Bitcoin ordinals are a type of non-fungible token (NFT) that are minted on the Bitcoin blockchain by inscribing a unique piece of information such as text or an image on a satoshi, which is the smallest unit of Bitcoin. The inscription makes the satoshi unique, effectively turning it into a de-facto NFT.
Ordinals are similar to NFTs but are specifically digital assets inscribed on a satoshi. In April 2023, the daily record for inscriptions using Ordinals was broken four times as users flooded the network with images, video games, and other content.
The ordinals protocol allows users to make individual satoshis unique by attaching extra data to them, a process known as “inscription”. The data inscribed on Bitcoin can include smart contracts, which in turn enables NFTs. Unlike traditional NFTs, which are often built on Ethereum, Ordinals are fully stored or “inscribed” on the Bitcoin network, with the actual NFT data stored elsewhere in the past.
Bitcoin Ordinals have aroused controversy due to Bitcoin’s “true purpose” as electronic cash and the perceived inefficiency of consuming block-space to encode digital files on the Bitcoin blockchain.
In summary, Bitcoin ordinals are NFTs that are minted directly onto the Bitcoin blockchain by inscribing unique data on a satoshi, allowing users to make individual satoshis unique and effectively turning them into NFTs. While similar to traditional NFTs, ordinals are fully stored on the Bitcoin network and have aroused controversy due to concerns about the perceived inefficiency of consuming block-space to encode digital files on the Bitcoin blockchain.