Since their astronomic explosion in 2020, NFTs have been mainly minted and traded on smart contract-enabled chains like Ethereum, layer-twos, and Solana.
However, introducing Ordinals inscriptions has changed the standard while leveling the playing field for the oldest Proof of Work chain, Bitcoin.
Bitcoin non-fungible tokens have become the new rave in the digital representation landscape. It has opened a new opportunity for exploring digital assets and building an artistic ecosystem within Bitcoin.
Created by Casey Rodarmor, Ordinals expands Bitcoin’s capability to support on-chain NFTs native to the chain following the Taproot Upgrade.
At its all-time high, Ordinals saw an amazing rise in daily inscriptions, surpassing 500,000 in 24 hours, with sales totaling over $450 million in May 2023.
Despite the growing popularity of Bitcoin NFTs and Ordinals inscriptions, many people still find it impossible to mint and trade NFTs on Bitcoin. Fortunately, this article will take you through the intricacies of Ordinal NFTs and how to trade them on Bitcoin.
What are Ordinals?
Bitcoin Ordinals are fast becoming the most important development for the Proof of Work network, Bitocin, and the whole web3. The Ordinals are the simplest and most basic unit of Bitcoin, imprinted as serial numbers in a satoshi.
The Ordinal system gives a unique way of identifying and numbering Satoshis – a way to track transactions in Bitocin’s publicly distributed ledger. Fundamentally, Satoshis are numbered and arranged according to how they are mined and transferred in a Bitcoin.
This way, each Satoshi is transferred as a unit entity and traded as a one-of-a-kind rarity. Ordinal system for Satoshi are important because any data or value attached to a Satoshi can be easily identified. This individual identity also allows for embedding digital assets, including pictures, texts, videos, etc, in digital representation.
How Ordinal Inscriptions Work on Bitcoin?
Inscription is simply the process of assigning digital value to a unique satoshi. Similar to NFT minting, inscriptions allow anyone to embed digital assets in a native Bitcoin chain.
Meanwhile, Satoshis differ in their rarity based on the total Bitcoin supply. These include:
- Common satoshis: any satoshi other than the first satoshi of each block. There are 2.1 quadrillions of common sats.
- Uncommon satoshi: the first satoshis of each block. There are 6,929,999 supplies of uncommon sats.
- Rare satoshi: the first satoshis after the adjustment of Bitcoin mining difficulty. There are 3437 supply of rare sats.
- Epic satoshi: the first satoshis after each halving. There are 32 epic sats.
- Legendary satoshi: the first satoshis after every cycle. There are 5 legendary sats.
- Mystic satoshi: the first satoshi of the Genesis block. There is only one mystic sats.
Inscribing assets in a satoshi was made possible by two important upgrades within Bitcoin. These are the Segregated Witness scalability upgrade and Taproot Upgrade.
Introduced in 2017, the Segregated Witness upgrade allows the network to support the transfer and transmission of larger amounts of data. This improved the Bitcoin’s block limit and, thus, increased the amount of arbitrary data it could take.
On the other hand, the Taproot Upgrade improved the scalability and security of data stored in a block. This upgrade controls the amount of secondary and arbitrary data exposed to Bitcoin’s publicly distributed ledger using the Taproot script-path spend scripts.
Although these upgrades were not primarily intended for NFT and digital representation, they eventually improved Bitcoin’s scalability towards providing the necessary infrastructure for inscribing data and value within a satoshi.
Unlike traditional NFTs stored in a sidechain or off-chain file managers like Interplanetary File System (IPFS), Ordinal inscriptions are always stored on-chain. This way, they are inherently immutable, secure, permissionless, and decentralized.
This paved the way for newer use cases and a wider usage of Bitcoin in digital representation.
How to Mint Bitcoin NFTs?
Conventionally, minting Bitcoin NFTs requires the creator to run Ord on a full Bitcoin node. Afterward, they can inscribe value into an Ordinal wallet and mint Bitcoin NFTs. Unfortunately, in addition to the expert technical skill required, the cost of running a 500GB full node is a caveat for creators.
However, a straightforward way to mint NFTs on Bitcoin is by using Ordinal inscribing tools like Gamma and Ordinalsbot. All you have to do is set up an Ordinal-compatible wallet like Leather (Hiro), Xverse, or Unisat wallet.
Fund the wallet with Bitcoin and inscribe your NFT on Gamma. The inscribed NFT will be sent to your wallet, after which you can list and sell on any Bitcoin NFT marketplace.
To set up an Ordinal-compatible wallet like Xverse:
- Download Xverse Wallet
- Set up Xverse Wallet
- Fund your wallet with Bitcoin
Download Xverse Wallet
To download the Xverse wallet on your PC, go to https://www.xverse.app/ and click on DOWNLOAD > DOWNLOAD FOR CHROME.
This will direct you to the Google Chrome Extension Store. Start the installation by clicking ADD TO CHROME.
For mobile phone users, search for XVERSE WALLET from iOS App Store or Google Play Store for Android devices.
Tap the download button to start the installation.
Set up Xverse Wallet
After downloading the wallet, open the app to start set up.
To create a new wallet, accept the Terms of Services and Privacy Policy. Continue by backing up your 12-word seed phrase.
Ensure you keep your seed recovery safe to avoid unauthorized access to your crypto asset.
Finalize the setup by setting up a strong and unique wallet password. Click CONTINUE, and that’s all.
Fund your wallet with Bitcoin
After setting up a new wallet, it is important to fund it with enough Bitcoin, especially for inscription and network fees.
Usually, the cost of inscribing an NFT can range from $3 to $200 – depending on how fast you want the inscriptions completed.
You can easily fund your wallet from any CEX like Binance, Coinbase, or Kucoin.
All you have to do is open your Xverse wallet from the upper navigation bar of your browser and log in with your wallet password.
Once you’re in, click on BITCOIN > RECEIVE. Copy the Bitcoin deposit address and use it to receive Bitcoin from your CEX account. Alternatively, you can save the deposit QR code and scan it on the withdrawal page of your CEX.
After setting up and funding your wallet, here’s a step-by-step guide to minting your Bitcoin NFT:
- Compress image file
- Upload the NFT file to Gamma
- Set Transaction Fee
- Input Ordinal address
- Complete Transaction
Compress image file
A big caveat of minting NFTs on Bitcoin is the limited block space. Unlike off-chain IPFS file managers or on-chain scalability solutions, Bitcoin blocks cannot take huge files.
For image NFTs, the size is limited to 60kb for JPEG files and 200kb for GIFs.
Therefore, if your NFT is larger than 60kb, you must resize and recompress before uploading for inscription.
You can easily reduce the size of your NFT using online tools like TinyPNG. Go to www.tinypng.com on your web browser.
On the homepage, click the upload button to open your File Explorer and select the image file. You can also drag and drop the file to the box provided.
Wait for your image file to upload and compress. Once compression is complete, download the result.
Upload the NFT file to Gamma
After preparing your NFT file, go to https://gamma.io on your web browser. On the homepage, click on CONNECT WALLET and select your XVERSE WALLET.
Approve the connection in the prompt that pops up in your wallet, and you’re in.
Inscribe a new NFT by tapping CREATE from the top right corner of the homepage.
Specify whether you’ll be inscribing a single asset or a collection of artwork, then tap CONTINUE.
Creating a Single Inscription for Yourself
To create a single inscription for yourself, select the asset file – whether it’s a single image, bulk image, or text file. As noted earlier, image and text files should not exceed 60kb, while GIFs should not exceed 200kb.
Meanwhile, higher resolution can go as large as 360kb. However, the higher the resolution, the higher the gas fees.
Browse and upload the image file from your File Explorer. For text files, click on TEXT as file type – and fill up the empty field provided for TEXT inscriptions.
Create Collection Mint
To create a collection mint, click on CREATE COLLECTION MINT.
Proceed by providing the necessary information about your collection and its type. Select the collection type and provide a detailed description, such as collection name, collection description, and email address.
Continue by uploading the collection’s web address, logo, and collection content, including images or videos. Alternatively, you can upload the collection metadata via a formatted CSV file.
Ensure you double-check all submitted details because you won’t be able to change them once the NFT smart contract has been deployed.
Set Transaction Fee
After uploading your NFT file, set your transaction fee. The higher your transaction fee, the higher the success rate and the faster the completion time.
Typically, inscribing an asset can take between minutes to days. Therefore, setting a reasonably higher fee can get your file inscribed faster.
If your fee is insufficient to complete an inscription or the process is incomplete, a refund will be issued to your wallet. Select a preferred transaction fee or set the sats/vByte manually.
Input Ordinal address
Submit the address you want the Ordinals to be deposited after it has been inscribed.
To activate your Ordinals address, open your Xverse wallet and click the SETTINGS icon from the bottom right corner.
In the settings, scroll down to the ORDINALS section and toggle the DISPLAY ORDINALS button.
Switch to the second tab dedicated to your NFT/Ordinals asset, click RECEIVE, and copy the Ordinals deposit address.
Paste the address under RECIPIENT BITCOIN ADDRESS in Gamma. Input the refund address where a refund can be sent. Finally, input your email address (this is optional) to track the minting process via your email.
Complete Transaction
To complete the inscription, you need to send the inscription fee to the specified Bitcoin address in Gamma.
Open your Xverse wallet with your password. From the home screen, click BITCOIN > SEND. Paste the transaction amount and then the fee recipient address.
You can also save and scan the deposit QR code supplied by Gamma, hit NEXT, and CONFIRM the transaction.
Go back to Gamma and click CONTINUE. You can track the minting process from a blockchain explorer via your email address or wait till you see the inscription in your wallet.
How to Buy and Sell Bitcoin NFTs?
After inscribing your Ordinal, you can list it and sell it on any BRC-20 NFT marketplace. Meanwhile, if you want to get and hold a bluechip NFT, you can easily explore your favorite collection on any Bitcoin Ordinals marketplace, like Gamma, Magic Eden, or Ordswap.
Here’s a step-by-step guide to buying and selling Bitcoin Ordinals on Gamma.io:
Steps to buy Ordinals on Gamma
- Go to Gamma.io on your web browser and click on CONNECT WALLET from the top right corner of the homepage.
- Ensure your wallet is funded with enough BTC before browsing the marketplace. You can explore available collections from options in the top navigation bar for TOP COLLECTIONS, MINTING NOW, and EXPLORE COLLECTIONS.
- You can also look for a particular collection using the SEARCH button.
- Once you find your preferred collection, hover your mouse on the NFT to preview before clicking BUY NOW.
- You can also click on the NFT to have a detailed asset description, including trading history, rarity rank, floor price, and current listing price.
- A wallet transaction will pop up in your Xverse wallet. Confirm the transaction, and the NFT will appear in your Ordinals collection after completion.
Steps to list and sell Ordinals on Gamma
- To sell your NFT on Gamma, navigate to Gamma.io and connect your Xverse or Leather (Hiro) wallet from the top right corner of the homepage. Authenticate connection by signing another prompt in your wallet.
- Once you’re in, go to your Gamma profile by clicking your wallet address from the top right corner.
- In your profile, you’ll see all the NFTs available in your wallet under the COLLECTED tab. Select the NFT you’d like to sell and click LIST.
- A list form will pop up for you to specify the listing price, which includes artist royalties and marketplace fees.
- Click on LIST and confirm the transaction in your wallet.
Magic Eden is another BRC-20 NFT marketplace where you can easily buy and list your Bitcoin Ordinals for sale. Here’s a step-by-step guide to trading Bitcoin Ordinals on Magic Eden:
Steps to Buy Bitcoin Ordinals on Magic Eden
- Get started by going to magiceden.io/ordinals on your web browser. On the top right corner, click on CONNECT WALLET and approve the prompt that pops up in your wallet.
- Once you’re in, you can explore available collections or use the search button to look for your favorite collection.
- Click on any collection you want and go through the NFTs. You can use in-collection filters or randomly pick any NFT and tap BUY.
- This will automatically bring out all the details about the NFT, including collection details, inscription details, trading activities, etc.
- To continue with the purchase, select the preferred Bitcoin network fee and click BUY again.
- However, before making your first purchase on Magic Eden’s Bitcoin Ordinals, you must prepare your wallet.
- A message will pop up on your screen, instructing you to prepare your wallet since it is the first time you’d use it to buy Bitcoin Ordinals.
- Click PREPARE YOUR WALLET from the message and confirm the transaction that follows in your wallet.
- The NFT transaction prompt will pop up afterward. Approve the transaction and wait for Bitcoin to confirm the transaction in 5-10 minutes.
- You can also track the transaction progress from the user interface.
Steps to List Your Bitcoin Ordinals for Sale on Magic Eden
- After buying or minting your Ordinals, you can list it for sale in Magic Eden.
- After connecting your wallet, go to your Magic Eden profile by clicking on your wallet from the top right corner of the homepage.
- Under MY ITEMS, view available inscriptions and click on LIST from the Ordinals you want to sell.
- Input the listing price and continue by clicking on LIST NOW. Review listing details before approving the listing in the prompt that pops up in your wallet.
- Once the NFT has been sold, your Xverse or Leather wallet will be credited with an equivalent amount of Bitcoin or Stacks tokens.
Conclusion
Since its launch, Bitcoin has predominantly been a peer-to-peer network for trading Bitcoin. However, Bitcoin Ordinals and inscriptions have given a new and ingenious utility that can aid further development and proliferation of innovative change on Bitcoin.
Within months, Bitcoin Ordinals surpassed many smart contract chains in NFT trading volume and user activity. Many PFP projects and creators, like Yuga Labs, DeGods, MegaPunks, Beeple, etc, have started creating amazing digital representation projects on Bitcoin.
With Ordinals, programmers can focus on making Bitcoin more scalable and efficient for creators and traders, which can ultimately give Bitcoin the might to topple Ethereum and Solana as the primary network for NFTs, token-based projects, and DeFi.
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