19th February 2023 > > Ordinals.

tl;dr

Ordinals are leading the way for BTC adoption. But somehow, the maxis don’t like it. Odd to say the least.

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BTC is toying with us.

Enthusiasts are keen to see a decisive (and hopefully permanent) breach to the upside of $25k. The denialists are desperate in their desire to see BTC go back to at least the depths of despair following all the centralised frauds perpetrated by old-school criminals using old-school methods in 2022.

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Curious Cryptos’ Commentary – Ordinals

A very recent development in the world of Bitcoin, Ordinals are causing a bit of a rumpus amongst the Bitcoin population, with some maxis stating their disapproval of the entire concept.

Ordinals owe their existence to the Taproot upgrade which we covered in the CCC dated 23rd October 2021. Taproot was designed to bring smart contracts and DeFi (Decentralised Finance) to Bitcoin, with improvements to one’s privacy using Schnorr signatures, which are beyond my remit – or knowledge - to explain. Ordinals are an unforeseen benefit/catastrophe of Taproot, depending on your point of view.

Taproot allows for the identification of an individual Satoshi, the smallest unit of Bitcoin. So small in fact that each BTC is made up of 100mm Satoshis. Each Satoshi is currently worth 0.00025c.

A Satoshi can be inscribed with data such as text, images, videos, game cards, membership passes, in-game items, and so on. Such a feature on other networks is known as an NFT (non-fungible token) but there is one very clear distinction. NFTs are simply a link to data held off-chain. Ordinals inscribe that data directly into the BTC blockchain, making them 100% tamper and future proof.

Wow, I hear you gasp in delight.

The very first Ordinal was inscribed on 14th December 2022, with this rather fetching image:

Since then, the production of Ordinals has taken off. According to a report by BitMEX (https://blog.bitmex.com/ordinals-data/) dated 9th February 2023 the graph of the cumulative number of Ordinal transactions looks like this:

Another report by Dune Analytics, which is updated daily, has plenty of other equally impressive graphs (https://dune.com/dataalways/ordinals) but states that the number of Ordinals now totals 138,665. That is a nearly 10x increase in just 10 days since the BitMEX report.

The Dune report also includes a link to every Ordinal yet created. You might regret me pointing that out – I have already wasted too much time today having a look at random ones. Maybe it’s my version of TikTok.

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There is of course a secondary market. No-one will be surprised to read that the biggest sale so far is for an Ordinal Punk. Punk #94 sold for 9.5 BTC - nearly a quarter of a million dollars. Minted as Ordinal 620, this is what you get for your money:

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The creation of the very first Ordinal obviously required technical knowledge and understanding of how blockchain technology works far beyond the reach of almost anyone.

Once the concept had been invented, and proven to work, there was still a need to run a full blockchain node and use base layer commands to create your own Ordinal. Again, far beyond the reach of almost anyone.

But one of the truly awesome aspects of crypto tech is the pace of innovation and development that leaves all other industries in the shade. Just 57 days after the first Ordinal was created, Gamma.io launched a tool that allows us non-techies to mint our own Ordinals:

https://gamma.io/ordinals

Word of warning please. This tech is so brand new, but it is not yet battle tested. If you want to play around with it, I suggest – no, in fact I demand – you set up a brand new BTC wallet (*) and fund it with a small amount of BTC. Let me know how you get on. The best Ordinal from a CCC reader will get a prime position in my personal (physical) art gallery.

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I was going to finish today with a summary of the rumpus referred to at the beginning of today’s missive.

I have now changed my mind. The research I have done this morning has convinced me that the maxis are talking rubbish. I can’t be bothered recycling their arguments. They make no sense to me.

Ordinals are a fabulous invention for crypto adoption.

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(*) On this occasion I will allow you to use a web-based wallet, but don’t expect me to be always this lenient.

I haven’t used a BTC web-based wallet since 2017 so I am not the best person to ask for recommendations but Blockchain.com was my go-to back in the day (DYOR):

https://www.blockchain.com/en/wallet