Bitcoin Ordinals and Inscriptions: the Future of Bitcoin Collectibles

The growth of Bitcoin NFTs, also known as Ordinals or Inscriptions, took off in January with great excitement. This development represents a revolutionary new concept in the evolution of digital art and collectibles, and the numbers tell the story. Since December 14, 2022, the number of Ordinals has grown from one to 10 million. Bitcoin Ordinals and Inscriptions are having a major impact on the future of Bitcoin collectibles.

The impact of this global technology shift may change the perception of Bitcoin, NFTs, and other altcoins like Ethereum. Inscriptions and Ordinals add huge value to the Bitcoin blockchain and create game-changing opportunities for NFT creators, collectors, and investors. This is big because some people think Bitcoin and NFTs aren't useful or just a fad.

You've probably heard some version of "NFTs are just overpriced JPEGS bought with magic internet money." But what if Bitcoin provides the value and base utility to move the world forward? I’ll talk more about this later.

What are Bitcoin Ordinals?

Bitcoin Ordinals are digital carvings embedded on the Bitcoin blockchain. Each of the Inscriptions engraved on-chain can then be linked to an Ordinal. This provides a way of assigning unique identifiers to satoshis, the smallest unit of a Bitcoin.

A single, unique satoshi (sat) represents 1/100,000,000 of a whole Bitcoin. Inscriptions are a way of adding metadata to satoshis. This metadata can include anything from text to images, and it can be used to store information about the satoshi or its owner. This allows satoshis to be used as digital collectibles, with each satoshi having its own unique value. Let's look at why this matters for creators and collectors.

Why are Bitcoin Ordinals important?

The introduction of Bitcoin Ordinals is a significant development for artists and collectors. For the first time, digital artists can create and promote their work on the world's oldest and most secure distributed ledger. Collectors can browse and buy digital assets with greater security. Furthermore, there are no middlemen or third parties necessary to do the deal.

New use cases spark interest and increase adoption. The NFT market has expanded 10-fold since 2021, and adding the ability to store NFTs on the most dominant blockchain in the world is a game-changer. Experts predict the surge in demand for Bitcoin Ordinals isn't just a temporary trend and it will continue to grow in the future.

A recent report by Galaxy Research noted that the Bitcoin NFT ecosystem could become a $4.5 billion market by 2025. The authors predict that a complete range of products and services targeting this expanding market will be available this summer.

“In just two months, wallets have already begun to offer the necessary support to improve user experience and marketplaces are already emerging.”

Text-based inscriptions, now popularized as the BRC-20 token standard, have been the main cause of the massive uptick in Ordinals inscriptions on the Bitcoin blockchain. As highlighted by Glassnode co-founder and chief technology officer Rafael Schultze-Kraft on Twitter, text-based inscriptions are now the most popular form of Ordinals inscription, with more than 2.8 million text-based inscriptions as of May 5.

Real examples of Bitcoin Ordinals

A "smart contract" is a bit of code that operates automatically when certain pre-programmed conditions are met. Bitcoin doesn't have the robust strength of Ethereum in this area.

However, Magic Eden's marketplace for Ordinals makes it possible to trade Bitcoin NFT collections without resorting to over-the-counter (OTC) methods. This is because all relevant NFT information can be exchanged through Magic Eden's platform. In addition, Ordinals can be used for a wide variety of on-chain activities, including profile pictures, video-based apps, games, and more.

DeGods NFT is one of the most traded Ordinals. There are 535 BTC DeGods in the collection on the Magic Eden marketplace. Currently, the floor price, the lowest cost for any of them is 1.5 BTC, or about $30,291.

Yuga, the $4 billion company behind the popular NFT collection Bored Ape Yacht Club, is also getting in on Bitcoin NFTs. Their debut collection, TwelveFold, which includes 300 limited-edition pieces, sold out in a 24-hour auction. The launch raised $16.49 million worth of BTC.

Bitcoin base value and utility

Bitcoin enjoys the highest market capitalization of all cryptocurrencies at around $588 billion, representing a Bitcoin dominance of 48.15% as of writing. The global cryptocurrency market cap is $1.22 trillion. Since Inscription volume accelerated in mid-January 2023, the broader Bitcoin community has engaged in heated debate about its impact. The controversy centers around important utility and value questions.

Some believe Bitcoin was intended to be strictly a P2P electronic cash system, not a platform for decentralized file storage, including NFTs. These Bitcoin advocates criticize this method of “inscribing” assets on the network for being inefficient and wasteful, especially when it comes to block space and transaction fees. This camp believes this will potentially weaken the inherent security and utility of the Bitcoin blockchain. Some developers are exploring the use of smart contracts to mint assets and NFTs on Bitcoin.

However, advocates for Inscriptions argue they are creating positive sentiment and increasing the value of Bitcoin. As more NFTs are minted on-chain, the miners who validate Bitcoin transactions earn more money. The primary goal needs to be increased adoption and expansion into the mainstream.

One thing is certain. Ordinals bring a fundamental shift to the Bitcoin ecosystem. But you may still wonder how Bitcoin can move the world forward. Consider this.

Impact of the global banking crisis

We can't talk about Bitcoin without talking about disrupting traditional banking. The recent failures of several large banks raised red flags across the entire financial system. We know it was the global financial collapse of 2008 that led to the birth of Bitcoin.

The current uncertainty has again increased curiosity in alternative currencies. Why not "be your own bank?" While some see Bitcoin as a viable solution to traditional banking problems, others remain skeptical. However, it's clear that Bitcoin has a number of advantages that make it an attractive option for those looking to find a more stable, secure way to manage their finances.

Bitcoin is decentralized. It operates outside the control of any central government or financial institution. It is less susceptible to fraud and manipulation. And Bitcoin offers faster transactions, as well as lower fees compared to traditional banks.

Regardless, potential investors need to do their own research, especially since there are concerns about Bitcoin's price volatility. In addition, the crypto industry has experienced high-profile scams and hacks, and calls for more regulation are getting louder every day. Do you see where this is heading? Get ready for exciting times.

In closing

Overall, the impact of Bitcoin Ordinals and Inscriptions on the future of Bitcoin collectibles is still unclear. However, these new technologies have the potential to revolutionize the way that Bitcoin is used to store and collect digital assets. We can see the introduction of Bitcoin Ordinals changes how we perceive Bitcoin. They open new investment opportunities while allowing people to trade digital assets more securely and transparently than ever before.

Looking ahead, the groundbreaking utility of NFTs can increase exposure for Bitcoin, Ethereum, and other altcoins. The Bitcoin Ordinals ecosystem is ready to lead the charge in propelling the blockchain-based art and collectibles sector forward. The journey has only just begun, and we can’t wait to see what inspiring, imaginative creations emerge from this transformative technology.

If you want to learn more about Bitcoin Ordinals but want a little help, feel free to reach out.