Bitcoin NFTs? Ordinals Inscriptions Explained (Finding, Buying, & More)

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Bitcoin Ordinals have taken over Web3 — at least, that’s how it seems. The space has been buzzing since software engineer Casey Rodarmor launched the protocol on January 21, with some excited about the new upgrade and others swearing Ordinals off entirely. Despite all the notoriety, fewer than 40,000 Ordinals exist at the time of writing.

So why are Ordinals so scarce? The vast majority of people simply don’t yet know how to buy them, let alone create them. With higher barriers to entry, that means potential opportunities abound. But it also means higher risks. If you’re ready to take that chance and embrace the potential of Ordinals, we’re here to guide you on how to find, buy, and store them safely. First, it’s essential to understand a few critical points about Ordinals that the average NFT enthusiast might not know.

What are Ordinals?

Each Bitcoin is broken into 100,000,000 units called satoshis (or sats). The new Ordinals protocol allows people who operate Bitcoin nodes to inscribe each sat with data, creating something called an Ordinal. That data inscribed on Bitcoin can include smart contracts, which in turn enables NFTs. In rough terms, Ordinals are NFTs you can mint directly onto the Bitcoin blockchain.

But that’s not exactly right. That’s the short-hand understanding, but there are a few important differences between NFTs and Ordinals.

How are Ordinals different from NFTs?

NFTs on Ethereum (or an Ethereum Virtual Machine blockchain) often point to off-chain data on the Interplanetary File System (IPFS) — a decentralized file storage system, sort of like the Blockchain’s hard drive — that can be changed using dynamic metadata. To illustrate, some NFT projects update the metadata of individual NFTs to improve image quality. They might even ask their holders to click the “refresh metadata” button on OpenSea to get the new, higher-quality image.

This ability to change an NFT’s metadata alludes to a deficiency Rodarmor was trying to improve when he created the new protocol. In Rodarmor’s estimation, NFTs are “incomplete” because many require off-chain data. On the other hand, Ordinals are “complete” in that all the data is inscribed directly on-chain. That’s why Rodarmor refers to them as digital artifacts, not NFTs. Moreover, NFTs often have creator royalties attached to them, whereas digital artifacts do not. According to Rodarmor, an Ordinal “is intended to reflect what NFTs should be, sometimes are, and what inscriptions always are, by their very nature.”

All this to say that Ordinals on Bitcoin may not only signal a cultural change for Bitcoin—they may actually be a technical improvement on NFTs. With that as the backdrop, here’s how to buy, receive, and store your first ordinals.

The most notable Ordinals inscriptions

The Web3 community quickly took note of the fascinating collections and eye-popping sales that emerged shortly after Ordinals launched. Just weeks after going live, individual pieces started selling for hundreds of thousands of dollars. To help ensure you don’t miss out on what could be one of the most exciting developments — and investments — in NFT history, we’ve gathered some of the most interesting and valuable Ordinals Inscriptions to date.

Want to get your hands on some Ordinal Punks, Bitcoin Rocks, or a piece from one of the first-ever 10k collections minted into a single Inscription? We’ve got you covered here.

How to buy and trade Ordinals

Step 1: Get the right wallet

You can’t yet hold Ordinals in a browser wallet like MetaMask. You must set up a Bitcoin wallet that allows enough customization to receive Ordinal inscriptions. Sparrow fits that bill.

  • To start, go to Sparrow Wallet.
  • Click on the download link associated with your computer’s operating system.

Step 2: Set up your wallet(s)

Sparrow wallet is a desktop application that requires a handful of steps to make it compatible with Ordinals. Once you’ve downloaded Sparrow, follow this detailed tutorial on Github to make an Ordinal-compatible wallet. If you follow this guide, you should not send BTC to or from this Ordinals wallet. This wallet is only for receiving Ordinals. If you send BTC from this new Ordinals wallet, you may accidentally send both your BTC and your Ordinal(s).

Now that you have your wallet set up, you have three options for getting an Ordinal:

  1. Run a node and inscribe an Ordinal yourself.
  2. Find an Ordinal owner and buy directly from them.
  3. Use a service to inscribe an Ordinal without running your own node.

We won’t go into the technical details of running a Bitcoin node. If you already run your own node, we can reasonably infer you can figure this stuff out for yourself. Let’s focus on the other two options, keeping in mind that this is all very new and risky. There are no major Ordinals marketplaces yet, so a great deal of trust and caution is required to proceed.

Step 3a: Find Ordinals to buy

The Ordinals market is purely OTC (meaning over-the-counter or peer-to-peer) trading right now.

  • To find Ordinal projects, join the Ordinals Discord channel.
  • Go to the link-your-project channel and see what projects are out there.
  • In that channel, collection creators link their Discords where you can buy their Ordinals.

An important note: Buying Ordinals OTC will require you to break almost every rule you’ve ever heard about not getting scammed in Web3: you might have to connect with people on Discord, send money before receiving an Ordinal, conduct direct transactions with other people, etc. We cannot emphasize enough how much caution is required here. Remember, only ever risk what you can afford to lose.

Step 3b: Use a service to inscribe an Ordinal for you

If you’d like to create your own Ordinal but don’t want to run a Bitcoin node, several services have already popped up to inscribe Ordinals for you.

These services will ask you to provide the BTC address where you’d like to receive your Ordinal. You’ll use your address from the new Ordinal wallet you created in Sparrow. They’ll also provide you with the number of sats you owe for the transaction plus a service fee, as well as an address for you to send the BTC to. The transactions can range from less than $50 in BTC to several hundred dollars, depending on your file size.

If you send the BTC, and this trust-heavy transaction goes according to plan, you won’t receive your Ordinal in your wallet in seconds or minutes. It could take hours or days.

Tedious, risky, and full of potential 

As you can see, if you want to be early in the Ordinals market — like “out of bed before the rooster crows” early — you’ll have to string together a web of tedious tasks to make it happen. But that opportunity could be worth it. Just be careful and learn what you can before venturing forward. Ready to dive deeper? We recommend going directly to the source: Rodarmor’s Ordinal Theory Handbook.



Source
Bitcoin NFTs? Ordinals Inscriptions Explained (Finding, Buying, & More) is written by Nft now Staff for nftnow.com

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