33.8 C
Dubai
Monday, May 27, 2024
HomeGuest ArticleBeyond the cultural value ―how useful are Bitcoin NFTs?

Beyond the cultural value ―how useful are Bitcoin NFTs?

Date:

Related stories

Bitcoin started its journey on the market as a store-of-value asset whose main features included decentralization and trustless models. As Bitcoin’s value increased rapidly in the past years, discussions about global adoption got more serious, even for governments, so we can expect the cryptocurrency to become the new worldwide legal tender at some point in the future. 

However, since the digital environment is continuously developing, it’s no wonder that Bitcoin became involved in a new area of investment ―Ordinals, or NFTs. These assets were familiar to blockchains like Ethereum or Solanathe ordinal update allowed Bitcoin to tap into the world of NFTs.

Despite the fact that this mixture has great potential, many are skeptical about Bitcoin Ordinals and their usefulness, considering they’re being introduced into a world where the internet culture of memes and trends is leading the way. So, how could they bring any value to the industry?

Defining Bitcoin Ordinals

Bitcoin Ordinals are newly introduced elements in the crypto world, launched at the beginning of 2023 by Casey Rodarmor. The underlying asset is a combination of a Satoshi, the smallest Bitcoin unit, and a rare media piece, such as text or an image. The Satoshi is embedded in the data piece, more precisely, giving it its trading value.

Ordinals protocol is based on the Taproot and Segregated Witness (SegWit) technologies that make transactions performant and facilitate data recording. These features are part of the inscription and validation phase, two essential steps in which transaction inscriptions start to look like NFTs and miners add them to the blockchain for incentives.

Recognizing the differences between Ordinals and NFTs

Comparing Ordinals to NFTs is practical to understand their purposes, but they’re significantly different. Although they both can be found on marketplaces like Magic Eden, their only common aspect is the link with the internet subculture of memes and entertainment. NFTs have been known for their unique portrayal of famous memes, such as Nyan Cat, Doge and Pepe the Frog. 

Similarly, Bitcoin Ordinals can be used to create trendy content that appeals to communities that prefer Bitcoin rather than Ethereum. 

Traditionally, NFTs have the following features:

  • Smart contract-based chains;
  • Fast scalability;
  • Art, collectibles and virtual land content;

On the other hand, Bitcoin Ordinals are:

  • Based solely on Bitcoin;
  • Struggling with large data payloads;
  • Focusing on texts, video games and memes;

Hence, due to their newness, Ordinals still have to work on some aspects that make them inferior to NFTs. However, they provide more robust security, immutability and potential than NFTs. 

Taking advantage of their usability

Indeed, their link with images and memes might not make Ordinals seem like the most valuable digital assets on the market. But that’s far from the truth because Ordinals can be used for various reasons that benefit users.

Just like traditional NFTs, Bitcoin Ordinals can be bought, sold, and traded on different marketplaces, but since these environments are less competitive and popular, Ordinals might suffer from low liquidity and interest.

You only need to search for appropriate wallets that support the Ordinal protocol. Due to their technological features, there are specific digital tools for buying, selling, and trading them. Still, there are ways to trade them through P2P systems.

There have been many popular Ordinals collections recently, such as Ordinal Punks, an alternative to the original CryptoPunks or Taproot Wizards, combining inscriptions with the Taproot technology. Most offer unique designs and visuals while tying them to the underlying Bitcoin asset. 

Identifying Ordinals’ potential

BTC Ordinals are considered innovative by the community, which sees them as a chance for the cryptocurrency to become more sustainable in the long run. Considering that block rewards will sometimes disappear with the last Bitcoin mined, Ordinals can create the demand for these elements so miners won’t have to rely on transaction fees to sustain their activity.

Additionally, Ordinals can attract developers who are focused on blockchains like Ethereum or Solana, renowned for their tool and technology library, to Bitcoin-based applications and technologies. Plus, since Ordinals are based on the Bitcoin blockchain, they might ensure more security, decentralization and censorship-resistance than regular NFTs.

Still, when it comes to tackling security issues, some investors are skeptical about Ordinals because the lack of a legal framework might expose them to scams and frauds. Unfortunately, some believe that more block space means higher fees and network congestion, which may be possible.

Reasoning Ordinals’ bright future

Despite continuous discussions, Bitcoin Ordinals have unique features that set them apart from other crypto elements on the market. For example, the innovative fractional ownership allows investors to fraction Bitcoin, supporting accessibility and inclusivity.

Moreover, their eco-friendly approach makes them appealing to an audience that values sustainability above all. This increasing trend in the world of cryptocurrencies and digital assets has become decisive above profit and accessibility, especially since Bitcoin mining has become 

one of the most energy-intensive on the market.

But what’s more important is that Bitcoin Ordinals showed how a simple asset can become elevated with basic implementations and a switch of mindset. After all, who would’ve thought that Bitcoin could become the next measure for NFT-like assets when its main purpose was to be a reliable store of value? The community-driven improvement for both Bitcoin and NFTs proved that the crypto industry isn’t volatile only regarding price but also when it comes to addressing trends and new accessibilities.

What’s your take on Bitcoin Ordinals?

Bitcoin Ordinals have been compared to traditional NFTs for a long time, but primarily only for a better understanding. BTC Ordinals are unique because they link Satoshis with media sources, like texts or memes, and create a valuable and tradeable asset that contributes to the expansion of the crypto market. Still, due to the lack of a regular framework, Ordinals have not yet achieved their full potential.

Subscribe

Latest stories