Bitcoin ordinals, also known as digital artifacts, are a way of writing digital content to the Bitcoin blockchain. They were introduced in January 2023 by Casey Rodarmor, programmer and artist, who saw an opportunity to create a unique experience on the Bitcoin blockchain similar to non-fungible tokens (NFTs) on Ethereum and other blockchains.

What are Bitcoin ordinals?

Bitcoin Ordinals is a system for numbering and tracking individual satoshis (the smallest unit of Bitcoin), turning them into non-fungible tokens (NFTs). Ordinals are based on ordinal theory, which gives satoshis individual identities and allows them to be tracked, transferred, and imbued with meaning.

The Ordinals protocol assigns a unique number to each satoshi based on when it was drawn. Smaller numbers correspond to older satoshis. As transactions occur, the Ordinals protocol tracks each satoshi through subsequent transactions on a first-in, first-out basis. The identification numbers of the satoshis are called ordinal, since both the identification and the tracking mechanism depend on the chronological order of creation and transactions.

How do Bitcoin ordinals work?

Ordinals simply refer to the satoshi numbering and tracking system. Each satoshi is assigned a unique identification number when they are created (mined), which can be traced through each subsequent transaction. Each satoshi identified by the ordinal protocol can also be called an ordinal.

The ordinal protocol assigns a number to each satoshi based on the order in which it was created, called an integer. It also assigns a decimal based on the position of the satoshi in the block height of your Bitcoin block. Finally, your position in the entire Bitcoin supply is expressed as a percentile, and your name is assigned by the letters a-z. The names of the satoshis get shorter as time goes by, so the last satoshi drawn will be “a”.

After a satoshi has been identified by the Ordinals protocol, users can enroll a satoshi with arbitrary data to give it its unique characteristics, defined as a digital artifact. Writing arbitrary data to a satoshi was only possible after SegWit (2017) and Taproot (2021) upgrades to Bitcoin Core.

How to buy, sell and trade ordinals?

Like the Bitcoin Ordinals minting process, the trading process has not had mature tools. However, there are some tools to exchange these digital artifacts. As Bitcoin Ordinals grows in popularity, most trades have largely been done over the counter. However, tools like Ordinals Wallet, Hiro, and Xverse allow users to buy and sell Bitcoin Ordinals.

ordinal portfolios

Ordinal wallets provide an easy way to store and collect digital artifacts created with ordinals. These are some of the trusted Ordinal wallets:

The Ordinals Wallet – Launched on February 16, 2023, the Ordinals Wallet is a Bitcoin wallet that allows users to hold, store, view, transfer, send, enroll, and buy and sell Ordinals directly from within the wallet. It has a user-friendly interface and is a community funded project.

Hiro Wallet – Launched on February 14, 2023, the Hiro Wallet allows users to securely store, send and receive Bitcoin, and create and store Ordinal NFT enrollments in minutes. It is compatible with popular Ordinals platforms such as Gamma, OrdinalsBot and other emerging applications, allowing registration directly in the web browser.

Ordinals vs. Traditional NFTs

Ordinals are different from traditional NFTs from a technical design perspective. There are several features that make ordinal pricing a different exercise. Bitcoin Ordinals help to uniquely identify satoshis and have content or art stored on-chain. Ethereum’s ERC-721 standard, which is used to create NFTs, typically contains the metadata or a pointer to the art, which is typically kept off-chain. Some Ethereum NFTs are experimenting with on-chain storage, but they are more of an exception.

Future of Bitcoin Ordinals

Bitcoin Ordinals is a new technology and the use cases for them continue to grow. They have been used to transfer NFT collections from Ethereum (and other chains) to Bitcoin, but unique projects are also starting to claim digital artifacts tied to the original cryptocurrency. As demand from common users and followers increases, the ecosystem and tools should begin to mature with more user-friendly tours.

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