The cryptocurrency community is split on whether the recent launch of a nonfungible token (NFT) protocol on the Bitcoin mainnet will benefit the Bitcoin ecosystem.
The protocol, named “Ordinals,” was created by software engineer Casey Rodarmor, who announced it on the Bitcoin mainnet via a blog post on January 21.
What does Ordinals do?
The protocol allows for the Bitcoin equivalent of non-fungible tokens, which are referred to as “digital artifacts” on the Bitcoin network.
These “digital artifacts” could be JPEG images, PDFs, or audio or video files.
However, the protocol’s introduction has divided the Bitcoin community, with some claiming that it expands Bitcoin’s financial applications and others claiming that it departs from Satoshi Nakamoto’s vision of Bitcoin as a peer-to-peer cash system.
Dan Held, a Bitcoin bull, was among those who supported the development, noting that it would increase demand for block space — and thus fees — as well as expand Bitcoin’s use cases.
Some have pointed out that these NFT-like structures have taken up block space on the Bitcoin network, which may result in higher transaction fees.
Among them is the Twitter user “Bitcoin is Saving,” who argued to 237,600 followers on January 29 that “privileged wealthy whites” who want to use JPEGs as status symbols may exclude marginalized people from the Bitcoin network.
According to Eric Wall, a cryptocurrency researcher, Bitcoin’s block size limit would prevent an increase in transaction fees.
Others, such as Blockstream CEO and Bitcoin core developer Adam Back, were dissatisfied with the introduction of meme culture into Bitcoin and suggested that developers channel their “stupidity” elsewhere:
However, Ethereum bull Anthony Sassano, the host of The Daily Gwei, chastised the Blockstream CEO for wanting “unwanted” transactions to be censored, which many believe goes against the Bitcoin ethos:
Ordinals brings memes to life on Bitcoin
Rodarmor explained in a blog post that NFT-like structures are created by inscribing arbitrary content into satoshis, the Bitcoin network’s native currency.
These satoshis, which are represented cryptographically by a string of numbers, can then be secured or transferred to other Bitcoin addresses, as Ordinal’s technical documentation said.
Send the satoshi to be inscribed in a transaction that reveals the content of the inscription on-chain. This content is then inextricably linked to that satoshi, transforming it into an immutable digital artifact that can be tracked, transferred, hoarded, purchased, sold, lost, and found again.
Based on the document, the inscriptions take place on the Bitcoin mainnet and do not require a sidechain or a separate token.
Only 277 digital artifacts have been inscribed as of yet, according to the Ordinals website.
Rodarmor revealed on the Hell Money Podcast on August 25 that Ordinals was created to bring memes to life on Bitcoin:
“This is 100% a meme-driven development.”