Bitcoin has come a long way since launching in 2009 as a fairly obscure form of digital cash. The project would go relatively unnoticed by the general public for several years, gaining popularity in 2013 and skyrocketing to become the largest asset class in the world.In fact, while Bitcoin was the first-ever cryptocurrency, its invention prompted thousands of new cryptocurrencies to follow suit, with complex use cases, expansive derivative markets, and a growing list of features added on. Bitcoin developers have also continued to innovate on the project, with the biggest update in recent years being Bitcoin Ordinals, which rolled out in 2023.Table of ContentsBitcoin Ordinals are Bitcoin’s answer to NFTs, allowing a way of inscribing data onto a specific satoshi (one-millionth of a bitcoin) in a way that makes that satoshi distinct from others or non-fungible.
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Ordinals explained: New era of NFTs on Bitcoin network? So why is this important?Originally, Bitcoin was launched as a fungible form of digital cash. Like a US dollar, one is much the same as the other as far as the people transacting are concerned. However, Bitcoin Ordinals allow users to identify satoshis from one another.For example, a collector might be interested in owning a satoshi from a crucial moment in Bitcoin’s history, like the Bitcoin halving that takes place every four years, and thus be willing to spend more than the market value of one satoshi to buy it.This leads Bitcoin into the realm of digital collectables and NFTs. The Ethereum NFT (non-fungible token) market exploded in 2021, with over $24 billion in sales of NFTs. These NFTs are typically digital assets on the Ethereum network with unique identifying numbers and were used to represent ownership of assets like art and music.Bitcoin Ordinals could be used for exactly the same thing, with the added benefit of being associated with the most popular and long-standing cryptocurrency on the market.Bitcoin Ordinals assign a unique identifier number to the satoshis in any given bitcoin. Bitcoin developer Casey Rodarmor introduced the idea in 2023 and used a feature of Bitcoin’s 2021 Taproot upgrade, which allowed for data to be stored directly on the Bitcoin blockchain to make it happen.Ordinals work by making each unit of a single bitcoin uniquely identifiable. When a bitcoin is mined, all one million satoshis are assigned a number in the order of their creation. Satoshis can be tracked individually across multiple wallets, meaning you can spend BTC and still keep track of individual satoshis or Ordinals.Whereas Ethereum NFTs sometimes require metadata to be stored off-chain, sometimes on a traditional web2 website, Bitcoin Ordinal data is all stored on-chain, reducing the risk of data loss. The SegWit and Taproot updates to the Bitcoin network allow for a lot of data to be stored in this manner.To buy Bitcoin Ordinals,