Developed by Casey Rodarmor, the Bitcoin Ordinal Protocol was first introduced on January 21, 2023. This protocol brought a significant innovation to both the Bitcoin and NFT worlds by enabling the creation of NFTs stored entirely on the Bitcoin blockchain. Traditionally, developments on the Bitcoin network are challenging due to its security protocols and lack of smart contract capabilities. However, with the Bitcoin Ordinal NFT Protocol, the Bitcoin network has gained a much broader range of use cases.
How Does the Bitcoin Ordinal Protocol Work?
Bitcoin is built on its smallest unit, the Satoshi (SAT). One Satoshi equals 0.00000001 Bitcoin (BTC). Each Satoshi has its own data storage space. The Ordinal Protocol associates each NFT with a Satoshi and uses its data storage to embed the NFT information. This method ensures that Bitcoin NFTs are extremely secure. Making a change to an NFT would mean changing the Satoshi it is tied to, which is nearly impossible due to the Bitcoin blockchain’s security protocols.
The Ordinal Protocol has become feasible thanks to the SegWit and Taproot upgrades on the Bitcoin network. SegWit expands the Bitcoin block size up to 4 MB, while Taproot removes the limits on the data added within this 4 MB space. Thus, up to 4 MB of data can be added to each Satoshi.
Adding data to the blockchain can be an expensive process. Therefore, Bitcoin NFTs generally do not use such large amounts of space. However, some Ordinal transactions can contain up to 4 MB of data, which might require an entire Bitcoin block to be dedicated to this transaction, making it quite costly.
What is Recursive Inscription?
Recursive Inscription is an infrastructure that requests and coordinates data within existing Satoshis. This allows the Ordinal infrastructure to reach broader use cases. Since there are no limitations on the data that can be stored in Satoshis, this system can transform the Bitcoin blockchain into a massive storage area. Recursive Inscription coordinates code fragments added to Satoshis, enabling the creation of applications (DApps) linked to the Bitcoin blockchain.
Difference Between Ordinal and Inscription
Both “Ordinal” and “Inscription” terms are used for Bitcoin NFTs. Ordinal refers to storing data within a Satoshi without disrupting the order of the Bitcoin blockchain. Inscription allows NFTs to interact with additional data using the Ordinal infrastructure. These two terms work together to facilitate the creation of Bitcoin NFTs.
Criticisms of Bitcoin Ordinal NFTs
There is no consensus among Bitcoin developers and the community regarding Bitcoin Ordinal NFTs. Data added to Satoshis is included in blockchain blocks like ordinary Bitcoin transactions, which takes up space in the block. As demand for Ordinal transactions increases, Bitcoin transfer transactions might be pushed to subsequent blocks, causing delays. Additionally, these transactions can increase the demand on the blockchain, leading to higher transaction fees.
Innovative Aspects of the Bitcoin Ordinal Protocol
Bitcoin is the most advanced blockchain in terms of decentralization and security. The Ordinal Protocol offers an innovative infrastructure that aligns with the existing system, allowing enterprises operating in different sectors to form on the Bitcoin blockchain. Data stored in Satoshis enables the production of collectible NFT products, without any category restrictions. Solutions like Recursive Inscription make it possible to develop more complex applications linked to the Bitcoin blockchain by coordinating the data stored in many Satoshis.
Bitcoin Ordinal NFTs have secured a significant place in the market through collectible products. The ecosystem is expected to expand with applications related to different business lines built on the Ordinal Protocol.
