of the Rare Pepe NFT Collection, and then Stacks in 2017. The Inscription process records or inscribes the content data stored in the Bitcoin witness transaction. The witness was introduced in the SegWit update to the Bitcoin network in 2017.
"What the Ordinals team has come up with is genius," said Alex Miller, CEO of Hiro, developer of Stacks' Layer 2 smart contract platform. Decipher in an interview. "It's very much the essence of the bitcoin ethos because they basically took a bunch of different things and put them together in a way that the original creators didn't foresee or expect."
The first step in creating Ordinals is for users to download Bitcoin Core and sync the node to the blockchain. After the sync is complete, the next step is to create an Ordinals wallet and send some satoshis to the wallet.
How did we get to this point?
Launched in 2017, Segregated Witness or SegWit fixed many bugs in Bitcoin Core, allowing for more transactions per block and laying the groundwork for Layer 2 payment channels such as the Bitcoin Lightning Network. SegWit sparked heated debate in the Bitcoin community and led to hard forks of the network, leading to the launch of competing blockchains, Bitcoin Cash and Bitcoin Satoshi’s Vision, also known as Bitcoin SV.
While detractors may believe that Ordinals exploits the network, Ordinals developer Casey Rodarmor says these claims are unfounded.
At the root, all parties to a transaction can cooperate to make these complex transactions look like standard person-to-person transactions. They do this by combining their public keys to create a new public key and combining their signatures to create a new signature. It does this using a device called Schnorr signatures.
The Taproot update also encodes single and multi-signature transactions, making it difficult to identify incoming transaction data on the Bitcoin blockchain. Taproot improves privacy while reducing the amount of data needed to create them, reducing transaction costs that have become much higher as Bitcoin has become more popular.
“One thing people don't understand is that for Bitcoin to be secure, the blocks have to be filled. It's part of the coin's security model,” Rodarmor told Decrypt in an interview. “If the blocks are not full, then there is no reason for anyone to pay more than the minimum fee rate to have their transactions included in the block. So, as a result, the blocks must be filled."
Serial numbers can be a complex process due to the size of the Bitcoin blockchain and the need to use the command line (Windows) or terminal (Mac/Linux).
What's next for the ordinals?
The race is on to develop more efficient methods of fitting into Bitcoin and wallets that allow Bitcoin NFTs to be viewed after they are created.
To create a convenient way for collectors to create ordinal inscriptions, Gamma, a Bitcoin NFT trading platform on Stacks, has begun offering a paid service that allows users to inscribe images and text. Other projects that provide this service include Oridalsbot from the creators of Satoshibl NFT Collection.
Hiro Systems announced on Tuesday that it is rolling out support for Odinals in its Hiro wallet, and on Wednesday, Bitcoin-based web wallet Xverse also launched support for Bitcoin NFTs.