Author: Elaine Yang
1. Introduction to Bitcoin NFT Protocol Ordinals
As a cryptographic token that can represent a unique digital asset or physical asset, NFT is unique and irreplaceable on the blockchain. NFT has been developed for many years on smart contract platforms such as Ethereum, and many well-known projects and applications have been born. However, on Bitcoin, the earliest and most secure blockchain, NFT has not been widely developed and applied due to its lack of native smart contract functions and high transaction fees.
To solve this problem, a protocol called Ordinals was officially launched on December 14, 2022. It takes advantage of the technical features of Segregated Witness (SegWit) and Taproot 3 on the Bitcoin network (reducing transaction data size, thereby speeding up transactions, improving scalability and reducing fees.) to achieve direct minting, transfer and destruction of NFTs on the Bitcoin chain. The Ordinals protocol numbers the smallest unit (satoshi) in each Bitcoin and links it to a metadata to form a unique and traceable NFT. The Ordinals protocol does not require any centralized or trusted party to participate, nor does it rely on any Layer 2 or sidechain solutions. It fully follows the rules and security of the Bitcoin network itself.
The next big move for Bitcoin NFTs came in December 2022, when the first serial inscription was minted.
The Bitcoin NFT protocol Ordinals minted more than 5 million inscriptions on May 10, and the total fees generated so far have reached approximately 213.1 BTC.
How do serial numbers and inscriptions work?
ORD, an open source software that can run on any Bitcoin full node, can track individual Satoshis according to what founder Casey Rodarmor calls "Ordinal Theory". Satoshis ("sats") are the smallest unit of the Bitcoin network, 1 Bitcoin = 100,000,000 sats. Ordinal theory assigns a unique identifier to each person on Bitcoin. In addition, these individual sats can be "engraved" with arbitrary content, such as text, images, videos, to create "inscriptions", which are Bitcoin-native digital artifacts, also known as NFTs. Individual sats can be "engraved" with arbitrary content, such as text, images, videos, to create an "inscription", which is a Bitcoin-native digital artifact, or NFT.
Current data on the number of inscriptions on some ordinals protocols https://dune.com/dgtl_assets/bitcoin-ordinals-analysis
2. Current status of BTC NFT development
1. Blue chip projects on ETH and Solana to NFT projects issued on the Bitcoin network
NFT projects with big names
Refers to NFT projects issued on the Bitcoin network by blue-chip projects on ETH and Solana, such as Yuga Labs' "TwelveFold" and the Bitcoin version of DeGods. TwelveFold is an NFT released by Yuga, with only 300 pieces. It is also the only NFT project endorsed by a large institution. It is an art project, and the ceiling of art is much higher than that of PFP avatars. If it succeeds in the future, it will be a top luxury product!
Such projects have already had great influence, so the sale prices are also very high. Yuga Labs' "TwelveFold" sold 288 NFTs in the form of auctions, with the highest winning bid of 7.1159 BTC and the lowest winning bid of 2.2501 BTC, with a total auction revenue of approximately US$16.5 million. Currently, on ordinals.market, the floor price of "TwelveFold" exceeds 30 ETH, and the cumulative transaction volume is 108.49 ETH. DeGods sold 500 Bitcoin versions of DeGods in 2 minutes at a price of 0.333 BTC.
2、「Sub 10K」
Each inscription (Bitcoin NFT) has an inscription serial number. The earlier the mint time, the smaller the serial number. Therefore, NFTs with serial numbers between 10,000 and 100,000 or less are given a layer of "antique" meaning. Although these early inscriptions often have no theme in content, they are hyped for a "time" value.
Currently, the second and eighth minted Bitcoin NFTs, Inscription#2and Inscription #8, have been listed on the Ordinals Wallet marketplace.
The most expensive "Sub 10K" Bitcoin NFT sold so far is Ordinals Punk#87(Inscription #613), which sold for 2.77 BTC. On March 17, the Bitcoin Logo image Inscription#3384sold for 0.31 BTC. The more influential "Sub 10K" series include Ordinals Punks, Bitcoin Shrooms, and Planetary Ordinal, and the most familiar Bitcoin Punks is "Sub 100K".
3. BTC’s native encryption color
Bitcoin Punks is also a perfect replica of CryptoPunks on the ETH chain. The inscription number is also ranked within the first 40K. It is very early and basically held by OG old players. It is also endorsed by OKX. Currently, like BitMonkey, it is the NFT with the largest consensus.
Taproot Wizard officially shared the mental journey of its founder Udi Wertheimer on social media: "On the day of Silicon Valley Bank's bankruptcy and the USDC panic, I decided to launch the Taproot Wizard NFT project today and let people record themselves taking a bath in wizard costumes." It is reported that Taproot Wizard is an NFT project created on the Bitcoin chain, initiated by crypto asset developer Udi Wertheimer, to commemorate Bitcoin's Taproot upgrade and a classic image in the Bitcoin community - the Bitcoin Wizard.
4. Shovel-enabled
Refers to the NFT series that continuously receives valuable airdrops after holding. The most famous "shovel" is BTC Machine, which has subsequently airdropped two projects, BTC Operators and BTC Virus. At present, the floor price of BTC Machine on the Ordinals Wallet market is 0.088 BTC, while the floor prices of BTC Operators and BTC Virus are 0.018 BTC and 0.0012 BTC respectively. It is worth noting that the use of various Bitcoin NFT-related tools is very likely to be airdropped "shovels". Ordinals Wallet airdropped 1,563 Sad Frog-themed pixel PFPs, "Pixel Pepes", to its early users at the end of February. The current floor price of this series is 0.066 BTC. As the current Bitcoin NFT trading market with the top three trading volumes, the value of Pixel Pepes is largely derived from the "shovel" expectations. Since the current Bitcoin NFT-related tools have overlapping functions, it is very likely to attract traffic by airdropping NFTs to users. Therefore, from now on, everyone should pay attention to interacting more with Bitcoin NFT related tools.
3. BTCNFT Trading Market
1. Exchange NFT MARKET PLACE
OKX： https://www.okx.com/cn/web3/nft/collection/eth/bitcoin-punks
Xu Mingxing: OKX Web3 wallet will soon support market transactions for Ordinals and BRC-20 tokens
OKX founder Mingxing Xu said in a personal tweet that so far, OKX has no plans to list brc-20 tokens on centralized exchanges, but the OKX Web3 wallet will soon support the minting, sending, receiving and market trading of Ordinals and brc-20 tokens...
2. Native Ethereum trading market supports ordinarys protocol
Magic Eden Launches Launchpad for Bitcoin Ordinals NFT Creators
3. Bitcoin native trading market
Gamma.io
Gamma, the NFT market on Stacks, was originally named STXNFT and announced its name change to Gamma on April 27, 2022. The platform aims to bring together collectors, creators, and investors in the Bitcoin ecosystem to explore, trade, and display NFTs. The Gamma platform consists of three core products: NFT Marketplace, Launchpad, and Social Platform. Gamma.io supports both the primary and secondary markets for Bitcoin NFTs.
Gamma.io offers a minting method called Gamma bot. Users can use Gamma bot to mint their own unique digital works for collection or sale. Users can mint NFTs with simple commands, without coding or technical knowledge: just add Gamma bot on Discord and enter commands such as create to create an NFT. Gamma.io has also launched a .btc domain name market, allowing users to have their own decentralized identity and website. Register, buy, sell and transfer .btc domain names on Gamma.io, and you can also bind them to your own NFTs.
4. Comprehensive platforms such as inscription engraving and brc20 trading market
Unisats ：
Currently, the BRC20 token issuance and coin-mining platform, inscription engraving platform, and domain name registration can also use this platform, which supports BRC20 token peer-to-peer transactions. It has the largest daily active users and trading users, but currently does not support transactions in the BTC NFT trading market. Of course, due to the large number of users, it also faces frequent freezes and crashes. I look forward to more and more iterations of the product later. At present, the Chinese team has the fastest product speed here.
IDclub:
Domain name and coin-printing engraving platform, but does not support BRC20 token peer-to-peer transactions, nor does it support the BTC NFT trading market.
Current trading market volume rankings
4. The value of BTC NFT
A brc20 token contains at least 546 satoshis and it is impossible for it to return to zero. From this point of view, it is at least more valuable than the air coins on ERC20. Therefore, everyone should have an inclusive attitude towards brc20 tokens. Don't deny it completely, and don't accept it completely. Just wait and see.
Give everyone the right to freely explore the value diversity of Bitcoin fairly. You can certainly create an "NFT series", and you can also use the Bitcoin network as your "diary" to record the words you write, the paintings you draw, the songs you sing... From ancient times to the present, people have recorded their information on the walls of caves, on bamboo slips, on paper, on computers, and now on the Bitcoin network. As long as you think that the Bitcoin network is eternal, then the information recorded on the Bitcoin network is also eternal, and the carrier of information is Bitcoin itself. Nothing is cooler than this.
If you use one word to describe the difference between Bitcoin NFT and Ethereum NFT, what would you choose?
Some people say that Bitcoin NFT is "eternal". As long as you believe that the Bitcoin network is eternal, all the data "burned" on Bitcoin will exist forever. Don't play off-chain, only play on-chain.
Some people say, **say - this is a banknote with a serial number, if you write something on it, will it make a difference? I don't know about Hong Kong dollars, but Bitcoin will! 1 Satoshi = Whatever you inscribed, **This is the biggest underlying value logic difference between Bitcoin NFT and Ethereum NFT.
Some people say that Bitcoin NFT is "historically valuable". Because the order of "burning" of Bitcoin NFT will lead to differences in the serial number size of Bitcoin NFT, the earlier the Bitcoin is "burned", the more valuable it may be in the future, just like the dinosaur fossils of the Jurassic period, the bronze ware of the Shang Dynasty, and the modern steel bars.
Some people say that Bitcoin NFT is "free". From Slik Road, to some online shopping malls, to Amazon and eBay, Bitcoin has been developing along the path of "a more widely accepted currency". The emergence of the Ordinals protocol makes Bitcoin freer. Who knows what additional value a "burned" Satoshi will have? The free flow of the market will give these "burned" Bitcoins new value. One day, we will get the answer to this question. These answers are all showing us the unique charm of Bitcoin NFT compared to Ethereum NFT. (The above quoted Cookie article may be the understanding of the first gathering of the Bitcoin Ordinals community)
5. Challenges that Bitcoin NFT may face
Lack of scale Due to the cost factor of Bitcoin NFT (fully on-chain), it may not be possible to achieve large-scale application and popularization at present. .
Lack of infrastructure: At present, the Bitcoin NFT ecosystem is not yet complete. It lacks relevant infrastructure and application scenarios, and most of them have to rely on over-the-counter transactions. .
The operation threshold is high. Since most Bitcoin NFT transactions need to be conducted off-site, the operation is relatively complicated. For ordinary users, it may be more difficult to understand and use. .
Pushing up Bitcoin network transaction fees Rising Bitcoin network transaction fees are a side effect of adding NFTs to the Bitcoin blockchain, causing the worst Bitcoin transaction block congestion since FTX went bankrupt. .
Violating the basic teachings of Bitcoin. Bitcoin supremacists (Maximalists) believe that Bitcoin NFT violates Satoshi Nakamoto’s original intention of creating a “peer-to-peer electronic currency”. Writing NFT-related data into Bitcoin is undoubtedly a waste of block capacity.
6. Market Outlook
1. Currently, the blue chip project of BTC NFT has not yet determined the pattern, but BitWave seems to have the potential of this 10k series blue chip. For the 10k series, the FP of 1 BTC is a big threshold, but it can be rushed. With the exchanges coming in to support BTCCNFT
2. The future BTC NFT that can come out must be the BTC ecological original series, rather than the Ethereum chain copy paste series, while continuing the PFP gameplay of NFT. Only the BTC NFT that can make the PFP avatar series has the potential to become a blue chip.
3. If the BTC NFT floor price starts at 0.001, the pulling effect will be the best, because with such odds, it basically has the potential to increase 20 times. The current floor price of 0.01B is a threshold, 0.02B is a threshold, and 0.1B can be promoted to the blue chip series.
4. The ETH chain currently has no new narrative gameplay. It has been observed on the chain that in the past half month, many NFT project parties have begun to migrate to BTCNFT entrepreneurship. NFT artists should explore more BTC elements and colors to create.
