Bitcoin Ordinals - Has the Giant Awakened?

The NFT party was going great[1], with “Apes” here and “Punks” there, Ethereum, Solana, Polygon, Arbitrum, Cardano, and Flow reigning supreme, everything was going great, except Bitcoin [2] was left out of the party. That was until Casey Rodarmor came up with the Ordinals Theory, like a Eureka moment, and voila! Bitcoin enters the party. However, “Bitcoin” is too big and can overshadow everyone else. Let's understand better.

Bitcoin the Giant

While Bitcoin has a market capitalization of approximately $550 billion on the day of writing this text [3], if we add up all the other cryptocurrencies together, they do not match Bitcoin [4]. Ethereum is certainly important, has grown a lot, is the second place and, in the world of NFTs, it is the king [5], but it’s exactly this that can change (always, everything can change).

Columbus’s Egg

In mid-2022, there was a guy named Casey Rodarmor [6], who was participating in conferences dedicated to Bitcoin, talking about his new idea or “theory”, as he called it, of Ordinals. As the events he participated in were very specific, targeting Bitcoin developers, few people heard what he had to say. But like all great discoveries and discoverers, he did not give up and continued, and by the turn of the year 2022-2023, he began to be heard more, and very quickly. Thus, the Bitcoin Ordinals market began.

It is important to highlight that this text is being written in March 2023, and the first well-known Ordinals registrations on the Bitcoin Blockchain began to appear in January 2023. Therefore, in less than three months, the “Ordinals Theory” stopped being a Bitcoin nerds thing and moved to the general market. It is still very recent, certainly, but the speed at which an entire market was born and developed was incredible, typical of historical events.

In less than three months, thousands of entries were created on the Bitcoin Blockchain, millions of purchases and sales typical of large NFT marketplaces were made, hundreds of sites began to create businesses based on the theory, and a multitude of, perhaps not exaggerated to say, “crazy people”, began to dive into this world. And this is still happening, now, and if it is indeed a revolution in the Bitcoin world, it should grow even more!

The most interesting thing is that the Ordinals Theory, looking back now, is nothing special, and moreover, it already existed in the original Bitcoin protocol created by Satoshi Nakamoto, which is the concept of atoms [7]. Casey also mentions in his presentations or interviews that in his research he was looking for serial numbers for Sats (the “Sats” are the “Satoshis”, 1 Bitcoin has 100 million Sats), and he found this idea in a 2012 post on a Bitcoin forum where someone described the idea exactly as he was imagining [8]. Therefore, as Casey Rodarmor himself says, in a way he did not “create” the concept of Bitcoin Ordinals, he just looked at it from another angle, used the existing ingredients, and cooked up something new.

What are the Ordinals?

One of the main “magics” of Bitcoin Ordinals is that they are not a new Blockchain, a new currency, nor even a new layer on top of the existing Bitcoin layer. The Ordinals exist in the Bitcoin's own layer (called Layer 1) and do not change the protocol in any way. Sats (Satoshis) have always existed in the Bitcoin protocol and the Ordinals are a way of viewing the Blockchain from a different angle. That's the beauty, that's the power, it allows the already existing and gigantic infrastructure of Bitcoin to continue to be used.

The Ordinals Theory is a “convention”, not a new protocol or a temporary hack to subvert the intent of a Blockchain, so companies, websites, products, and projects that follow this “convention” will be speaking the same language.

The “Ordinals”, as the name itself suggests, are “Ordinal” numbers, i.e., sequential numbers that represent each satoshi in each bitcoin. But then how are NFTs recorded on the Bitcoin Blockchain? This is where the “Inscriptions” come in. The sequential numbers of the Sats “point” to the content, which is the analogy to the NFT, and that content is registered on the Bitcoin Blockchain for eternity. Therefore, it's at least an intelligent way of implementing an NFT form in Bitcoin.

The creator himself does not like to call them NFTs, he prefers to call them Digital Artifacts. They are the native Digital Artifacts of Bitcoin, and these artifacts can contain anything digital (e.g., text, images, documents, sounds, or videos), just like NFTs on other Blockchains.

The Ordinals were made possible due to the update made in 2021 on the Bitcoin protocol called Taproot [9]. The “Taproot Upgrade” aimed to make Bitcoin faster, more efficient, and private. It also allows and encourages the implementation of Smart Contracts. Smart Contracts were what made Ethereum differentiate itself from Bitcoin originally when created, making it the second-largest Blockchain in the market. In Ethereum, you could have anything stored on the Blockchain (“on chain”), including software algorithms, and NFTs were a derivation of that idea, which originally did not exist in Bitcoin. That's why Ethereum differentiated itself from Bitcoin as a more modern Blockchain, grew very fast, and also caused its model to be copied by other Blockchains and cryptocurrencies that came after it.

Yuga Labs, DeGods and Marketplaces

With the advent of well-known companies from other Blockchains creating NFT collections on Bitcoin, the “Ordinals” became even more well-known. Yuga Labs, the creators of the Bored Ape Yacht Club, one of the world's main NFT collections, if not the main one, announced in March the creation of a collection called TwelveFold, which quickly raised $16 million in Bitcoin NFTs [10].

Meanwhile, DeGods, the largest NFT collection on the Solana Blockchain, which is migrating to other Blockchains, recently announced the creation of the DeGods collection on Bitcoin, which was also a great success [11]. Bitcoin NFTs are still mainly composed of those created by pioneers, but as the most well-known and successful collections in the world move to the Ordinals, more and more people will become aware and the market will grow.

Another “revolution” that has occurred, and this in a very short period of time, was the creation of “Marketplaces” focused on Bitcoin NFTs. In approximately two months (February and March of 2023) more than 10 good Marketplaces were created and have already grown, and we see more movement in this area every week. Marketplaces are fundamental to making the Bitcoin Ordinals market grow, as they greatly facilitate interaction between users, the creation of new collections, and most importantly, the buying and selling of NFTs in the Bitcoin world. For a list of the most well-known Marketplaces to date, see the note below [12].

The advantage of Blockchain markets is that all data is public, and in real-time (since it is recorded, of course, on the Blockchain), so numerous sites present these numbers. At the time of writing this text, approximately 20,000 Bitcoin Ordinals wallets had been created in the world, and this number can be compared in the future, when someone reads this text, to see if there was rapid growth or not. The Dune website allows for the creation of indicators and dashboards for real-time monitoring, the note below presents some interesting indicators and charts [13].

The Future

The future of Bitcoin Ordinals? Well, we already know. If it is to follow in the footsteps of Bitcoin itself in the beginning, it is: to endure a lot of criticism, have numerous predictions that “it won't succeed”, various accusations of money laundering and fraud, that it won't work, won't have adepts, that it is a waste of money, etc. etc. But we already know, in the future, we may see news, as we have already seen in the world of NFTs on Ethereum, of a sole Bitcoin NFT being sold for over $1 million.

Galaxy, a company specializing in investment markets focused on Blockchain, recently released a very interesting research report, stating that the Bitcoin Ordinals & Inscriptions market could reach $5 billion in 2025. It is worth reading [14].

Visionnaire in the world of Blockchains and NFTs

Visionnaire, as always, is one of the pioneering companies in developing software with innovative technologies. This is in our name (Visionary in French), in our DNA, and in our culture [15].

Recently, we developed an innovative project focused on music on the Blockchain for a US client (Musical App). This is one of the first projects in the world that combines music, Blockchain technologies, NFTs, and a social networking or community concept, for amateur and professional musicians. More about this successful case can be found in this note [16].

In 2022, we worked on a consultancy project for impact Startups for the state of Mato Grosso, Brazil, in partnership with Oi Futuro, where one of the Startups was composed of artists who wanted to take their art to the digital world, including NFTs. Visionnaire provided mentoring for these Startups.

And more recently, we worked with an artist (painter) from Santos who moved to Curitiba and also wanted to take his art to NFT platforms, and he chose Visionnaire to be his partner.

If you are looking for a company deeply immersed in technology, with passion for what it does, and want to enter the world of NFTs, Blockchains, and Cryptocurrencies, count on Visionnaire to be your company partner! Contact us here. 

Sergio Mainetti Jr.

Visionnaire Co-Founder and Director 

Notes:

[1] NFTs are Non-Fungible Tokens, for more information about NFTs see here. 

[2] For Bitcoin purists, there is a difference between writing Bitcoin with a capital “B” compared to writing bitcoin with a lowercase “b”. The difference is that when we refer to the protocol, the Blockchain, the payment system, or the ecosystem as a whole, we call it Bitcoin, and when we refer to the currency, the cryptocurrency, we call it bitcoin (see here), however, for this specific text, we are not concerned with the purity of nomenclature 

[3] The day this text was written was 03/29/2023, and the market value of Bitcoin was $550 billion. It has been $1.2 trillion, it has been less. To follow this data in real-time, see here or filter by your options and any time period here. 

[4] Bitcoin has always been the largest cryptocurrency market, so much so that it has always surpassed all others combined, hence a giant. A good place to see this information is here, scrolling down further on this link, you can see the proportion of Bitcoin's market compared to other cryptocurrencies. In the past, it was 80%, currently, it is 46%, but considering that in recent years the number of cryptocurrencies in the world has jumped from 2,000 to over 9,000, and that some of these cryptocurrencies are actually stable coins, such as Tether, BNB, and USDC, excluding these, Bitcoin returns to over 50% of the total market. Of course, this changes every day, a good place to see how this proportion was in the recent past is here, and to follow this proportion in real-time, it is possible to see here. 

[5] This site shows which Blockchains are the largest, when measured by NFT volume. 

[6] For more information about Casey Rodarmor, see here and his Twitter here. 

[7] This is a very geeky discussion, but if you are interested, see here and here. 

[8] The interview reference is this, see the subject mentioned from minute 18m20s. The BitcoinTalk forum post is this. 

[9] More about the Taproot Upgrade here and here. 

[10] News about the launch of TwelveFold, the Yuga Labs NFT in Bitcoin. 

[11] DeGods joining the Bitcoin Ordinals. 

[12] There are already several marketplaces for Bitcoin Ordinals and Inscriptions, following is a list of the best-known ones: OrdinalsWallet, OrdSwap, Gamma, Ord Exchange, Generative XYZ, Ordx, Ordinals Market, Ordynals, and Magic Eden. The latter already making a difference for its success on other Blockchains such as Solana 

[13] Interesting indicators and charts on Bitcoin Ordinals, here, here, and here. 

[14] Galaxy's study on the Bitcoin Ordinals & Inscriptions market, web page here, PDF version here. 

[15] Visionnaire's Vision and Mission can be found here.

[16] The Visionnaire Musical World (Musical App) Success Case can be found here.