A proposal to add NFTs to Bitcoin’s network was sent to the Bitcoin developer mailing list in February 2022. Each Satoshi (a unit in Bitcoin) would be assigned an ordinal number. This number would then be linked with additional information like text, images, videos and games. This would allow for digital artifacts (or NFTs) to be stored on the Bitcoin Blockchain.
The Key Takeaways from Ordinals and Inscriptions of BTC NFTs
What’s an Inscription?
- An Inscription is a digital asset that can be stored on the Bitcoin blockchain and allows for the creation and transfer unique digital artifacts.
- It differs from other tokens in that it is stored in the OP_RETURN area of a Bitcoin transaction. This field can store a small amount.
- Inscriptions enable the creation of digital artifacts unique and non-fungible that can be used for many purposes, including art and collectibles.
How does it compare to NFTs for Ethereum?
- Inscriptions differ from NFTs on Ethereum because they are fully stored on-chain. This makes them immutable, and completely decentralized.
- NFTs on Ethereum use token standards like ERC721 and ERC1155 to create collections, each with a unique tokenID.
- Another difference is the fact that creating or transferring NFTs on Ethereum can lead to high transaction costs. However, the transaction fees for sending Inscriptions are relatively low thanks to Taproot’s transaction fee optimizations.
- Inscriptions have a potential drawback in that all content on the blockchain is permanently stored, even any illegal or unsavory content.
Where can I find Inscriptions
- All the ordinals can be found by clicking here
Origin of Ordinals and Bitcoin NFTs
There have been mixed reactions to the proposal from the crypto community. Some see it as an exciting new use for Bitcoin. Others believe that Bitcoin should be kept as a digital cash system and not transformed into anything else. Concerns are raised about possible increases in transaction fees and increased resource requirements on nodes.
To create an NFT, you need to create a Bitcoin transaction. This will store the additional information (called an “Inscription”) in one of the output addresses. The block size limit limits the data size. It can be text, images or SCG. Unlike traditional Bitcoin transactions, which use an OP_RETURN method to add additional data, the Ordinal approach stores metadata inside the transaction. It makes use of the 2021 Segwit Update that allows up to 3MB witness data to be stored beyond the 1MB block limit.
An NFT can be transferred by assigning it an ordinal number that is based on the first in-first out algorithm. Then, it can be transferred using a Bitcoin transaction. Some Ordinals may not have Inscriptions, so it is possible that some transactions will involve an NFT.
There has been much debate about whether NFTs should be added to the Bitcoin network. Some people support the idea of digital artifacts being stored on the Bitcoin blockchain, while others are concerned about their potential consequences. To create and transfer NFTs, a Bitcoin transaction must be created with additional data or an Inscription. Each Satoshi will then be assigned an ordinal number.
It’s amazing, so what are Inscriptions?
An Inscription, in the context of Bitcoin Ordinals is metadata attached to a bitcoin (satoshi). It is extra data stored in a Bitcoin transaction. The block size limit limits the Inscription’s size. This additional data can be any type of data, including text, images, sound files and HTML. Inscriptions are intended to give each satoshi its own unique digital artifact by creating non-fungible properties that can be used for bitcoin.
The Inscription data is stored in the raw transaction data. It is created by creating Bitcoin transactions that store the additional data (the Inscription), in one of the output addresses. The Inscription process is two-phased. The first phase commits the taproot output to the script that contains the Inscription content. This content is serialized in the transaction using a form called an “envelope”. The second phase is to create another transaction that reveals the Inscription information. This will reveal where the output of the commit transaction was spent and the Inscription content on blockchain.
Each satoshi’s Ordinal number is used to link an Inscription to a specific Bitcoin. This allows the digital artifact to also be transferred in a transaction. Some Ordinals do not have Inscriptions. Users can create and attach Inscriptions to bitcoins however they wish.
TLDRInscriptions allow users to attach metadata or other digital assets to bitcoins. This creates unique digital artifacts. This allows Bitcoin to be used in new ways beyond its original purpose of being a digital currency. It has the potential for new and exciting uses.
Here’s an example of data and inscription
How does this compare with ethereum NFTs, you ask?
Inscriptions are a different approach to NFTs on Ethereum. On Ethereum, NFTs can be created using token standards like ERC721 or ERC1155. They are assigned a unique token ID that allows them to be identified, as well as the account for the collection’s smart contract. Due to the complexity of NFTs, it can be costly to mint them or transfer them to Ethereum. The cost of sending Inscriptions to Taproot is much lower thanks to the optimization of Taproot’s transaction fees on Bitcoin.
The difference is that all Inscriptions are stored directly onto the blockchain. This makes them immutable, fully decentralized and completely indestructible. This is in contrast to NFTs on Ethereum, where metadata could be removed if the centralized storage system goes down or if the project alters the metadata. This means that all illegal or unwanted content in Inscriptions will be preserved on the chain for ever, despite the immutability benefits. Already, there have been cases of Inscriptions that are obscene. It is only a matter time before more illegal imagery is added. These images can be blocked by websites that provide Ordinal data, but they will still be available on the blockchain. This issue isn’t unique to Inscriptions. It has been an issue with arbitrary data storage on Blockchains since their inception.
What about Stacks the BTC Layer 2 Solution.
Both Inscriptions and Stacks Layer 2 NFTs relate to the creation of and use digital assets within a blockchain context. They do have some differences in their underlying technology, how they are created and their features.
Stacks Layer 2 NFTs can be built on the Stacks Blockchain, which is a Layer 2 scaling solution to the Bitcoin blockchain. NFTs can be stored and created on the Stacks blockchain more efficiently than they are on the Bitcoin Blockchain. The Stacks Layer 2 NFTs are able to be used in a variety of applications including digital collectibles and gaming items as well as digital art.
Inscriptions are digital assets that can be stored on the Bitcoin blockchain. Each Inscription is assigned a unique token that can be used to refer to it. They are encoded using Bitcoin’s scripting language. Inscriptions, unlike NFTs on smart contracts blockchains like Ethereum are completely on-chain and thus immutable and can be decentralized. This also means that they cannot be edited or deleted. Furthermore, any illegal or unsavory content stored as Inscriptions will remain on the blockchain for ever.
TLDR: Inscriptions can be compared to curio cards
Where can I find a technical walkthrough of the product?
Tara Annison’s medium article is great and can be found here.
NFT CULTURE’s first article, Ordinals are Bitcoin NFTs: An Overview of Inscriptions, appeared first on NFT CUTURE.
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