Bitcoin Ordinal is a new variation of the blockchain NFT technology presented by the flagship crypto company, Bitcoin. BTC Ordinals aim to solve the fundamental limitation of Bitcoin, which is its entirely speculative value. With such ordinals, the Bitcoin currency has finally acquired a robust inherent value that resembles NFTs but differs from them in critical areas.
The Unique Inscription Process of Ordinals
In simple terms, BTC Ordinals (BOs) are Satoshi Units (SATs) infused with the inscription ability. SATs are the lowest possible denomination of the Bitcoin currency, useful for traders to transact with BTC fractions. The inscription ability allows BOs to feature several data types within its data block, including text, images and even GIFs.
However, the size of the uploadable text is quite limited, with an upper constraint of just 4 megabytes. Thus, most inscriptions for the BOs are in the form of text. While the Ordinal technology is still in its infancy, the underlying methodology is sound and very promising for BTC owners, as it signals the new chapter for the utility and inherent value of the flagship crypto.
BTC ordinals vs NFTs: Key Differences
Thus far, the description of Ordinals is very similar to NFTs. So, what’s the difference? Firstly, NFTs must be minted to contain any data within them. In most cases, the minting process occurs off the main chain, forcing the NFTs to be cross-chain products and thus sacrificing the rock-solid security and decentralisation of blockchain.
With BTC Ordinals, the inscription process happens exclusively on the mainnet, meaning that BOs do not have to compromise the blockchain benefits to contain data.
On the other hand, BTC Ordinals are very limited in size, only allowing 4 megabytes of data to be stored. NFTs do not have this limitation, allowing creators to upload content as a non-fungible asset.
The liquidity aspect is another benefit for BOs, as they have the relentless support of the largest crypto coin in the world behind them. Bitcoin also has a trust and steadfast reputation in the crypto market, which bodes well for adopting BOs. On the other hand, NFTs were the product of Ethereum, but most NFT ecosystems are off the chain. Thus, the public can’t assume that NFT products share the same security and quality features as the second-best crypto platform on the market.
While BTC Ordinals have the backing of Bitcoin, their implementation still needs improvement. Unlike NFTs, BOs are challenging to initiate and set up, as there are no convenient marketplaces to simplify this process. Thus, users who wish to create BOs must learn the technical aspects of inscriptions, which might be a hassle for some clients.
Finally, BOs have substantial ethical issues due to the need for more regulation. Bitcoin does not restrict anything, and customers can upload any data on BO blocks. Naturally, this opens the gate to potentially questionable or even illegal activities involving the data exchange. Thus, the public is quite divided on the issue of BOs. They present numerous improvements over NFTs, but their size limitation and the legal dilemma force the public to remain sceptical.
What Do Bitcoin Ordinals Mean For Blockchain?
BOs are an excellent concept, allowing the Bitcoin blockchain network to increase its inherent value and utility without sacrificing its signature benefits. BOs have become wildly popular on the market, with millions of users trying this technology and experimenting with it. However, the general public is still dubious about the ultimate success of BOs. Many believe BOs could be utilised in malicious attacks, fraud and other highly illegal activities without restrictions or regulations. While the big picture for BOs remains unclear, experts can’t deny its significance and importance for the flagship crypto.
Bitcoin Ordinals have the power to raise the intrinsic value of the cryptocurrency and change the NFT market into a decentralised, more secure marketplace. BOs can also revolutionise the Web3 and Metaverse markets as well. But because there is no filtering or moderation, they also raise serious ethical questions and have the potential to clog the Bitcoin Network. BTC ordinals have an unclear future ahead of them; only time will tell if this innovative technology lives up to its potential.