Thread by @drypto_network

1/ Rise of Bitcoin's #Ordinals: Impact on the Network and Future Possibilities

📈 A new daily all-time high (ATH) has been recorded for the number of Ordinals inscribed on the $BTC network which is 3 Million within 3-4 months

Let's dive in below 🧵👇🏻

#Inscriptions #Bitcoin

2/ We will cover below topics:

TL;DR

🤔 What are Ordinals?
🪙 What’s the token standard for $BTC?
🐂 Bitcoin #NFTs Vs Others
🗣️ Why is it being debated by maximalists?
👀 The future of PoW

3/ Firstly, the Ordinals protocol is a way to keep track of individual satoshis (the smallest unit of Bitcoin) by giving each one a unique serial number & extra data.

This helps users differentiate between each satoshi and track them as they are used in different transactions.

4/ They are utilized as non-fungible tokens (NFT) like “digital assets” which carry data in the form of text, JPEG images, PDFs, video and audio formats on the Bitcoin network.

The token standard for Bitcoin is ‘BRC-20’. It uses Ordinals to deploy token contracts, mint tokens..

5/ - and transfer tokens — similar to Ethereum’s ERC-20 token standard.

Bitcoin #NFTs ⚔️ Other NFTs

– Data storage is the main difference. Most NFTs are created using #ETH through the ERC-721, which means, it acts like a contract with metadata.

6/ The actual file or artwork can be altered since it is not embedded in the blockchain.

While in Bitcoin #NFTs, the entire data file is stored in the witness signature field of Bitcoin transactions.

In other words, #Ordinal NFTs live and breathe on the blockchain.

7/ This adds to the immutability of #NFTs

Although the reports seem to be bullish for Bitcoin, there has been some debate about its use cases.

There are two groups of people with their own opinions about BTC. One group believes that Bitcoin should stay simple transferring value

8/ The other group believes that Bitcoin should adapt to new features.

The inscribed satoshis (Ordinals) have caused some controversy in the community.

Reason? These stored data are now competing with regular Bitcoin transactions for space in the blocks, leading to high fees.

9/ As a matter of fact, it is quite positive as fees are a crucial incentive for miners to secure the blockchain

✨ We are witnessing a unique moment in Bitcoin's history where innovation is leading to high network activity beyond traditional use cases such as monetary transfer.

10/ Though the fundamental mechanism of $BTC is of Proof-Of-Work, the implementation of inscriptions has plummeted network activity and has incentivized the miners.

Still, it's difficult to predict whether Ordinals will continue to grow or not. It will depend on various factors

11/ - such as user adoption, network fees, and competition from other protocols.

Only time will tell how successful #Ordinals will be in the long run.

Source:
📌 dune.com/dgtl_assets/bi…
📌 decrypt.co/138668/bitcoin…