What are Ordinals?
Let's find out Ordinals meaning, definition in crypto, what are Ordinals, and all other detailed facts.
Ordinals protocol is a satoshi numbering system that was launched on the Bitcoin mainnet by Casey Rodarmor in January 2023. It employs the ordinal theory to assign a unique identifier number to each satoshi. The order in which satoshis were mined and transferred determines their number. So, the number 0 is assigned to the first satoshi in the first block, followed by 1 for the second, 2 for the third, and so on.
The protocol also provides the possibility of inscribing various types of data (text, image, video, etc.) on satoshis, this way creating unique digital artifacts that can be collected and traded. Therefore, it is now often used for creating Bitcoin-based NFTs, also referred to as ordinal NFTs. Though, you might notice that some refer to these NFTs as inscriptions, which is not entirely correct, as an inscription is the actual content that is encoded on a satoshi.
The creation of the Ordinals protocol was made possible by the Segregated Witness (SegWit) update (which took place in 2017) and the Taproot update (which happened in 2021). The SegWit update added the “witness data” section to a Bitcoin transaction, this way dividing it into two sections and allowing the support for arbitrary data. The Taproot update increased the amount of arbitrary data that could be included in a Bitcoin transaction to 4 MB and established a simpler structure for storing witness data.
What's the Difference Between Ordinal NFTs and Traditional NFTs?
Even though it was already possible to create NFTs on Bitcoin through such Layer-2 solutions as Stacks or Counterparty, the Ordinals protocol brought a unique way of creating on-chain NFTs that are backward compatible and don't require any additional layers or separate tokens.
However, the Ordinals protocol is not recognized by Bitcoin as some sort of an NFT standard, because it is not. So, the data attached to a satoshi doesn't have to be seen as an NFT, which means that a satoshi inscribed with data can be used simply as any other Bitcoin to pay for network fees or make transactions.
Thus, Ordinals inscriptions can be used to create fungible assets as well. A Twitter user named domo (@domodata) recognized this potential and developed an experimental BRC-20 token standard that allows the creation of fungible tokens on the Bitcoin network through the usage of Ordinals inscriptions.
Additionally, due to the complexity of the Ordinals protocol, creating an ordinal NFT is not as easy as creating an Ethereum NFT. You cannot just go to an NFT marketplace and mint your ordinal NFT there. On the contrary, ordinal NFT creation requires having some technical knowledge.
Put as simply as possible, though, you first have to run a full Bitcoin node. Then, you have to install a Taproot-compatible wallet on the node you're running and send a satoshi to that wallet inscribed with the data of your choice. However, since the whole idea of creating ordinal NFTs exploded, no-code ordinal mining applications also started emerging, providing users with an easier way of creating these NFTs.
By factoring in propagation delay and <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-block-time/">block time<\/strong><\/a>, blockchain developers can limit the number of orphans. <strong>However, if the decentralized platform has a long propagation delay and a short block time, an orphaned block is likely to emerge<\/strong>.<\/p>","definition":"a valid block that is not a part of the central blockchain and has no parent block.","status":"published","meta_title":"What is Orphaned Block (Orphan)? Definition & Meaning | Crypto Wiki","meta_description":"Orphaned Block (Orphan) meaning: Orphaned Block (Orphan) - a valid block that is not a part of the central blockchain and has no parent block.","meta_keywords":null}" :prev-section="{"id":572,"wikipedia_url":"https:\/\/en.wikipedia.org\/wiki\/Order_Book","level":"easy","author_id":1,"created_at":"2023-06-19T06:59:00.000000Z","updated_at":"2023-12-07T20:02:19.000000Z","slug":"what-is-order-book","title":"What is Order Book?","section":"O","keyword":"Order Book","content":"<p><strong>An<\/strong> <strong>order book<\/strong> is a physical or electronic document used to record the buy and sell history of an asset on a particular trading platform. While the concept of order books precedes digital technology, most platforms now use electronic order books that use an automatic matching engine to go through the list of buy and sell orders and fulfill them.<\/p>\n<p>Order books contain different information regarding the trading of the asset. This includes the <strong>list of buyers and sellers<\/strong>, and a section for bidding and asking. Asking refers to the sell requests, while bidding represents the <strong>buy orders<\/strong>.<\/p>\n<p>In the traditional structure, all bids are placed on the left side, while the asks are noted on the right. Bids are usually represented by using green, and asks are marked in red.<\/p>\n<p>The interactions between the buyers and sellers can be logged in the order book using a number of visualization tools, such as line charts or tables. <strong>Japanese candlestick charting<\/strong> can be used alongside an order book to observe market changes and make well-informed trading decisions.<\/p>\n<p>Order books typically record <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-limit-order/">limit orders<\/strong><\/a> – orders that use prices set by the trader. If an order uses the <strong>current market prices<\/strong> for the trade, it is considered to be a <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-market-order-market-buy-market-sell/">market order<\/strong><\/a>.<\/p>\n<p>The highest bid prices and the lowest ask prices are written on top of the order book. The difference between the highest bid and the lowest ask is known as the <a href=https://www.bitdegree.org/"//crypto//learn//crypto-terms//what-is-bid-ask-spread/">bid-ask spread<\/strong><\/strong><\/a>, which is used to indicate the strength of supply and demand.<\/p>","definition":"a physical or digital documentation used to track the buy-sell activity of an asset.","status":"published","meta_title":"What is Order Book? Definition & Meaning | Crypto Wiki","meta_description":"Order Book meaning: Order Book - a physical or digital documentation used to track the buy-sell activity of an asset.","meta_keywords":null}" :model="{"id":9197,"wikipedia_url":"https:\/\/en.wikipedia.org\/wiki\/Decentralized_computing#Peer-to-peer","level":"easy","author_id":4,"created_at":"2023-07-19T07:33:34.000000Z","updated_at":"2023-12-04T08:17:10.000000Z","slug":"what-are-ordinals","title":"What are Ordinals?","section":"O","keyword":"Ordinals","content":"<p>Ordinals protocol is a <strong><a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-satoshi-sats/">satoshi/a> numbering system<\/strong> that was launched on the <a href=https://www.bitdegree.org/"//crypto//buy-bitcoin-btc/">Bitcoin/strong>/a> mainnet by Casey Rodarmor in January 2023. It employs the <strong>ordinal theory<\/strong> to assign a unique identifier number to each satoshi. The order in which satoshis were mined and transferred determines their number. So, the number 0 is assigned to the first satoshi in the first block, followed by 1 for the second, 2 for the third, and so on.<\/p>\n<p>The protocol also provides the possibility of <strong>inscribing various types of data (text, image, video, etc.) on satoshis<\/strong>, this way creating unique digital artifacts that can be collected and traded. Therefore, it is now often used for creating <strong>Bitcoin-based NFTs<\/strong>, also referred to as ordinal NFTs. Though, you might notice that some refer to these NFTs as inscriptions, which is not entirely correct, as an <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-are-inscriptions-on-bitcoin/">inscription/strong>/a> is the actual content that is encoded on a satoshi.<\/p>\n<p>The creation of the Ordinals protocol was made possible by the <strong>Segregated Witness (SegWit) update<\/strong> (which took place in 2017) and the <strong>Taproot update<\/strong> (which happened in 2021). The SegWit update added the “<strong>witness data<\/strong>” section to a Bitcoin transaction, this way dividing it into two sections and allowing the support for arbitrary data. The Taproot update <strong>increased the amount of arbitrary data that could be included in a Bitcoin transaction<\/strong> to 4 MB and established a simpler structure for storing witness data.<\/p>\n<h2>What's the Difference Between Ordinal NFTs and Traditional NFTs?<\/h2>\n<p>Even though it was already possible to create NFTs on Bitcoin through such <strong>Layer-2 solutions as Stacks or Counterparty<\/strong>, the Ordinals protocol brought a unique way of creating on-chain NFTs that are backward compatible and don't require any additional layers or separate tokens.<\/p>\n<p>However, the Ordinals protocol is not recognized by Bitcoin as some sort of an NFT standard, because it is not. So, <strong>the data attached to a satoshi doesn't have to be seen as an NFT<\/strong>, which means that a satoshi inscribed with data can be used simply as any other Bitcoin to pay for network fees or make transactions.<\/p>\n<p>Thus, <strong>Ordinals inscriptions can be used to create fungible assets as well<\/strong>. A Twitter user named domo (@domodata) recognized this potential and developed an experimental <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-brc-20/">BRC-20/strong>/a> token standard that allows the creation of fungible tokens on the Bitcoin network through the usage of Ordinals inscriptions.<\/p>\n<p>Additionally, due to the complexity of the Ordinals protocol, creating an ordinal NFT is not as easy as creating an Ethereum NFT. <strong>You cannot just go to an NFT marketplace and mint your ordinal NFT there<\/strong>. On the contrary, ordinal NFT creation requires having some technical knowledge.<\/p>\n<p>Put as simply as possible, though, you first have to <strong>run a full Bitcoin <a href=https://www.bitdegree.org/"https:////www.bitdegree.org//crypto//learn//crypto-terms//what-is-node/">node/a>/strong>. Then, you have to <strong>install a Taproot-compatible <a href=https://www.bitdegree.org/"//crypto//best-cryptocurrency-wallet/">wallet/a>/strong> on the node you're running and <strong>send a satoshi to that wallet<\/strong> inscribed with the data of your choice. However, since the whole idea of creating ordinal NFTs exploded, no-code ordinal mining applications also started emerging, providing users with an easier way of creating these NFTs.<\/p>","definition":"a satoshi numbering protocol that allows the inscription of various types of data on each satoshi, which can be used to create Bitcoin NFTs.","status":"published","meta_title":"What are Ordinals? Definition & Meaning | Crypto Wiki","meta_description":"Ordinals meaning: Ordinals - a satoshi numbering protocol that allows the inscription of various types of data on each satoshi, which can be used to create Bitcoin NFTs.","meta_keywords":null,"author":{"id":4,"user_id":5,"created_at":"2023-05-10T11:56:23.000000Z","updated_at":"2023-05-11T07:19:57.000000Z","title":"Lead Crypto Researcher","slug":"ain-n-lead-crypto-researcher","description":"<p>Ain is the Lead Crypto Researcher. Her vast experience with crypto and blockchain tech-related content allows her to identify the key pieces of information that should be presented to the learner, and ensure the validity of the gathered data.<\/p>\n<p>With a degree in New Media studies, she has developed an extensive list of techniques to educate people via new, research-proven study models based on deduction and long-term human memory.<\/p>\n<p>Ain approaches everything with unequivocal attention to detail. Her main goals are to erase the ambiguity surrounding many Web3 concepts, and to guide content writers in presenting difficult crypto-related concepts in an easy-to-understand manner.<\/p>\n<p>Even though content strategy is her main passion, Ain also enjoys reading high-fantasy books and watching superhero movies.<\/p>","user":{"id":5,"first_name":"Ain","last_name":"N.","email":"ain@bitdegree.org","email_sanitized":"ain@bitdegree.org","email_verified_at":null,"must_verify_email":false,"is_registered_with_wallet":false,"status":"active","country":"LT","last_connected_ip":"88.119.132.125","image_id":2642,"referral_token":"qjnrnAiacl3sNs9U","referred_by":null,"created_at":"2023-05-04T10:07:43.000000Z","updated_at":"2023-12-11T09:14:14.000000Z","full_name":"Ain N."}}}" :chapter-list="[{"id":1,"title":"Blockchain","slug":"blockchain","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-blockchain.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/blockchain-101.jpg","rating":100,"sections":[{"chapter_id":1,"order":1,"slug":"what-is-blockchain","title":"What is the Blockchain?","status":"published","modified_content":null},{"chapter_id":1,"order":2,"slug":"decentralized-blockchain","title":"Anonymous & Decentralized Blockchains: The Cornerstone of Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":3,"slug":"blockchain-transaction","title":"What is a Blockchain Transaction in Crypto?","status":"published","modified_content":null},{"chapter_id":1,"order":4,"slug":"crypto-fees","title":"The Different Types of Crypto Fees Explained","status":"published","modified_content":null},{"chapter_id":1,"order":5,"slug":"what-is-bridging-in-crypto","title":"The Key Notion Behind the Concept of Bridging in Crypto","status":"published","modified_content":null},{"chapter_id":1,"order":6,"slug":"types-of-blockchains","title":"Different Types of Blockchains: What to Look Out For?","status":"published","modified_content":null}]},{"id":2,"title":"Cryptocurrencies","slug":"cryptocurrencies","updated":null,"chapter":"crypto\/assets\/crypto-book\/chapters\/learn-cryptocurrencies.jpg","chapter_simple":"crypto\/assets\/crypto-book\/chapters-simple\/cryptocurrencies-101.jpg","rating":100,"sections":[{"chapter_id":2,"order":1,"slug":"what-is-a-cryptocurrency","title":"What is a Cryptocurrency?","status":"published","modified_content":null},{"chapter_id":2,"order":2,"slug":"how-does-cryptocurrency-work","title":"How Does Cryptocurrency Work?","status":"published","modified_content":null},{"chapter_id":2,"order":3,"slug":"is-cryptocurrency-a-good-investment","title":"Is Cryptocurrency a Good Investment? 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