Ordinals–a new buzz word in the crypto space and one that garnered much attention in the past month. But what are Ordinals and how do they work?
Ordinals is a new protocol deployed on Bitcoin to create non-fungible inscriptions on each Satoshi.
Here’s how it works:
Each Bitcoin has 100,000,000 smaller units called satoshis – abbreviated as sat.
Ordinals allow every node user to make inscriptions on the satoshis that includes information such as images, videos, and HTML.
How is this significant to Bitcoin users? Most of the past solutions for NFT’s and other related projects have made it possible through sidechains and side tokens. With Ordinals, the inscription of data happens entirely on-chain. Casey Rodarmor – the software engineer behind Ordinals – created the project to deploy smart contracts on Bitcoin increasing the value of Bitcoin by creating new use cases.
Rodarmor explains his solution as completing what was before incomplete. NFT’s on Ethereum, for example, are “incomplete” because the data is often stored off-chain. With Ordinals the data is directly inscribed on-chain making an NFT exactly what it should be, “Non-Fungible.”
Do Ordinals damage Bitcoin?
Despite this improvement to Bitcoin, NFT’s, and blockchain technology, the controversy is whether or not Ordinals helps or hurts Bitcoin and the Bitcoin community. Some see it as a technological advancement bringing more value and eyes to Bitcoin which will help it growth, while others including many “Bitcoin maximalists” – a group of people who think all crypto and DeFi outside of bitcoin is a scam – say its a waste of block space and a network fee increaser thats only purpose is for some collectors to store their “Silly pictures” on the most popular and biggest blockchain network.
Bitcoin has found a wide-eyed group of innovators now, and even with the controversy there have been close to 140,000 inscriptions to date on Bitcoin following the introduction of Ordinals.
Ordinals is just the latest catalyst in Bitcoin’s history, but any technological improvement on blockchain and its usecases will increase the value of the network.