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Get ready to groove with Bitcoin Ordinals, the fabulously innovative method of generating non-fungible tokens (NFTs) through a process known as inscribing. Bursting onto the scene in January, it’s jiving to the NFT and smart contract beats on the Bitcoin blockchain dance floor.
The Bitcoin Ordinals NFTs have been boogying non-stop since the launch of the BRC-69 token standard, and their dance card is getting filled fast. Glassnode, the DJ of blockchain analytics, has got the beats dropping and the inscriptions soaring over 350,000 a day.
The Rise of The Ordinals
Luminex, the chief conductor of the Ordinals symphony, struck the right chord with the unveiling of the Bitcoin Request for Comment (BRC)-69 token standard, a suave remix of the BRC-20 standard. The upshot? A whopping 90% reduction in the cost of inscriptions for Ordinals. As Luminex tweeted in a whirlwind thread, “With BRC69, our inscription costs for Ordinals collections are taking a nosedive by over 90%. And all it takes is a 4-step jig: (1) inscribe traits, (2) deploy collection, (3) compile collection, and (4) mint assets.”
Keeping things groovy and simple, BRC69 got minters to inscribe a single line of text instead of a full image, resulting in the final image being automatically rendered on all ordinals-frontends. All this is done using on-chain resources with the magic of recursive inscriptions. It’s like making music with only a single note, and so far, the BRC-69 rhythm seems to be hitting all the right beats.
In this grand party of inscriptions, while the number of newbies has surged like the crowd at a rock concert, the daily fees paid for inscriptions have stayed as cool as a cucumber. Data tracked by Dune Analytics tells the tale.
January saw the birth of Ordinals, introducing the NFT and smart contracts narrative to the Bitcoin blockchain and sparking investor excitement for tokens like STX, the native token of the Bitcoin layer 2 Stacks Network.
Glassnode divides the Ordinals party into two electric waves, the first wave driven by image-based inscriptions and the second by high fee-paying text-based inscriptions.
“Wave 2 made a massive splash. Despite a slight drop since May, we’re seeing an uptick in text inscriptions this week, with Bitcoin mempools beginning to clear out,” Glassnode’s latest weekly report highlights.
What are Bitcoin Ordinals?
Dancing in the world of digital assets, Ordinal Inscriptions bear a striking resemblance to NFTs. These are inscribed on a satoshi, the tiniest slice of a Bitcoin (BTC) pie, a technique made possible thanks to the stellar Taproot upgrade launched on the Bitcoin network in November 2021.
The dream of bringing NFTs to the number one blockchain has been a decade-long hustle, starting with the pioneering efforts of Counterparty in 2014, and then Stacks in 2017. The inscription process etches the data of the content into the witness of the Bitcoin transaction, an element added during the SegWit upgrade to the Bitcoin network in 2017.
“What the team has achieved with Ordinals is nothing short of genius,” remarks Alex Miller, CEO of Hiro, giving his standing ovation.
The Ordinals dance begins with users downloading Bitcoin Core and syncing the node to the blockchain. After the sync is done, the next move is to create an Ordinals wallet and send some satoshis to the wallet.
How did we end up on this dance floor?
The story starts in 2017 with the launch of Segregated Witness or SegWit, a skilled dance instructor that rectified a slew of bugs in Bitcoin Core. This enabled more transactions per block and laid the foundation for Layer 2 payment channels like the Bitcoin Lightning Network.
The Taproot upgrade added another beat to the Bitcoin dance, mixing transactions with single and multiple signatures and making it tougher to spot transaction inputs on Bitcoin’s blockchain. The result was a dazzling dance routine that enhanced privacy, cut the amount of data required, and lowered transaction costs.
“One thing that people don’t understand is that in order for Bitcoin to be secure, blocks must be full. That is part of the coin security model,” Casey Rodarmor, Ordinals developer and our dance captain, explained in an interview.
Navigating the Ordinals dance can seem a bit complex due to the size of the Bitcoin blockchain and the need to be familiar with the Command Line (Windows) or Terminal (Mac/Linux). But hey, no one said learning the cha-cha was easy, right?
Featured image by Shubham’s Web3