Bitcoin NFTs (non-fungible tokens) have grabbed the attention of many crypto fans in recent weeks. They have also created new opportunities on the largest and oldest blockchain.
For many years, Ethereum has been known to be the major host of most NFTs, but a new project called Ordinals is looking to change that. Launch in January, Ordinals has taken advantage of the Bitcoin Taproot upgrade to enable users to create Bitcoin-based NFTs.
Several prominent NFT creators have already launched their collections on the blockchain through Ordinals. One of them is Yuga Labs. The Bored Ape Yacht Club developer introduced its TwelveFold NFT collection in February, featuring 300 unique pieces.
What are Ordinals?
Ordinals can be described as serial numbers engraved in the smallest unit of BTC, called a satoshi. Using the ordinal theory, the ordinals are assigned to unique satoshis in the order in which they’re mined. That is, the first satoshi in a block has the ordinal number 0, while the last has the number 4,999,999,999.
So the ordinary theory gives satoshis numismatic value, making them collectible and tradeable as rarities.
What’s Inscription and How Do You Create Bitcoin NFTs?
Inscription involves assigning assets to satoshis using the Ordinals protocol.
The Ordinals project offers two ways of minting NFTs. The first method of inscribing Bitcoin Ordinals needs technical skills. It requires a user to run a Bitcoin node, then install Ord on that node in order to inscribe satoshi into the ordinals wallet and create Bitcoin NFTs. The wallets used to process Ordinals must have a coin control mechanism that prevents spending of Ordinal satoshis as gas fees and must be compatible with the taproot upgrade. That said, you can use an Ord wallet or the Sparrow wallet.
The second method is simple and uses no-code tools like Ordinalsbot.com and Gamma to inscribe Ordinal NFT. Here is how you can mint a Bitcoin NFT in Gamma.
Step 1: Select the file type you want to use to mint your NFT. It could be an image or text.
Step 2: Upload the file from your computer.
Step 3: Set up the transaction fee.
Step 4: Enter the Bitcoin address you would like to send the Ordinal NFT.
Step 5: Wait for your NFT to be minted. It could take hours or days, depending on the transaction fees you paid.
Step 6: You can view your minted NFT on OrdinalsViewer.
How to Trade Ordinals
Marketplaces intended to support trading for Bitcoin Ordinals are still in the development stage. Meanwhile, users can trade their NFTs in dedicated Discord servers. Despite the trading process not being as simple as that on Ethereum, people have continued to mint their Bitcoin NFTs, with over 250,000 Ordinals already minted since late January.
How to Buy Bitcoin NFTs
A taproot-compatible wallet like the Ordinals wallet is needed to purchase Bitcoin NFTs. The process is super simple. You must first create an account and then deposit BTC into the wallet. Select the NFT you want to acquire and click ‘Buy.’ Once the transaction has been completed, the NFT will reflect in your wallet.
How to Sell Bitcoin NFTs
Similar to purchasing, you also need a taproot-compatible wallet to sell an NFT. First, you need to create an account and then upload your file to be inscribed in the Bitcoin blockchain. Once it has been inscribed, you will receive it in your wallet. Now you can head over to the Bitcoin Ordinals Discord server to sell your NFT.
Bitcoin NFTs Controversy
Since its launch, the Ordinals protocol has caused a heated debate within the Bitcoin community. The members are divided on whether Bitcoin should just be money or extend its functionality to additional use cases.
Many are concerned that Ordinals could hinder Bitcoin from fulfilling its primary function as a medium of exchange. That’s because these NFTs come in various sizes that require space which is deducted from the financial data, causing slow transactions.