What are Bitcoin Ordinals: A Layman’s Guide

What are Bitcoin Ordinals: A Layman’s Guide

In the evolving landscape of digital assets, a new phenomenon has emerged on the Bitcoin network, known as Bitcoin Ordinals. These digital assets represent a novel use of the Bitcoin blockchain, differing significantly from the traditional NFTs minted on Ethereum, Solana, and Polygon. Projected to reach a market size of $4.5 million by 2025, Bitcoin Ordinals presents a unique blend of innovation and security, utilizing the robust Bitcoin blockchain to mint non-fungible tokens (NFTs). This shift not only highlights the versatility of the Bitcoin blockchain beyond its conventional financial transactions but also opens up a myriad of possibilities for artists, developers, and collectors. 

It also signifies a notable shift in the perception of Bitcoin from merely a currency to a broader platform capable of supporting complex applications. This blog delves into the workings, applications, and significant impact of Bitcoin Ordinals, paving the way for a deeper understanding of their potential in reshaping the digital landscape.

What Are Bitcoin Ordinals?

Bitcoin Ordinals transform the concept of NFTs by embedding data directly into the smallest unit of Bitcoin, known as satoshis. This capability stems from significant advancements in Bitcoin's network infrastructure, particularly through the Taproot and SegWit upgrades, which have expanded Bitcoin's functionality beyond simple transactions. Since their introduction in January 2023, Bitcoin Ordinals have captivated the market, demonstrating a versatile application of Bitcoin's foundational technology. 

The creation of these Ordinals is not just a technical evolution but also a cultural shift, showcasing a growing interest in utilizing Bitcoin for more than just financial transactions. By allowing digital artifacts to be permanently recorded on the Bitcoin blockchain, Ordinals creates a new layer of value and authenticity, attracting artists, gamers, and collectors alike. Furthermore, their integration into the Bitcoin network enhances the blockchain's value proposition, solidifying its position as a multifaceted platform for innovation.

The Technical Foundation of Bitcoin Ordinals

The inception of Bitcoin Ordinals became feasible due to two major network enhancements:

  • SegWit (Segregated Witness): Introduced in 2017, SegWit was a pivotal upgrade that restructured transaction formats to increase block capacity and improve transaction malleability. This upgrade was crucial for subsequent innovations on the Bitcoin network. It separated transaction signatures from transaction data, effectively allowing more transactions to fit within a single block and thereby enhancing the overall throughput of the Bitcoin network.

  • Taproot: Implemented in 2021, Taproot further expanded Bitcoin's capabilities by enhancing privacy, efficiency, and supporting more complex transactions, which laid the groundwork for adding rich data to transactions—essential for Bitcoin Ordinals. This enhancement introduced the concept of Merkelized Abstract Syntax Trees (MAST), which obscure the details of complex transactions unless they become part of a dispute, providing greater privacy. 

Furthermore, Taproot enabled the use of Schnorr signatures, which are known for their simplicity and ability to combine multiple signatures into one for multiple transactions, simplifying complex transactions and reducing their size on the blockchain.

How Bitcoin Ordinals Work

Bitcoin Ordinals inscribe information directly onto satoshis, bypassing the need for smart contracts, which are essential for NFTs on other blockchains. This process embeds data such as images, videos, and other digital content into individual satoshis, ensuring both permanence and security thanks to the decentralized nature of the Bitcoin blockchain. Each satoshi becomes a distinct digital artifact, capable of carrying unique information that cannot be duplicated, thus transforming ordinary satoshis into unique, verifiable assets. 

This methodology utilizes a simple yet powerful feature of Bitcoin’s design, extending its functionality without altering its underlying structure. By leveraging the inherent security and immutability of the Bitcoin network, Ordinals provides a robust platform for the creation and preservation of digital assets, setting a new standard for how blockchain technology can be utilized beyond conventional financial transactions.

Distinctive Features of Bitcoin Ordinals

  • On-Chain Minting: Unlike other NFTs that may refer to external files for their associated data, Bitcoin Ordinals store all data directly on the blockchain. This on-chain approach ensures that the data cannot be altered or removed without altering the blockchain itself. This method not only increases security but also enhances the authenticity of the digital assets, as each piece of data is verifiably original and unchanged from the moment of its inscription. Furthermore, the permanence of this data aligns with the decentralized and immutable nature of blockchain technology, reinforcing trust in the digital integrity of Bitcoin Ordinals.

  • Inscription vs. Tokenization: Traditional NFTs involve creating a new token on a blockchain, whereas Bitcoin Ordinals involve inscribing existing satoshis. This inscription creates a permanent and immutable record of the data on the blockchain. By utilizing the native currency units of Bitcoin rather than creating new tokens, Ordinals simplify the process and retain the inherent value and security of the Bitcoin network. This approach bypasses the complexities and potential vulnerabilities associated with smart contract platforms, focusing instead on the robustness of Bitcoin’s proven security model. Moreover, it avoids the fragmentation of value that can occur with new tokens, maintaining a unified economic ecosystem within Bitcoin.

Use Cases of Bitcoin NFTs
The potential applications of Bitcoin Ordinals are vast and varied:

  • Digital Art and Collectibles: Artists can mint their artwork directly onto the Bitcoin blockchain, providing a new avenue for digital art collections. This ensures that each piece is unique and owned securely without the need for a central authority, thereby enhancing the value and exclusivity of each piece.

  • Gaming: Game developers can use Ordinals to create unique in-game items and characters that are verifiably scarce and tradeable. These assets can then be used across different games, promoting a new type of interoperability within the gaming industry.

  • Music and Media: Musicians and filmmakers can use Ordinals to issue limited edition releases or special content directly to a fan's Bitcoin wallet. This not only simplifies the distribution process but also enhances the connection between creators and their audience by offering verifiable ownership of limited content.

  • Document Authentication: Important documents can be inscribed into a satoshi, providing an immutable record of the document's existence and authenticity. This application could revolutionize areas like legal documents, academic records, or contracts, ensuring they are tamper-proof and permanently accessible.

  • Real Estate: Using Ordinals for real estate transactions can transform property ownership by digitizing titles and deeds, ensuring they are easily transferable and immune to fraud. This could significantly speed up transactions while reducing costs associated with legal verification.

  • Identity Verification: Ordinals can provide a secure and immutable method of storing personal identity information on the blockchain. This can be used for everything from verifying online identities to improving security for financial transactions.

Each of these use cases demonstrates the flexibility and potential of Bitcoin Ordinals to impact various industries by providing secure, transparent, and immutable records on the Bitcoin blockchain.

Market Dynamics and Notable Projects

Over 950,000 inscriptions have been made, illustrating the rapid adoption and interest in Bitcoin Ordinals. This surge reflects a growing recognition of their potential to securely and permanently anchor digital assets directly on the Bitcoin blockchain. The market's enthusiasm is not just about novelty but also about exploring new frontiers in digital ownership and value.

Notable projects in this space include:

  • Ordinal Punks: A collection of 100 unique digital collectibles inscribed on Bitcoin, mirroring the popular Ethereum-based CryptoPunks. These items have gained significant attention due to their rarity and the iconic status of their Ethereum counterparts, making them highly sought after in the digital collectibles market.

  • Taproot Wizards: A project that combines artistic creativity with blockchain technology, where unique wizard images are inscribed on satoshis. Each wizard is distinct, featuring different attributes and designs, which adds to their collectibility and appeal.

  • Bitcoin Bestiary: Another intriguing project that involves the inscription of various mythical and legendary creatures onto the Bitcoin blockchain. This project aims to create a vast, interconnected universe of digital creatures, each with its own backstory and digital provenance.

  • Satoshi Scrolls: This project leverages the permanence of Bitcoin's blockchain to inscribe ancient and modern wisdom texts in tiny fragments across numerous satoshis. It not only celebrates cultural heritage but also illustrates a novel use of NFT technology for preserving information.

These projects highlight the diverse applications of Bitcoin Ordinals, from digital art and gaming to cultural preservation, showcasing the technology's flexibility and its broad appeal across different sectors.

Future Outlook and Challenges

The future of Bitcoin Ordinals is promising yet filled with challenges that could shape their trajectory. Scalability concerns due to the increasing size of the blockchain, environmental impacts from higher energy consumption, and the need for broader wallet support are among the key issues. Additionally, regulatory scrutiny could impact the adoption and functionality of Bitcoin Ordinals. 

As the technology advances, the integration of more efficient consensus mechanisms could alleviate some of the environmental concerns associated with blockchain expansion. Moreover, the development of user-friendly interfaces and more secure wallet technologies could enhance accessibility and trust among potential users. Market volatility and the speculative nature of digital assets also pose financial risks that could deter new entrants, potentially stalling broader market adoption.


Bitcoin Ordinals represent a significant shift in the use of blockchain technology, extending Bitcoin's utility beyond mere currency. By enabling the blockchain to store and verify unique digital content, Bitcoin Ordinals offers a promising new platform for NFTs. As the technology matures, it could potentially redefine interactions within the digital economy, offering more secure, transparent, and efficient ways to handle digital ownership. The next few years will be critical in shaping the impact and sustainability of Bitcoin Ordinals in the wider blockchain ecosystem.

Bitcoin Ordinals not only enrich the Bitcoin ecosystem but also highlight the blockchain's potential for continuous evolution and application across various domains. Keeping abreast of developments in this space can provide valuable insights into the future of digital assets and blockchain technology. Whether you are involved in technology, finance, or the digital arts, the evolution of Bitcoin Ordinals is a development worth watching.

About The Author

Jesse Anglen, Co-Founder and CEO Rapid Innovation
Jesse Anglen
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Co-Founder & CEO
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