Ordinal, a new way to use and acquire content using Bitcoin, allows creators to leverage the utility of non-fungible tokens (NFT) directly from the blockchain allowing them to create NFTs that are essentially native bitcoin NFTs. This has stirred the pot in some circles, with some debating whether this is a use case for the Bitcoin blockchain and how this new use case will affect Bitcoin nodes and fees in the future.
Ordinals Enable Bitcoin NFTs Courtesy of Taproot
Newfound use cases for the Bitcoin chain are currently being tested by individuals who have found a way to get content directly onto the blockchain. This project is calledOrdinalscalled
and launched just a few days ago, which as part of its functionality allows anyone to create bitcoin NFTs (called inscriptions). This opportunity was inadvertently opened by the Taproot upgrade the network received in November, which extended the length of Bitcoin transactions to almost the full size of a block.
This is key to what is happening now: prior to Taproot, transactions were only 80 bytes in size, limiting the usability of what was stored in block space. Now, Bitcoin NFTs are stored directly on the chain, allowing for the portability, durability, and decentralization benefits that characterize Bitcoin.
Given that each piece of content stored on the blockchain via Ordinals must be synchronized by each node there, giving the blockchain itself a lifetime, this could present unique advantages to content creators and users There are Most NFT projects that use other chains, including Ethereum, only store pointers to information that does not reside directly on the blockchain.
Controversy behind the new feature
While there are ostensible benefits surrounding the adoption of bitcoin NFTs, the rise of this new feature has sparked an old debate about the true function of the network and what constitutes an attack on the bitcoin ecosystem. There are already two groups of people in this public debate: those who support this new face of Bitcoin and those who believe that this is a spam attack and should be avoided and censored.
The first group argues that this is a net positive for the chain and will help bring in more fees and use cases for the chain. This is the case of Dan Held, a well-known Bitcoin influencer, who believes that each transaction that pays a fee is not spam and that the chain is permission-less, which anyone can build upon it (30).
The second group says that even if there is nothing that can be done to stop it, this would hurt the financial and transactional use cases for bitcoin. Adam Buck, CEO of Blockstream, believed to be Satoshi Nakamoto, is a member of this factionand says that bitcoin users “can educate and encourage developers”