Ordinals (Bitcoin)
Ordinals is a protocol that allows arbitrary data — images, text, code — to be inscribed directly onto individual satoshis (the smallest unit of Bitcoin), turning each satoshi into a unique, identifiable, transferable digital artifact. The result is Bitcoin-native NFTs.
✦ Key Insight
Ordinals brought a new asset class to Bitcoin and a new fee-paying demand to the base layer, materially affecting miner revenue and block space competition. For traders, it created an entire market — Bitcoin NFTs, BRC-20 tokens, Runes — with distinct liquidity venues and patterns.
✕ Common Misconceptions
Treating Ordinals like ERC-721 NFTs — they require specialized wallets and indexers.
Spending an inscribed satoshi as regular Bitcoin and losing the inscription.
Ignoring high fee periods when minting or transferring.
Detailed Explanation
How It Works: A satoshi is identified by its ordinal number — its position in the total Bitcoin supply since genesis. The Ordinals protocol uses an off-chain indexer to assign these numbers and to read inscription data embedded in the witness portion of Taproot transactions. Owning the satoshi means owning the inscription.
FAQs:
Are Ordinals "real" NFTs? Yes, in the sense that they are unique, on-chain digital assets — just with a different design than EVM NFTs.
Will Bitcoin core protocol change to support them better? Ordinals work today via existing Bitcoin features; deeper protocol changes are debated.
In Practice
Dig Deeper
NFT
An NFT (non-fungible token) is a unique cryptographic token on a blockchain that represents ownership of a specific digital or physical asset and cannot be exchanged on a one-to-one basis like fungible cryptocurrencies.
BRC-20
BRC-20 is an experimental token standard for issuing fungible tokens on the Bitcoin blockchain using the Ordinals protocol. It inscribes JSON-formatted text into individual satoshis to define token deployments, mints, and transfers.