Ordinals Inscriptions are a revolutionary new way of creating non-fungible tokens on Bitcoin's blockchain. With the launch of the Ordinals protocol in January 2023, users can explore, receive, and transfer individual satoshis that hold unique data, such as videos and images. This cutting-edge method of minting NFTs places the entire token content directly on the blockchain, providing a new level of transparency and accessibility for digital assets.
All digital artifacts are NFTs but the vast majority of NFTs are not digital artifacts. Digital artifacts are held to a higher standard, truer to their ideal. For an NFT to be a digital artifact, it must be immutable, on-chain, unrestricted, and decentralized.
The creator of this new standard, Casey Rodarmor, believes NFTs have negative connotations, so he prefers to refer to them as "digital artifacts." Ordinal NFTs or Digital Artifacts use ordinal theory to monitor and mark content/data, also known as "inscriptions," on the blockchain. These unique tokens are set to change the way we think about and use digital assets.
Ordinals are numbers that define a specific place in a sequence, such as first, second, and third. In the world of Bitcoin, an ordinal takes the form of an unspent transaction output (UTXO) associated with a specific Satoshi. This Satoshi holds a unique "inscription" containing the content of the NFT, such as images, text, or even an MP3 file.
By marking these inscribed satoshis as special transactions, users can quickly identify and track them. This innovative solution was first proposed in the Bitcoin forum as far back as 2012, demonstrating the long-standing interest in using ordinals to enhance the capabilities of Bitcoin.
Differences Between Ordinal NFTs and Ethereum-Based NFTs
Ordinal NFTs offer a unique approach to NFTs on the Bitcoin blockchain by leveraging two recent innovations: the segregated transaction witness section of a Bitcoin block and tapscripts, a scripting function made possible by the Taproot update. This allows for the entire content of the NFT, including images and videos, to be stored on-chain, unlike other NFT standards that only store a link or reference.
This storage method eliminates the data limit of 80 bytes in Counterparty NFTs, as Ordinal NFTs have no data limit besides the transaction witness field's 4 MB data limit. Additionally, storing data in the witness field of a SegWit transaction is cheaper due to the "witness discount" effect, making Ordinal NFTs a more cost-effective option.
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