The Rise of Ordinals: Innovating on the Bitcoin Blockchain
Bitcoin, as the first blockchain and cryptocurrency, has set the foundation for the entire crypto market. However, its protocol has remained stable and unchanged to protect its value and global trust. As a result, innovation and activity have shifted to second- and third-generation chains. But now, a new technology called Ordinals is bringing innovation back to Bitcoin without altering its code.
Unlocking Tokenization on Bitcoin with Ordinals
Ordinals is a protocol built on top of the Bitcoin blockchain that allows tokens to be issued without changing Bitcoin’s code. It enables unique identifiers for each satoshi (100 millionth of a Bitcoin) and facilitates the transfer of these tokens over the Bitcoin network. Initially, minting and trading Ordinals required technical knowledge, but code-free solutions have made it more accessible.
BRC-20 Tokens: A Tokenized Ecosystem on Bitcoin
Ordinals has paved the way for Bitcoin-based non-fungible tokens (NFTs) and fungible tokens similar to Ethereum’s ERC-20 tokens. These Bitcoin-native assets are known as BRC-20 tokens and have gained market traction. Projects like $SATS, a memecoin with a supply based on Bitcoin’s total supply, have made Bitcoin fun again while educating newcomers about its architecture.
Taproot Upgrade: Enabling Token Minting on Bitcoin
The Taproot upgrade, implemented in November 2021, made token issuance possible on the Bitcoin network. It allows data to be added to block space, enabling the minting of tokens. BRC-20 tokens work differently from ERC-20 tokens due to their unique JSON data structure. While some Bitcoiners have reservations about BRC-20 tokens, communities are forming around shared tokens and interests.
The Future of BRC-20 Tokens on Bitcoin
The BRC-20 standard on Bitcoin is still in its early stages, similar to Ethereum’s ERC-20 in 2017. However, key infrastructure is being developed to connect Bitcoin tokenization with other chains. The potential for BRC-20 tokens to deliver opportunities and replicate Ethereum’s success is promising. For supporters who seek innovation beyond Ethereum and Bitcoin maximalism, Ordinals and BRC-20 tokens bring back the experimental and creative roots of Bitcoin while offering potential financial gains.
Hot Take: Ordinals Reshaping Innovation on the Bitcoin Blockchain
Ordinals has sparked a new wave of innovation on the Bitcoin blockchain by enabling tokenization without changing its code. With the emergence of BRC-20 tokens, a tokenized ecosystem is forming around Bitcoin. While Ethereum took time to realize its potential with ERC-20 tokens, Bitcoin has the opportunity to follow a similar path. As infrastructure connecting Bitcoin tokenization with other chains develops, the landscape of BRC-20 tokens will evolve. For those seeking a return to Bitcoin’s experimental roots and the chance to make money, Ordinals and BRC-20 tokens offer an exciting opportunity in the crypto market.
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