In the ever-evolving landscape of blockchain technology and NFTs, a new concept has emerged: Bitcoin Ordinals. 

Ordinals seek to bring the creative and expressive potential of NFTs to the Bitcoin network. This innovative approach leverages "Ordinal theory" to inscribe data on the smallest units of Bitcoin, called satoshis. 

By doing so, Bitcoin Ordinals aim to expand the capabilities of Bitcoin and enable the creation and ownership of unique digital assets on its secure and decentralized blockchain.

This article delves into the fascinating world of NFTs before Ethereum and explores the emergence of Bitcoin Ordinals as a unique form of NFTs. Additionally, it uncovers the fundamental purpose of Bitcoin and the ongoing debate surrounding the integration of NFTs within the Bitcoin ecosystem.

Article Outline

• A Brief History of NFTs Before Ethereum

• The Rise of Bitcoin Ordinals

• Can Bitcoin Replace Ethereum?

• Closing Remarks

A Brief History of NFTs Before Ethereum

NFTs have a relatively short history, dating back to just nine years ago in 2014. It all started with the creation of the first-ever NFT called Quantum, minted by Kevin McCoy on Namecoin, a Bitcoin Fork. 

Over the following years, several other NFTs were launched on pre-Ethereum blockchains, laying the foundation for the thriving NFT market we witness today, predominantly powered by the Ethereum blockchain.

Colored Coins (March 27, 2012)

Colored Coins, an open-source protocol built on Bitcoin 2.0, enables users to represent and manipulate immutable digital resources within Bitcoin transactions. These colored coins serve as a means to represent and maintain real-world assets on the Bitcoin blockchain, establishing ownership of such assets. By marking bitcoins with specific features corresponding to physical assets like vehicles or stocks, owners can demonstrate ownership through these distinguishable coins.

Colored coins, often referred to as metacoins, introduce imaginative coloring as metadata to distinguish them from other bitcoins. While some experts debate their classification as the first NFT on the blockchain, colored coins have laid a solid foundation for the development of NFTs and can be seen as an early precursor to Bitcoin Ordinals.

Quantum (May 2, 2014)

In 2014, Kevin McCoy created the world's first NFT, called "Quantum," on Namecoin. This groundbreaking NFT gained significant attention when it was sold for $1.47 million at a Sotheby's auction in 2021.

However, legal disputes emerged due to ownership issues. McCoy originally minted "Quantum" on Namecoin, a blockchain software based on Bitcoin's code, which requires regular renewals of ownership every 250 days.

Unfortunately, McCoy failed to renew it in 2015. Prior to McCoy's 2021 sale, an individual with the Twitter handle @EarlyNFT registered themselves as the owner, leading to complications.

Nevertheless, the sale remains valid, signifying Kevin's successful endeavor to bring this significant piece of NFT history to mainstream awareness.

Eggs (July 27, 2014)

Namecoin, a fork of Bitcoin, was created by Satoshi Nakamoto, the creator of Bitcoin. It was launched in 2011 as a decentralized name registration service, similar to the ENS (Ethereum Name Service) we know today.

In 2014, users discovered they could add metadata to their registered names, including attaching profile images. This marked the origin of the very first profile pictures (PFPs).

Among the PFPs registered, 277 of them were the default Twitter avatars known as "Twitter Eggs." These eggs come in 14 different colors, and collectors have recognized them as some of the earliest on-chain collectible NFTs and PFPs.

Spells of Genesis (March 11, 2015)

Spells of Genesis is a blockchain trading card game that utilizes the Bitcoin blockchain. Each card in the game represents a significant moment in blockchain history through unique artwork.

The release of FDCARD by EverdreamSoft, the creators of Spells of Genesis, marked the first tokenized gaming asset.

This milestone signaled a shift in power, allowing gamers to reclaim ownership of their digital assets from centralized authorities.

The significance of this moment cannot be overstated, as it paved the way for a new era of gaming with true player ownership. When exploring the roots of blockchain gaming, Spells of Genesis stands as a foundational landmark.

SaruTobi (May 6, 2016)

In 2014, iOS developer Christian Moss released the game SaruTobi on the App Store. Although he initially aimed to allow in-game purchases with Bitcoin, Apple's restrictions led him to instead reward players with small amounts of Bitcoin as they played. This marked one of the earliest examples of play-to-earn games.

Years later, Moss discovered EverdreamSoft's work on tokenized gaming assets in Spells of Genesis, inspiring him to introduce NFT skins and power-ups in SaruTobi with the release of NinjaSuit. This marked the first instance of an NFT being used in a play-to-earn game.

The story continued as Moss realized he could attract Spells of Genesis users by enabling them to utilize their game items in SaruTobi. By linking their Counterparty mobile wallet, SaruTobi could read their token inventory and grant access to various features based on their holdings. This led to the groundbreaking interoperability between the two games when Spells of Genesis cards became playable in SaruTobi.

This breakthrough highlighted the potential of NFTs to bridge independent games, hinting at the eventual erosion of the walled gardens within the gaming and social media industries.

Rare Pepes (September 9, 2016)

Rare Pepes (2016)

Rare Pepes are iconic collectible cards deeply rooted in internet culture and played a significant role in the emergence of crypto art on the blockchain.

The Nakamoto Card, Series 1, Card 1, holds a special place among the 1,800 cards issued across 36 series. This card pays homage to Satoshi Nakamoto, the enigmatic creator(s) of Bitcoin. With only 300 in existence, possessing a Nakamoto Card grants entry into the exclusive 300 Club.

Linagee Name Registrar (August 8, 2015)

The Linagee Name Registrar, founded just a week after Ethereum's public launch, is currently recognized as the oldest smart contract on Ethereum.

Although it predates the NFT movement by several years, the Linagee Name Registrar resembles the modern Ethereum Name Service (ENS).

While not a traditional NFT, it embodies the underlying technology that contributed to the popularity of NFTs we see today.

CryptoPunks (June 23, 2017)

CryptoPunks, created by Matt Hall and John Watkinson, have emerged as the top NFT project and a symbol of the NFT community.

These 8-bit avatars, considered both art and collectibles, have gained immense popularity. The rarest alien CryptoPunks, only nine in total, have sold for over $11 million at auction.

Owning a CryptoPunk is seen as a vote of confidence in NFTs and the Ethereum blockchain due to their historical significance.

CryptoKitties (November 23, 2017)

CryptoKitties, a blockchain game that allowed users to breed virtual cats, gained immense popularity during the crypto bull run in 2017, causing Ethereum gas prices to skyrocket. This viral sensation marked the first instance of a blockchain game going mainstream and led to the coining of the term "NFT."

Notably, CryptoKitties was also the first to utilize the ERC-721 token standard, which describes how to create NFTs on Ethereum-compatible blockchains. Despite the misconception of unlimited supply, there are only 100 founder cats and 50,000 Gen-0 cats, making them valuable and sought after by collectors.

Many notable figures in the NFT space, such as Pranksy, Chris Dixon, Nate Alex, and the founders of Axie Infinity, got their start with CryptoKitties.

Early NFT projects struggled to gain widespread popularity and remained largely unknown to the general public, accessible only to cryptocurrency and blockchain enthusiasts.

It was in 2017 that NFTs started gaining mainstream traction, with the launch of the first NFT collections on the Ethereum blockchain.

Unlike previous blockchains, Ethereum's smart contracts made token creation, programming, storage, and trading more accessible and user-friendly.

The Rise of Bitcoin Ordinals

Bitcoin Ordinals are becoming a well-established form of NFT. They use "Ordinal theory" to store data on small units of Bitcoin called satoshis (read “Bitcoin Ordinals: All You Need to Know” for more information).

One of the early standout projects in the Ordinals space was Taproot Wizards, featuring a collection of 2,105 unique and enchanting Taproot Wizards aiming to restore the magic to Bitcoin. The project's first inscription on the blockchain, #652, marked its early entry into this emerging meta.

BRC-20, also known as Bitcoin Request for Comment 20, is the latest trend in the NFT ecosystem (read “Bitcoin Ordinals: BRC-20” for more information).

Amidst this emerging trend, a user known as @BitGod21 emerged, driven by a mission to "define the meta on Bitcoin." They played a crucial role in educating people about this emerging technology, while also introducing the BRC-20 token, $OXBT, which garnered significant attention on Twitter, drawing the interest of notable influencers like Elena and Wale.

Ordinals emerged in December 2022 but gained significant attention in January 2023. Several well-known NFT projects like OnChainMonkey, DeGods, and Yuga Labs have joined the Bitcoin network.

Within just six months since its inception, the number of inscriptions in Bitcoin Ordinals has exceeded 10 million. This indicates a rapid adoption and growing popularity of this NFT form.

The volume of Bitcoin Ordinals has seen a remarkable surge in May, and the number of transactions on the platform remains consistently high, reaching record levels in the past week. This indicates a strong and sustained momentum in Ordinals, with no indications of slowing down.

The Ordinals movement has witnessed a rapid influx of over 130,000 unique users, with a steep upward trajectory that began in May.

When examining the top 15 NFT collections ranked by sales volume in the last month, it is notable that 5 of them belong to Ordinals projects, including two BRC-20 Ordinals.

An important question that then naturally arises is whether Ordinals are a lasting phenomenon or just a passing fad that will eventually fade away.

Can Bitcoin Replace Ethereum?

Despite its quick growth, this innovation has faced large criticism due to high transaction fees as the network gets congested along with some questioning the durability of this technology, questioning whether it’s simply a passing fad.

Bitcoin’s Fundamental Purpose

Bitcoin was created by Satoshi Nakamoto with the intention of establishing a decentralized and secure financial system that operates independently of any central authority. In Nakamoto's vision, Bitcoin would enable peer-to-peer electronic cash transactions without the need for intermediaries like financial institutions. 

While Bitcoin's primary purpose was to serve as a digital currency, some individuals envision it going beyond that role. They see the potential for Bitcoin to evolve into a currency or store of value, similar to how Ethereum operates as an infrastructure blockchain where applications can be built on top of it.

The topic of turning Bitcoin into an infrastructure blockchain, similar to Ethereum, and enabling application development through Ordinals and BRC-20, has sparked a division within the Bitcoin community.

Are There Any Benefits for Storing NFTs on Bitcoin?

The quality of a blockchain is typically assessed based on three key criteria:

• Scalability;

• Security;

• Decentralization.

Transitioning towards an infrastructure blockchain like Ethereum can present scalability issues, as seen with the surge in NFT creation causing exorbitant transaction fees. This issue has also been observed with Ordinals, where the congestion of the blockchain has caused transaction fees to skyrocket.

Initially, Ethereum emerged as a potential solution to address scalability issues in the history of NFTs mentioned earlier. Subsequently, Solana emerged as an alternative to tackle high gas fees. However, this solution came at the expense of compromising security.

To address Bitcoin's scalability challenges, layer-2 scaling solutions such as Stacks have emerged. These solutions aim to make Bitcoin programmable and overcome its limitations. However, it is crucial to consider potential security issues that may arise with these proposed solutions. This highlights the importance of taking proactive measures to tackle these concerns effectively.

Bitcoin Solves Security Problems

The primary advantage of Bitcoin lies in its robust security. The validation of Bitcoin blocks relies on the computational power of multiple computers, a process known as "proof of work." While energy-intensive, this approach ensures a high level of security as manipulating the blockchain would necessitate substantial computational and electrical resources.

However, security concerns related to Ethereum are relatively minor, with most losses occurring due to scams perpetrated by malicious users. Given this, why is there interest in having NFTs on Bitcoin?

According to Casey Rodarmor, the creator of Ordinals, the endeavor is primarily an entertaining artistic project that aims to foster a deeper understanding of Bitcoin among individuals. It serves as a means of encouraging people to delve into the intricacies of Bitcoin and its potential.

Can Bitcoin Replace Ethereum?

Satoshi Nakamoto, the creator of Bitcoin, stated back in 2010 that it couldn't accommodate non-financial purposes, and many Bitcoin supporters still hold that view. Their concern is pragmatic: they fear that NFTs could compete with traditional transactions, congest the blocks, and lead to increased fees.

This debate highlights a divide within the Bitcoin community. Some argue that validating these new blocks containing NFTs will keep miners engaged and incentivized, particularly considering that their rewards are halved every four years, with the next halving scheduled for 2024. Since miners play a vital role in securing the blockchain, it is essential for Bitcoin's stability that they continue their work.

The Web3 ecosystem has witnessed remarkable growth in recent years, thanks to the rise of NFTs, decentralized applications, and smart contracts. Ethereum has played a leading role in driving these advancements.

Ordinals, in essence, seek to reestablish Bitcoin's pivotal position within this evolving landscape of the web. It aims to break away from a conservative perspective that confines Bitcoin to its traditional role. That's the fundamental idea behind Ordinals.

Closing Remarks

TL;DR

Here are the summarized points made throughout this article:

• NFTs, a relatively young concept, emerged just nine years ago in 2014. The journey began with the creation of the first-ever NFT, called "Quantum," minted by Kevin McCoy on Namecoin, a Bitcoin Fork. Over the years, various other NFTs were introduced on pre-Ethereum blockchains, laying the groundwork for today's thriving NFT market predominantly powered by Ethereum.

• Bitcoin Ordinals have emerged as a popular form of NFTs, utilizing "Ordinal theory" to store data on small Bitcoin units called satoshis. The introduction of BRC-20, also known as Bitcoin Request for Comment 20, has further contributed to the rise of Ordinals in the NFT ecosystem.

• As Bitcoin's quick growth continues, criticisms arise regarding high transaction fees and concerns over the durability of this technology, leading some to question its long-term viability. While Bitcoin was originally created as a decentralized digital currency, there are proponents who envision its potential to expand beyond that role, similar to Ethereum's infrastructure for building applications. However, this idea has sparked a division within the Bitcoin community.

At Origins we leverage data-driven decision-making, educational resources, and proprietary analytics to remain ahead of the curve with respect to blockchain tech and specifically NFTs. To find out more, please visit our website or Twitter.

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