Potential of NFT on Bitcoin

While the concept of NFTs has ignited the imagination of artists, collectors, and tech enthusiasts, integrating this innovative mechanism into the fabric of Bitcoin’s ecosystem marks a notable departure from its traditional role. This article ventures deep into the realm of Bitcoin Ordinals, shedding light on its transformative approach distinct from conventional NFTs and unveiling its far-reaching implications for the blockchain landscape. We will dissect this novel development’s mechanics, applications, and potential challenges as we explore uncharted territory.

Within these digital pages, we will meticulously dissect the common data intricately tied to NFT Ordinals, presenting our findings for your attention. You can find more details at this link: 

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Investigate AMLBot Investigation results on Ordinals

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This article aims to provide a comprehensive overview of Bitcoin NFTs, supplemented by essential statistical insights that lend depth to your understanding. We will consider the major data about this type of NFT and technical aspects and learn how to create and earn on Ordinals NFT. Our AMLBot team is a specialist in the field of data, and we are happy to provide crypto enthusiasts with deep insights to ensure informed and deliberate decisions not only in AML and crypto security but also in the crypto world. 

What are Bitcoin Ordinals? 

Ordinal NFTs have a fascinating history closely intertwined with the development of the Bitcoin Protocol. In 2017 and 2021, the SegWit and Taproot updates to the Bitcoin Protocol were implemented. These updates were not specifically designed to enable ordinal NFTs but to increase the amount of arbitrary data stored on-chain within a block. This meant more space was now available for storing images, videos, and even games.

As a result of these updates, it became possible to create and store ordinal NFTs on the Bitcoin blockchain. This unintentional but exciting development opened up a whole new realm of possibilities for using NFTs. Today, ordinal NFTs are becoming increasingly popular, and their unique properties are being explored by creators and collectors alike.

The popularity of Ordinals NFTs starts in April 2023, when we can see the increasing number of inscriptions.

One inscription is equal to a unique NFT minted. 

Bitcoin Ordinals are a pioneering advancement that ventures beyond traditional notions of Bitcoin as a digital currency, opening doors to a realm where each satoshi—the smallest unit of Bitcoin—becomes a canvas for inscribing metadata, images, JSON data, and text. Spearheaded by visionary developer Casey Rodarmor, this innovation holds the potential to mark the genesis of NFTs (Non-Fungible Tokens) on the world’s premier cryptocurrency.

What is the concept of Ordinals NFT?

The first step in creating Ordinals is for users to download Bitcoin Core and sync the node to the blockchain. After the sync is completed, the next step is to create an Ordinals wallet and send some satoshis to the wallet. 

You can attach images, GIFs, and text to a sat to create an inscription through inscribing. To inscribe sats, you need the ord open-source software and a Bitcoin node.

For September 2023, the total amount of users that participated in the process of verification NFT reached 

Minters – wallets (entities) that participate in the mint process

Ord implements the numbering scheme as per the ordinal theory’s methodology. That means the serializing of sats doesn’t happen at the Bitcoin protocol level, and the on-chain footprint doesn’t exist. Nonetheless, Ordinals transactions are confirmed and recorded on the Bitcoin blockchain.

How to create NFT on Bitcoin?

Tools Required: To perform inscribing and create Ordinals NFTs, you need to use the Ord open-source software and have access to a Bitcoin node. These tools allow you to interact with the Bitcoin blockchain and attach metadata to specific satoshis.

Ordinal Theory Methodology: Ord follows the numbering scheme according to the ordinal theory’s methodology. This means that the serialization of satoshis doesn’t occur at the Bitcoin protocol level. While there’s no explicit on-chain footprint for these serialized satoshis, the Ordinals transactions are confirmed and recorded on the Bitcoin blockchain.

Integration with Bitcoin: It’s important to note that the Ordinals project achieves its functionality by integrating with the existing Bitcoin blockchain. This means that Ordinals NFTs operate within the Bitcoin ecosystem and don’t require the creation of a separate blockchain or token.

Taproot Integration: The integration of Taproot, a significant upgrade to the Bitcoin protocol, is advantageous for the operation of Ordinals. Taproot enhances security, inscriptions, and block size, which can contribute to the effectiveness and robustness of the Ordinals NFTs.

If you prefer other types of earning on crypto, you can check my article about quantitative trading. But if you are interested in crafting Bitcoin NFT Ordinals, keep reading, let’s see how we can earn from it.

Difference between Ordinals and simple NFTs

The main difference between Ordinals NFTs and other NFTs is data storage. Most NFTs are created using the Ethereum blockchain through the ERC-721 Non-Fungible Token Standard. Ordinals NFTs, on the other hand, are digital assets inscribed on a satoshi, the smallest unit of Bitcoin. This allows users to record different types of metadata (such as images, videos, PDFs) on satoshis and directly create and store Bitcoin-based NFT on the Bitcoin network. 

For September 2023, the Total inscription number of unique mined NFTs reached 

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Inscriptions engrave satoshis with custom content, forming distinct digital artifacts that can be stored in Bitcoin wallets and exchanged through Bitcoin transactions.

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Ordinals represent a novel way of storing Bitcoin transaction information and thus made its first breakthrough in the NFT space. Another key difference is that Ordinals NFTs are always stored on the Bitcoin blockchain, making them more decentralized and secure compared to traditional NFTs, which are stored on decentralized applications using self-executing smart contracts like EVM

Differences between Ordinals NFTs and traditional NFTs:

Aspect	Ordinals NFTs	Traditional NFTs
Storage Location	Stored directly on the Bitcoin blockchain	Stored on various blockchains or DApps
Decentralization	Highly decentralized due to Bitcoin’s network	Reliant on contract logic and platforms
Security	Inherits robust security of the Bitcoin protocol	Security varies based on blockchain and contract
Metadata Recording	Metadata recorded on individual satoshis	Metadata stored within contract data
Liquidity Potential	Linked to Bitcoin’s high liquidity	Liquidity varies based on platform
Immutability	Inherits Bitcoin’s immutable transaction history	Immutability dependent on blockchain and contract
Supply Restrictions	Tied to the fixed supply of Bitcoin	Supply varies based on NFT platform
Rarity	Rarity benefits from Bitcoin’s scarcity	Rarity varies based on platform
Network Challenges	Faces challenges like limited block space and complex operations	May face scalability and gas fee issues
Ecosystem Suitability	More aligned with Bitcoin-centric ecosystems	May vary based on the specific use case
Development Complexity	Potentially complex due to Bitcoin network challenges	Development depends on the platform and tools
Market Maturity	Emerging concept with evolving market dynamics	More established NFT markets exist

The most popular type of Ordinals NFT

In the early days of the Ordinals era, the blockchain community strongly preferred minting images as NFTs. 

However, a closer examination of the landscape reveals a fascinating transformation – the most popular Ordinals NFT type has shifted towards text-based creations.

As we delve into this investigation, we’ll trace the journey of Ordinals NFTs, dissecting the dynamics that have led to this notable transition. What began with images dominating the Ordinals landscape up until April 11th has now given way to the rapid ascent of text-based NFTs. In recent times, text NFTs have surged, claiming nearly 95% of all minted Ordinals.

The most common Ordinals NFT type is simple text. 

What is text NFT?

Text-based NFTs are a lesser-known but equally influential digital asset that can tokenize written content, creating unique and valuable opportunities for creators and consumers. They can potentially revolutionize various sectors, including education and literary publications.

In the realm of education, text-based NFTs can transform the way we approach learning. From tokenizing educational materials to creating unique, gamified learning experiences, NFTs can significantly alter the educational landscape1. Imagine a textbook that could be automatically updated through its blockchain connection or the resale and reuse of textbooks made more accessible and secure through NFT technology.

Text-based NFTs can transform the literary world in literary publications by allowing authors to tokenize novels, short stories, and poems. This offers authors greater creative control and the ability to earn royalties directly from their works12. Tokenizing literary works as NFTs can save authors legal and operational costs traditionally associated with publishing12.

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You can explore a demonstration of a text-based NFT on the “In Writing” platform. This platform empowers users to transform any desired text into an NFT. For instance, by minting the text “:-),” you would become the proud owner of this particular NFT. This innovative approach provides an exceptional means of generating and possessing digital content.

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While image-based NFTs have dominated the market, text-based NFTs can potentially revolutionize the world of art and realms of education, literary publications, and more. 

How to create Ordinals for crypto enthusiasts 

Several services are available that facilitate the creation of Ordinals NFTs, offering users a seamless way to leverage the unique capabilities of the Bitcoin blockchain. These platforms enable individuals to inscribe metadata and content onto satoshis, transforming them into distinct NFTs. Among the notable options is:

• Gamma: Gamma provides a user-friendly interface for creating Ordinals NFTs. It streamlines the process of embedding metadata onto individual satoshis, resulting in the creation of Bitcoin-based NFTs. The platform focuses on simplicity and accessibility, making it an excellent choice for those new to the concept.
• Unisats: Unisats offers a specialized service for creating Ordinals NFTs. With Unisats, users can inscribe various metadata onto satoshis, enhancing their value and uniqueness. The platform is designed to ensure a seamless experience for creators and collectors of Ordinals NFTs.
• Magic Eden: another platform that empowers users to mint Ordinals NFTs on the Bitcoin blockchain. Through its user-friendly interface, Magic Eden makes the process of inscribing metadata onto satoshis straightforward, allowing creators to unleash their artistic vision in the world of NFTs.
• OrdinalsBot: OrdinalsBot is a service that operates within messaging platforms like Telegram. It allows users to create Ordinals NFTs directly through these platforms, simplifying the creation process. By following the prompts provided by OrdinalsBot, users can transform their content into Bitcoin-based NFTs.

Popular Platforms for Buying and Selling Ordinals NFTs

• Ordinals Market: Ordinals Market provides a marketplace where users can explore, buy, and sell Ordinals NFTs. The platform offers a user-friendly interface, making it convenient for both creators and collectors to engage in transactions.
• Ordswap: Ordswap serves as a platform for trading and exchanging Ordinals NFTs. Users can list their NFTs for sale and browse through listings to find Ordinals that resonate with their interests.
• Magic Eden: in addition to its NFT creation service, Magic Eden offers a marketplace where users can discover and acquire Ordinals NFTs. The platform’s focus on user experience contributes to a seamless buying and selling process.
• Gamma: Gamma, known for its creation service, provides a marketplace where users can trade Ordinals NFTs. This integrated approach allows creators to mint NFTs and then easily offer them for sale.
• OKX NFT Marketplace: The OKX NFT Marketplace extends its support to Ordinals NFTs, allowing users to explore a diverse range of NFTs, including those inscribed on the Bitcoin blockchain.

As a plus, we investigate ordinary sales on different marketplaces. The next one shows how much sales we had on different marketplaces:

Ordinal sales peaked at May – mid-June with all-time highs at points higher than 17k and 22k. Since then, the number of sales has decreased slightly, whereas traded volume sharply declined on July 15th. Starting from that time, volume decreases towards zero.

And here we can see the amounts in BTC that were sold: 

• Firstly ordinals sales were mostly on Ordswap and Ordinals wallet. Around 2 weeks in May UniSat has a major number of sales which generated the most volume till the big player MagicEden took all the traffic.

Specialized Categories:

• Ordinal Punks: Some specialized NFTs, like Ordinal Punks, have unique communities and platforms. These can involve setting up a special wallet and participating in specific Discord channels for buying, selling, and interacting with others interested in these specific NFTs.

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The environmental impact of Bitcoin Ordinals is a topic of debate. Some argue that creating and using Ordinals NFTs could contribute to the already high energy consumption associated with Bitcoin mining. Others argue that the environmental impact of Ordinals NFTs is negligible compared to other industries and that the benefits of using blockchain technology for secure and decentralized transactions outweigh the environmental costs. It’s important to note that the environmental impact of any technology is complex and depends on many factors, including how it is used and the energy sources used to power it. 

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Top traders and gainers in Bitcoin NFT

We have found individuals are the top traders and gainers, the maestros orchestrating a symphony of transactions and investments within Ordinals NFTs. Let’s see who has earned more.

One notable observation is the considerable amount spent on fees, totaling 7.257 BTC, indicating the active engagement within the Ordinals NFT ecosystem.

The most significant spend on fees was 7.257 BTC.

But the most interesting part was when we found top traders of NTF Ordinals. 

The most intriguing aspect of this chapter lies in the discovery of the top traders in the world of Ordinals NFTs. We present a table showcasing the leading wallet addresses, highlighting the top two solid leaders who have generated substantial profits, with earnings of 215 BTC and 180 BTC, respectively. Additionally, we feature addresses that have earned less than 50 BTC, providing a comprehensive overview of the earnings landscape.

The summarized data in the table includes essential metrics such as sales, purchases, sold volume, purchase volume, and balance for each wallet address. This information offers valuable insights into the trading activities and profitability of these top players:

Address	Sales	Purchases	Sold Volume	Purchased Volume	Balance
bc1pyl6g53k220rggaukyx929qnnxqw8vzt8xrfw88muw22pnwfvqjkqreeqpw	1785		215.27818237		215.27818237
bc1pwjwark0zjt2h4a7mj0s5fqftr6nduljmrcyhdyqdpk9jwmayn4ysvdu8xy	7	12	180.978	0.89232879	180.08567121
bc1plvwsqagswuyk3akaewazqcpfsuvuz6k5zusewsy7qey5r7z2ag6qz5e0f6	182	68	48.25072212	1.62900576	46.62171636
bc1p9p3fdmht06uxcec2gde29ccmemhhmv3f4haes730uwr6rml6ghuqm28s0v	2		44.758		44.758
bc1plxnrg23ky8v7unxznucgjnlza0upr6cn87kukne049p2d6lwgxtsagjt4c	288		36.09501818		36.09501818
bc1pxrvyzrfwam74l3sz8dvw0ltl7fgj9mgl4d5chpmvdrul73hnlyvsjpuv3t	502	58	31.83609018	1.05092548	30.7851647
bc1p487203h2stypf3u04557ujrngedcnpncmvfqpju9guaupdj358ds6mvmwa	466	42	28.8972702	0.22162476	28.67564544
bc1pedv9etyz66x7ken3rztapd7u5x8qmnmmz22ue6h4hskdjvx56heqhhzcha	9203		25.79905251		25.79905251
bc1pa8uvszv3rje6cs22f5cq8xwu8udfyageppnw6vv5s4mv5t6dxcxqcs0tz5	186	32	27.3371306	1.740358	25.5967726
bc1ptwd6dwkkf6f8yq32gvpx4aggnnfu3vwvjgdpf50gwl5k5wjz3hmsjh0679	576	822	38.01373672	12.67727688	25.33645984
bc1q6jrxv8fytjhsjpgduljuqwquh5erfw6q2tnmgn	1206	356	37.54016364	13.6036421	23.93652154
bc1p278g49fpr78zc3klvlmg3sacu0gcryddx2f5r3apnujqx39j0eushxum3t	157		23.3455		23.3455
bc1pa0mnaynqxs79ndavg244tau5xm6vpue3uzw2aq0vn9klw5qezcps7cx9uy	80	20	30.08760004	6.87414447	23.21345557
bc1p2cqsr26tqq9rafddrqca5llz9k4n6thegzlfh2n3et46nf8qx9cqm6v6tx	892	416	37.91703784	15.53066608	22.38637176
bc1py2qhrm5wvsqydr5z44d29ymvkz0306tcy4e4tuzc6xrztmpmvw3slhptmn	565	27	24.605841	2.245807	22.360034

As we analyze the data, it’s worth noting that some of these NFT traders have not only purchased NFTs but have also created them; we marked them in green.

We spotlight the first wallet address in the list, which is

bc1pyl6g53k220rggaukyx929qnnxqw8vzt8xrfw88muw22pnwfvqjkqreeqpw

, which has listed NFTs on Ordiscan, providing a link to their profile, Ordinal Maxi Biz (OMB).

Link to the profile: Ordinal Maxi Biz (OMB)

One of the purchases of the 2D leader is  Twelve Frog #219

And the 3d one Ordinals trader is a happy owner of at least 

ZLand (Inscription #8446521)

The data presented here is valuable for those looking to venture into this exciting space. By analyzing the successes and strategies of top traders, as well as exploring the most successful projects and collections, you can gain valuable insights and ideas to inform your journey into the world of Ordinals NFTs.

Remember that the Ordinals NFT ecosystem continually evolves, presenting new opportunities and challenges. Staying informed and learning from the experiences of those who have succeeded can be a valuable step toward navigating this dynamic landscape.

Famous Ordinals NFTs

Ordinal Punks

Ordinal Punks, which pay homage to CryptoPunks, is a set of only 100 NFTs produced within the first 650 Inscriptions on the Bitcoin chain, with the highest Inscription in the collection occupying position 642 on the chain. The anonymous Web3 developer FlowStay used an open-source algorithm to produce the generative PFP collection of 192192 pixel images.

The community is essentially using the project creator as an escrow on Discord because the infrastructure of Bitcoin requires users to run a full Bitcoin node in order to create an Inscription. Therefore, bids and asks for Ordinal Punks are taking place on a Google Sheet managed by FlowStay.

Taproot Wizards

Starting with Inscription 652, independent Web3 developer Udi Wertheimer’s Taproot Wizards is an Ordinal collection of hand-drawn NFT wizards. It is claimed that the first Ordinal in the collection, which was 4MB in size, is the largest block and transaction in the annals of Bitcoin.

Bitcoin Rocks

Bitcoin Rocks pays homage to early Ethereum NFT collections by channeling the aesthetic and spirit of Ether Rocks, one of the first NFT collectible projects on the Ethereum network. This collection, which has a supply limit of 100, was created by ordrocks, who minted the first rock in it at Inscription 71. Some NFTs are listed for up to 1,000 BTC/13,858 ETH (more than $22 million), depending on the model. The current minimum bid is 0.10 BTC.

Timechain Collectibles

A highly limited set of only 21 Ordinals, the Series 1 Timepieces from the Timechain Collectibles collection features timepieces in a variety of settings, including cyberpunk watches, pocket watches, ancient calendars, and more. All of the coins in the collection, which were all inscribed on January 30, 2023, were produced in a single block and have the sequential Inscription numbers 356-377. A genesis Inscription at Inscription 356 serves as the collection’s fulcrum.

Ordinal Loops

Beginning with Inscription 452, Ordinal Loops are among the Inscriptions with the lowest numbers among Bitcoin Ordinals. The NFT, also known as Object 0, is a rotating mathematical torus and one of only seven comparable animations that make up the first of the Ordinal Loops team’s three planned series drops. The project’s first NFT in the collection represents the current narrative chapter, titled “Do Not Fiat,” in which “Bitcoin ASCII fights the army of five main government currencies – ad infinitum.”. There are currently no direct OTC buying opportunities for collectors, according to Ordinal Loops’ Discord, and everyone interested must take part in auctions.

Conclusion 

The emergence of Ordinals NFTs within the Bitcoin ecosystem represents a paradigm shift in the NFT space. These unique digital assets inscribed on satoshis provide a novel approach to NFT creation and ownership. With increasing platforms and tools available, the Ordinals NFT community continues to expand, creating new opportunities for creators and collectors alike.

While the environmental impact of Ordinals NFTs remains debatable, their potential to transform various industries, including education and literary publications, is undeniable. Text-based NFTs, in particular, offer a new dimension for content creators and learners to explore.

In the ever-evolving landscape of blockchain and cryptocurrency, Ordinals NFTs stand as a testament to innovation, pushing the boundaries of what’s possible within the Bitcoin network. As this exciting journey unfolds, it’s clear that Ordinals NFTs are here to stay, leaving an indelible mark on the crypto world.