Bitcoin NFTs? Ordinals Inscriptions Explained (Finding, Buying, & More)

Web3 has been taken over by Bitcoin Ordinals — or so it appears. Since January 21st, when Casey Rodarmor, a software engineer, launched the protocol to the public, the space has been abuzz with excitement. Some are excited about the new upgrade while others swear off Ordinals completely. At the time of writing, there are only 90,000 Ordinals, despite all the publicity.

Why are Ordinals so rare? Most people don’t know how to create or buy Ordinals. There are many opportunities for those who can overcome the barriers. However, it also comes with higher risks. We can help you find, purchase, and store Ordinals safely if you are ready to take the chance and embrace the possibilities of Ordinals. It’s important to first understand some key points about Ordinals that an average NFT enthusiast may not be aware of.

What are Ordinals?

Each Bitcoin is divided into 100,000,000 units, called satoshis or sats. The new Ordinals protocol allows those who run Bitcoin nodes to inscribe each Sat with data. This is called an Ordinal. This data can be inscribed on Bitcoin and include smart contracts. NFTs are possible with this data. In general, Ordinals can be described as NFTs that you can directly mint onto the Bitcoin blockchain.

However, this is not right. This is the shorthand understanding. However, there are important differences between Ordinals and NFTs.

What is the difference between Ordinals and NFTs?

NFTs on Ethereum or an Ethereum Virtual Machine Blockchain often point to offchain data on Interplanetary File System. This is a decentralized file system that’s similar to the Blockchain’s hard disk. It can be modified using dynamic metadata. Some NFT projects can update individual NFT metadata to improve image quality. To get the updated metadata, they might ask holders to use OpenSea’s “refresh metadata” button to obtain a new, better-quality image.

Rodarmor created the protocol to fix a problem in NFT metadata. This ability to modify NFT’s metadata is a sign of a weakness. Rodarmor believes that NFTs are incomplete because they require data off-chain. Ordinals, on the other hand are complete because all data is directly inscribed onto-chain. Rodarmor refers them to as digital artifacts and not Bitcoin NFTs. NFTs are often associated with creator royalties, while digital artifacts don’t. Rodarmor states that Ordinals are intended to reflect NFTs as they are sometimes, and inscriptions as they are by their very nature.

This is to say that Ordinals on Bitcoin could not only be a cultural shift for Bitcoin, but also a technical improvement over NFTs. This is the background to how you can buy, receive, store and manage your first ordinal.

The environmental impact of Bitcoin Ordinals

Large blockchains consume enormous amounts of energy, making Bitcoin the largest by market capital. Bitcoin’s proof-of-work consensus mechanism (PoW), is used to verify transactions and add them onto the blockchain. This is a very energy-intensive process. Because of its size and PoW consensus mechanism Bitcoin is a great choice for energy needs.

A report by the U.S. government in August 2022 estimated that Bitcoin accounts for between 60 and 77 percent of global crypto-asset electricity consumption. What does this mean in terms of energy consumption? Although it’s hard to quantify, Digiconomist reports that Bitcoin and Ethereum combined used over 317 TWh annually in energy. This puts the chains between Italy and the United Kingdom when it comes to electrical energy.

That is a lot energy. However, context is crucial.

Many industries and companies consume more energy than other countries. This is not a unique situation for Blockchain. Bitcoin’s energy requirements are at the lower end of small mining industries such as copper and zinc. Bitcoin’s annual total energy consumption is lower than that of residential air conditioner units around the world and lower than that of data centers around the world (think Apple, Google and Amazon).

Before you suggest that artists should return to selling their artwork on t-shirts in order to make a living, please consider that Ngan Le at Princeton says that the fashion industry currently contributes more carbon emissions annually than all international flights combined.

This doesn’t necessarily mean that NFTs and blockchain don’t have an impact on the environment. However, the harsh criticisms are often exaggerated and miss the context.

The most famous Ordinals inscriptions

Ordinals was born quickly. Within weeks of going live, amazing collections emerged and sales were phenomenal. Some pieces sold for hundreds of thousands of dollar. Ordinal Punks was one of the most prominent projects that emerged in those early days. Ordinal Punks is a collection of 100 Bitcoin NFTs that were created in honor of CryptoPunks. It was created within the first 650 Bitcoin Inscriptions. This Inscription is #642.

Credit: Ordinal Punks

Taproot Wizards is the next step. This project, which began with Inscription #652, is an Ordinal collection hand-drawn NFT Wizards that Udi Wertheimer, a Web3 developer. This project is so special. It is believed to be the largest transaction and block in Bitcoin history, at 4MB.

On the other side of this coin is the Ethereum-based collection OnChainMonkey. Inscription 20,219 was the result of the team turning 10,000 Ordinals into one Inscription. It is now one of the most popular 10k Bitcoin collections. OCM team points out that the Inscription’s size is less than 20,000 bytes. This makes it a flexible model that other collections can use to create NFTs via Bitcoin.

Ordinals inscriptions, however, are still very young. We will see many other new collections emerge as the Ordinals market matures. Keep up to date with the latest news. Here’s a list of the top Bitcoin NFT artists and projects you should be following.

How to trade and buy Ordinals

Step 1: Find the right wallet

Ordinals can’t be stored in a browser wallet such as MetaMask. To receive Ordinal Inscriptions, you will need to set up a Bitcoin wallet with enough customization. Sparrow is a good example of this.

  • Sparrow Wallet is the best place to start.
  • Click the link to download the file that is associated with your operating system.

Step 2: Create your wallet(s).

Sparrow wallet, a desktop application, is compatible with Ordinals. It only requires a few steps. To make an Ordinal-compatible wallet, you will need to download Sparrow. Follow this tutorial on Github. This guide will show you how to send Bitcoin to and from the Ordinals wallet. This wallet can only be used to receive Ordinals. You may accidentally send BTC to this new Ordinals wallet.

Once you have set up your wallet, there are three options to get an Ordinal.

  1. You can run a node to inscribe an Ordinal by yourself.
  2. Locate an Ordinal owner to buy directly.
  3. You can use a service to inscribe an ordinal without having to run your own node.

We won’t get into the technical details of running Bitcoin nodes. We can safely assume that you are able to figure this stuff out if you have your own node. Let’s now focus on the second option, keeping in mind this is very risky and new. It is not yet possible to trade on major Ordinals markets so it is important to be cautious and trust.

Step 3a: Search for Ordinals to Buy

Ordinals is currently OTC (or over-the-counter) trading.

  • Join the Ordinals Discord channel to find Ordinal projects.
  • You can find out what projects are available by visiting the link-your project channel.
  • You can purchase your Ordinals from the channel where collection creators link to their Discords.

Important note: You will need to violate almost all rules you have ever heard about not being scammed in Web3 by buying Ordinals OTC. This could include having to connect with people via Discord, sending money before you receive an Ordinal, and conducting direct transactions with others. This is why caution is so important. You should only take on what you can afford to lose.

Step 3b: You can use a service to create an Ordinal.

Many services exist that can inscribe Ordinals for those who don’t want to set up a Bitcoin node but still wish to create their own Ordinal.

  • The Satoshibles NFT collection has created Ordinals Bot. This will inscribe an Ordinal for you.
  • Gamma also offers Ordinal Inscription Service.

These services will require you to give the BTC address where your Ordinal would like to be delivered. Your Sparrow-created Ordinal wallet address will be used. You will also be provided with the amount of sats and a fee for the transaction, along with an address to which you can send the BTC. Depending on the size of your file, transactions can cost less than $50 in BTC or several hundred dollars.

If you send the BTC and everything goes according to plan you will not receive your Ordinal in seconds or minutes. It can take several hours or even days.

It is risky and arduous, but it also has a lot of potential

You can see that if you want early access to the Ordinals market, like being “out of bed before rooster crows”, you will need to put together a series of tedious tasks in order to achieve this. It could be worth it. Be careful, and take the time to learn as much as you can before moving forward. Ready to dive deeper? We recommend that you go directly to Rodarmor’s Ordinal Theory Handbook.

The post Bitcoin NFTs appeared first on nft now. The post Ordinals Inscriptions Explained: Finding, Buying & More appeared first on NFT Now.

Did you miss our previous article…

Recommended For You

About the Author: MagNews