Bitcoin Ordinals is the latest layer-2 solution that makes way for the decentralized storage of digital art on the BTC blockchain. Ordinals will allow users to migrate their Ethereum’s ERC-721-based non-fungible tokens onto the BTC blockchain with the launch of the BRC-721E standard.
The BRC-721E standard was jointly launched by the Ordinals market, an ordinals-based marketplace and Bitcoin Miladys, a meme token. The new BRC-721E standard enables the conversion of immutable, verifiable ERC-721 NFTs to Ordinals. Initially, metadata is not stored on-chain, but users can store a lower-quality preview image there and include a reference to the ETH burn in the raw image data.
The migration process starts with the burning of the ERC-721 NFT with an ETH call function. The burning of the NFT is an irreversible process and acts as an on-chain inscription method. In order to claim the ETH burn on Bitcoin, the user must inscribe valid BRC-721E data and the bridged NFT will appear on a custom Ordinals market collection page with full metadata.
The indexers that check the burned NFT data inscriptions are in charge of making sure that a token has no more than one valid inscription, as well as ensuring that the Genesis address matches the burn transaction call data.
The Ordinals market claimed the fundamental principles of BRC-721E and the flexibility of the indexers allow for the protocol to evolve over time, despite the fact that metadata is initially not stored on-chain.
Bitcoin Ordinals has drawn widespread reaction from the crypto community over its usage and need ever since its launch in January 2023. Just a few months later, the launch of the BRC-20 standard in March created an experimental fungible token standard designed specifically for the Bitcoin blockchain. The combination of BRC-20 with Ordinals opened new gates for minting new tokens on the Bitcoin blockchain, and within months, the crypto community saw many popular BRC-20 tokens such as Ordi, Vmpx and Pepe.
The number of BRC-20 tokens has skyrocketed from a few 100 in the first week to over 25,000 at the time of publication. However, the rise of Ordinals and the new token minting era has not gone down well, with many Bitcoin proponents who have criticized the newly popular method as inefficient and wasteful.
