Metapep Labs (of which I am a co-founder) hosted a space about Bitcoin Ordinals that was attended by 1200+ people live (with hundreds more already having listened to the recording). Our special guest was D++, a Bitcoin educator and developer. The resulting session lasted for 9 consecutive hours was hailed by some listeners as a masterclass in Bitcoin ordinals.
Metapep has spent its existence deep in the communities and tech of web3, primarily on EVMs, although we as co-founders have previous experience with Bitcoin dating back to 2013. While much of our work has focused on developing staking + battle royale NFT games, token launches, gamified mints, and our artist launchpad, recently Metapep has established our own infrastructure to inscribe ordinals and have been inscribing these NFTs to the Bitcoin blockchain.
Perhaps our varied perspective and experience combined with that of our guests, is why the Bitcoin Ordinals space we hosted two days ago was so epic. Our other guests in the space included a member of the Ordinals Team, Bitcoin Devs, a Bitcoin Wallet company, a seed investor of an ordinals auction platform, as well as an ordinals marketplace (the last of which caused some controversy, but I’ll get to that later.)
The purpose of this article won’t be to recap the space, but to provide an overview of key facts that came to light during our debate and knowledge sync to help newcomers who are just dipping their toes into the world of Ordinals.
What are Bitcoin Ordinals?
Bitcoin ordinals are satoshis (also called sats) that have been inscribed with a piece of data, often media like an image of video file. For this reason, people have been calling ordinals “Bitcoin NFTs”.
What are Satoshis?
Satoshis are the smallest units of Bitcoin. It takes 100 million sats to equal one whole Bitcoin.
Satoshis, though they are fungible, are no stranger to having values placed on them by collectors. As D++ pointed out on Metapep’s space, some collectors value Satoshis that have certain patterns in their numbers, perhaps that could spell out a name. Other collectors prize Satoshis minted in the first block following a halving event, marking them as more rare to those who prize that data.
This phenomenon can also be seen with fiat. For example, some quarters are worth far more than 25 cents if they have a quality that is deemed rare. Example: some 2004 Wisconsin state quarters have a misprint that garnered sales up to $2,000 USD, a far stretch from its face value.
What are Key Differences Between Ethereum NFTs and Bitcoin Ordinals?
There is a major structural difference between NFTs on any other chain (Ethereum, Solana, Tezos, Avalanche, Polygon, etc.) and Bitcoin.
When an NFT is created on a chain like Ethereum, it’s comprised of a media file, a json file, and a smart contract. The json file and media file are stored on a server or a more decentralized mechanism like IPFS (The Interplanetary File System). The smart contract correlates each token ID with a link to its media file and its corresponding json file for metadata. The image and metadata are not stored on the blockchain, but referred to by data on the blockchain.
This is a key difference between NFTs as we currently know them an Bitcoin ordinals.
The media component (inscriptions) that makes a sat an ordinal is actually stored on the Bitcoin blockchain itself.
Why is this important?
As long as bitcoin exists, the media attached to the ordinals will exist. Whereas, if an Ethereum project stores images on a private server and the project rugs or the founders retire after some years, they may stop paying for that server and the NFT holders will no longer have access to that image. Even IPFS, though widely regarded as something that will be around for a long time due to its decentralized nature, may not be immune to time.
How are Ordinals Traded?
Right now, the ordinals market is in its infancy and buying & selling can be very precarious. Many private deals have been made in discords – which can be dangerous – and I was listening to one gentleman who claimed he lost nearly half a Bitcoin in a trade that wasn’t fulfilled by a purported ordinal seller.
With only roughly three weeks since ordinals launched, an auction platform and a market place have already popped up – but in the rush to be first to market, there are serious questions about security that I am aware of with the latter. The marketplace Ordswap.io forces sellers to expose their private keys in order to execute the partially signed Bitcoin transaction to fulfill the order. I’ve written two articles already that mention the importance of keeping your private keys private.
This was a passionate discussion in the space last night about the exposure of users’ private keys to their Bitcoin wallets with the point raised by Post Capone, a member of the Ordinals team. He expressed disappointment and frustration that the marketplace Ordswap.io is currently billing themselves as ‘Trustless’ and compromising their users’ security in their race to be one of the first ordinals marketplaces. So, it’s important to caution users of that site to be aware of this fact. Ordswap says they are rapidly in development and working to move away from that model as quickly as possible, but that doesn’t change the fact that some people may not understand the security implications of using their site at this point.
I don’t know much about how the other auction platform + marketplace scarce.city functions from a technical standpoint – but it appears by their FAQ that they are not custodial of the ordinal prior to the sale but rely on the seller to fulfill the transaction. The seller pays a listing deposit of 5% and must manually send the ordinal to the buyer within 24 hours after the conclusion of the sale.
I do not endorse either of these companies, but am keeping an eye on the progression of this space.
How are Ordinals Inscribed?
There are many inscription services popping up. As I mentioned earlier, Metapep now has our own infrastructure to inscribe ordinals, so f you are an artist who is looking to inscribe your work as a Bitcoin NFT, you can reach out to Metapep via our Discord at discord.metapep.com.
Conclusion
If you are interested in more content about Bitcoin NFTs, I appreciate your feedback! Leave me a comment and let me know. We’ll be hosting another ordinals space on our Twitter next week at https://twitter.com/metapeplabs.