The Ordinals protocol allows NFTs to be stored directly on the Bitcoin blockchain. How Bitcoin Ordinals work, why they’re controversial among Bitcoiners, and what role they play in the BTC ecosystem today.<\/p>\n
Bitcoin Ordinals is a protocol that brings NFTs<\/a> to the Bitcoin mainnet. It was created by Casey Rodarmor, who previously worked as a Bitcoin Core developer. The protocol was released in January 2023.<\/p>\n This allows NFTs to be transferred via the Bitcoin<\/a> blockchain. A sidechain is not necessary for this. Everything happens on the mainnet. Previously, this functionality was only known from dedicated smart contract platforms<\/a> like Ethereum<\/a> or Solana<\/a>. Ordinals calls this feature Inscriptions<\/i>.<\/p>\n As stated on the official website<\/a> of the project:<\/p>\n Inscriptions using the Ordinals protocol are fully on-chain and don’t require a sidechain or a separate token.<\/p><\/blockquote>\n The principle: Specific satoshis are assigned certain ordinal numbers through the Ordinals protocol\u2014the so-called Ordinals, after which the concept is named. These ordinal numbers then allow data on the blockchain<\/a> to be attached to specific satoshis<\/a>.<\/p>\n This attached file (which can be an image, text, audio file, or even code) is stored on the Bitcoin blockchain. The inscribed satoshi can then be transferred like any other satoshi through normal Bitcoin transactions. The attached artifact remains permanently connected to it.<\/p>\n Although Bitcoin Ordinals are often compared to traditional NFTs, there’s a crucial technical difference. With most Ethereum NFTs, the on-chain data merely points to a file stored externally. With Ordinals, however, the content is stored entirely on the Bitcoin blockchain.<\/p>\n This brings both advantages and disadvantages: Ordinals are permanently available and independent of external storage locations. At the same time, they’re less flexible since Bitcoin doesn’t support smart contracts and the inscription size is limited by the block format.<\/p>\n From the start, the protocol sparked opposing reactions among Bitcoiners. On one hand, users were enthusiastic. On the other hand, there’s considerable criticism and rejection.<\/p>\n Until 2017, there were conflicts among supporters of the largest cryptocurrency, now known as the Blocksize War<\/i>. The question was: Should the Bitcoin block be enlarged or should its data volume remain at one megabyte?<\/p>\n The Bitcoin Core developers and the majority of the network decided on the smaller block. The opposition split off and formed Bitcoin Cash and later Bitcoin Satoshi Vision. <\/p>\n With Ordinals, the discussion about block size resurfaced. In July 2017, SegWit changed Bitcoin’s transaction format. Another change occurred in late 2021 with the Taproot upgrade. As a result, the one-megabyte block size limit can be exceeded. Blocks can grow up to four megabytes<\/a>.<\/p>\n Bitcoiners disagree on whether the spread of NFTs is an appropriate reason to enlarge blocks up to four megabytes. There’s concern that the blockchain could grow unnecessarily and prevent inclusion. This danger was supposed to be prevented by a block size limit. <\/p>\nHow do Inscriptions work with Bitcoin Ordinals?<\/h3>\n
Bitcoin Ordinals vs. NFTs on Ethereum: The Difference<\/h3>\n
Why NFTs on Bitcoin are Controversial<\/h2>\n
The Bitcoin Block Size Debate<\/h3>\n
Critics and Supporters of Bitcoin Ordinals<\/h3>\n