Last Updated on February 19, 2023
Software engineer Casey Rodarmor launched the protocol on the Bitcoin mainnet on January 21. It allows digital artifacts like images, text, programs, and even video games to be inscribed directly on the Bitcoin blockchain. In other words, Ordinals means NFTs on Bitcoin.
The upgrades that made Ordinals possible were the 2017 SegWit upgrade, which created a separate field within each transaction called a “witness,” allowing people to provide more data like scripts and even smart contracts. Then the Taproot update in 2021 furthered Bitcoin’s smart contract capabilities, which led us to Ordinals in 2023.
Long before Ordinals, a few old-school Bitcoiners floated the idea of incorporating a domain name system into Bitcoin. The project, dubbed BitDNS, was quickly shot down by Satoshi. “Piling every proof-of-work quorum system in the world into one dataset doesn’t scale,” Satoshi wrote in 2010, sealing its fate.
“…the ability to publish uncensorable information on the #bitcoin timechain, effectively makes speech uncensorable worldwide forever.”
Because Bitcoin’s transaction fees are determined by the amount of data in each transaction, and Ordinals adds more data to each block, Bitcoin’s transaction fees spiked significantly after the Ordinals launch. In no small part because groups like Taproot Wizards decided to troll the network with ever-larger blocks, including the largest block in Bitcoin history, with 4MB of data.
Ordinals
Ordinals are a numbering scheme for satoshis that allows tracking and transferring individual sats. These numbers are called ordinal numbers. Satoshis are numbered in the order in which they’re mined, and transferred from transaction inputs to transaction outputs first-in-first-out. Both the numbering scheme and the transfer scheme rely on order, the numbering scheme on the order in which satoshis are mined, and the transfer scheme on the order of transaction inputs and outputs. Thus the name, ordinals
Compared to ETH – https://www.nftculture.com/guides/ordinals-are-bitcoin-nfts-an-overview-on-inscriptions/
Questions
- Would broad adoption of ordinal theory impact bitcoin’s fungibility?
- Should we be concerned about a faster rate of growth of the blockchain?
- What are the implications of illegal content stored on-chain?
- Would this hurt or help Lightning Network adoption?