Ordinals

Ordinals are NFTs that you can mint on the Bitcoin blockchain.

But Orindal Inscriptions aren’t your usual NFTs. Unlike Ethereum NFTs, which depend on off-chain metadata that can be modified, Ordinal Inscriptions enable all data to be inscribed directly on-chain.

It was this flaw in Ethereum NFTs that caused software engineer Casey Rodarmor to deem Ethereum NFTs incomplete and launch the Bitcoin ordinals protocol.

Those in favor of change believe Ordinal Inscriptions could cause an important shift in the bitcoin community and improve the technology behind NFTs.

Yet many questions I’ve been receiving from clients boil down to, "is this good or bad for bitcoin?" and "will this disrupt the usability of it."

The challenge has been that as more Ordinals are being inscribed, the cost of bitcoin transactions has risen. That’s because Ordinals introduce additional, non-financial data on the Bitcoin blockchain that bog down on-chain confirmation times. This includes images, audio clips, even games.

Those not in favor of Ordinals see this as an impediment to the ability of Bitcoin to scale and reach full global adoption.

Inscribing non-fungible characteristics to Satoshis, the individual increments of Bitcoin, may challenge Bitcoin’s use case as first and foremost money.

Ordinals challenge the fungibility of Satoshis in the bitcoin network. All Satoshis should be equal, or it begins to lose a significant trait of money.

But ordinals can alter the value of these units of money. Take rare collectible coins as an example: While a penny may have a face value of exactly one cent, its design and mint year could make it worth a dollar or more in the eyes of some beholders.

Bitcoin is money, and that’s the largest and most important use case, impacting the most people in the world. Which is why I believe that Ordinals and other use cases both known today and yet to emerge will remain niche.