Will Ordinals Fix Bitcoin’s Security Budget?
Ordinals brought NFTs to the Bitcoin network. What are the pros and cons?
by Juan Aranovich
What Are Ordinals?
Ordinals theory is a new technology that has been recently integrated into the Bitcoin network, which provides a unique identifier for each satoshi. The technology enables the tracking, transferring, and adding of metadata to these satoshis, effectively transforming them into non-fungible tokens (NFTs).
The rarity of each NFT, which Ordinals creator Casey Rodarmor refers to as Digital Artifacts, is determined by the position of the satoshi within a block, which can be classified as common, uncommon, rare, epic, legendary, or mythic, with the rarity increasing as the position of the satoshi becomes more unique.
Currently, Ordinals are only accessible through specialized wallets that support the technology. Unfortunately, there is a lack of reliable infrastructure such as marketplaces, explorers, and analytics. However, the potential of Ordinals is massive, and it could revolutionize the world of NFTs. As the technology develops and becomes more accessible, it could lead to new opportunities for artists, collectors, and investors in the crypto space.
Controversy
The introduction of Ordinals on the Bitcoin blockchain has sparked controversy within the community.
Inscribing data on the blockchain reduces the fungibility of BTC. Also, NFTs created through Ordinals take up valuable block space, leading to congestion in the mempool and higher transaction fees. Additionally, there are concerns regarding the impact on node storage requirements and chain bloat. Before Ordinals, block sizes over 1MB were rare, but this has dramatically changed since their introduction.
Despite these concerns, proponents of Ordinals argue that the technology offers a significant level of decentralization, as the metadata of each satoshi is stored on-chain and does not rely on centralized servers. Ordinals also have the potential to add value to individual satoshis, as rarity can be a desirable characteristic for certain collectors.
And most importantly, the increased usage of block space by Ordinals could pave the way for solving Bitcoin’s security as the block subsidy decreases.
It remains to be seen whether Ordinals will gain wider adoption and what their long-term impact will be on the Bitcoin network. However, Ordinals represent an intriguing development in the world of NFTs, with the potential to add additional utility and value to the Bitcoin network.