Introduced on January 20, 2023, Ordinal NFTs are the latest way to create NFTs on the Bitcoin blockchain. Bitcoin-based NFTs have existed for some time, but regular NFTs offer a unique architecture that distinguishes them from other Bitcoin NFTs. They have been popular since their launch, with over 200,000 regular NFTs minted by a growing community of users, developers, and enthusiasts excited about the possibilities of native Bitcoin NFTs.
So what exactly are they and how do they differ from regular NFTs? Let’s dig deeper in our blog post.
What is Ordinal NFT?
Ordinal NFT allows you to embed various types of media directly into individual Satoshi, the smallest unit of Bitcoin. Unlike traditional NFTs, which represent complete tokens, regular NFTs assign unique ownership and metadata to individual satoshis. This fine-grained level of tokenization increases flexibility and opens up new opportunities for digital ownership and provenance within the Bitcoin ecosystem.
To achieve this, we assign a unique number to each Satoshi using an arbitrary but logical ordering system, Order Theory. This means that regular his NFTs are native to Bitcoin and require no changes to the Bitcoin protocol or additional layers. They are designed to be compatible with the existing Bitcoin network. Satoshi, also known as ‘sat’, represents the smallest unit of Bitcoin and is equivalent to 1/100 millionth of a single Bitcoin.
History of regular NFTs
Ordinal NFT was made possible by order theory, but its implementation was made possible by two Bitcoin protocol updates: Segregated Witness (SegWit) in 2017 and Taproot in 2021. These updates unintentionally expand block space for arbitrary data storage, enabling images, videos, and games. It will be included in the normal NFT. These changes facilitate the development and use of regular NFTs on the Bitcoin blockchain.
Segregated Witness (SegWit)
Introduced in 2017 as a soft fork of the Bitcoin blockchain, Segregated Witness (SegWit) brought significant changes to the transaction structure. We separated the transaction data from the witness (signature) data and created a separate section called witness data. This update was intended to address issues such as block size limits, allow for optional data transmission, and prevent unintentional transaction changes.
With SegWit, witness data (e.g. digital signature) directly within the transaction itself. Instead, another structure for witness data was added to the end of the block. This design allows the inclusion of arbitrary data within the watch section and introduces a discounted “block weight” mechanism to keep the data within the block size limit without requiring a hard fork.
The implementation of SegWit is an important step towards regular NFTs as it expands the capacity to include arbitrary data in transactions. This innovation has paved the way for future development of regular NFTs that take advantage of the increased flexibility in storing media files such as images and videos within the Bitcoin blockchain.
taproot
Implemented in November 2021, Taproot was a comprehensive upgrade designed to enhance Bitcoin’s privacy, scalability and security. Among its improvements, Taproot has introduced a more efficient system for storing arbitrary witness data and relaxed limits on the amount of arbitrary data that can be included in a Bitcoin transaction. Initially focused on powering smart contracts like time-locked contracts, Taproot’s changes helped enable regular NFTs.
Regular NFTs utilize Taproot’s script path consumption scripts to store NFT data. This upgrade streamlined the structuring and storage of arbitrary witness data and provided the foundation for the ‘ord’ standard. In addition, the data requirements have been relaxed, allowing a single transaction to fill an entire block with both transaction and monitoring data, up to the block size limit of 4 MB. This capacity expansion opens up the possibility of incorporating a wider range of media types directly onto the blockchain, further enhancing the potential of regular NFTs.
How do Bitcoin NFTs work?
To understand the function of ordinal NFTs, it is important to distinguish between the terms “ordinal” and “inscription” used in reference to this new form of Bitcoin NFT.
Ordinal refers to a system that organizes individual Satoshi in a way that establishes the essential “non-fungible” properties necessary to create NFTs. They provide a means of uniquely identifying and ordering these satoshis.
On the other hand, the inscription will contain the actual content of the regular NFT. This includes elements such as images, text, video, or any other data that users typically associate with NFTs. Inscriptions can be thought of as the equivalent of token IDs and metadata found in non-Bitcoin NFTs.
To better understand regular NFTs, it may be helpful to draw parallels with non-Bitcoin NFTs. Like non-Bitcoin NFTs, regular NFTs are separate and unique tokens. However, ordinal NFTs rely on ordinal numbers for uniqueness and inscriptions for specific content, instead of using tokenIDs and metadata.
What are ordinal inscriptions?
For nearly a decade, Bitcoin developers have been working to integrate non-fungible tokens (NFTs) into the Bitcoin blockchain. This journey began in 2014 with his introduction of Counterparty, which allowed him to create NFTs like the Rare Pepe collection. Then in 2017, Stack emerged as another solution for his NFTs based on Bitcoin.
The registration process is responsible for writing or recording content data in the witness section of Bitcoin transactions. This witness section was first introduced as part of his Segregated Witness (SegWit) upgrade in 2017 aimed at improving the Bitcoin network.
To create Ordinals, users need to download Bitcoin Core and sync their nodes with the blockchain. Once synced, the next step is to set up your Ordinals wallet and transfer Satoshi (the smallest unit of Bitcoin) to that wallet. This lays the groundwork for engaging with Ordinals and participating in the creation of Bitcoin NFTs.
Conclusion
In conclusion, regular NFTs represent a new way to create non-fungible tokens on the Bitcoin blockchain. Developed through the conceptualization of order theory and made possible by Segregated Witness (SegWit) and the taproot update of the Bitcoin protocol, sequential NFTs offer a fundamentally different architecture compared to other Bitcoin NFTs.
In regular NFTs, media types such as images and videos can be embedded in individual Satoshi, the smallest unit of Bitcoin. Unlike previous Bitcoin-based NFT solutions that relied on separate layers and networks, regular NFTs are completely native to the Bitcoin blockchain. It is backwards compatible with the network as it does not require changes to the Bitcoin protocol or additional layers.
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