Bitcoin ordinals (BOs) are a new technological breakthrough presented by the industry-leading Bitcoin ecosystem. BOs were designed to address the inherent constraints of the Bitcoin currency, which is its utterly speculative nature. This means Bitcoin has no intrinsic value and is susceptible to significant market fluctuations. With BOs, the Bitcoin ecosystem has the chance to establish a worthwhile inherent value that is similar to the NFT utilities.
What is The Inscription Process of BOs?
Simply put, BOs equip Satoshi Units (SATs) with various types of data contents, not unlike the NFT minting process. SATs represent the lowest denomination of Bitcoins, used by the traders that frequently transact with this currency. The inscription process creates a feature for uploading data into the SAT data blocks, allowing users to store text, images or even their chosen GIFs.
However, it is essential to note that the inscription process has a size limitation of 4 megabytes. While this number will most likely increase in the future, the current state of BO inscriptions is quite constraining. Thus, most inscriptions conducted thus far have been in the text format.
BOs Vs. NFTs
The above-described nature of BOs closely resembles the underlying principle of NFTs, but there are several considerable changes in the concept. The most notable difference is the storing process. NFTs must be minted to store content, which is an off-chain procedure. In simple terms, NFTs must be minted outside the primary blockchain ecosystem, presenting security concerns.
With BOs, the storing process is conducted through inscription, never leaving the Maine’s confines. Thus, BOs are always protected by the security protocols of the blockchain.
However, BOs are extremely constraining regarding the data size, with a maximum capacity of only 4 megabytes per block. NFTs don’t share this constraint; they can store data without hard caps on the file size.
Differences In Liquidity
Abundant Liquidity is another advantage of BOs. Backed by the world’s largest and most trusted cryptocurrency, BOs will likely remain one of the most liquid crypto options on the market. While Bitcoin has experienced troubling times in recent years, it is still the most reliable and robust blockchain ecosystem. Conversely, NFTs don’t have this luxury, as they are not directly related to any major cryptocurrency. While most NFTs are minted on the Ethereum blockchain, they are separate entities and can suffer from liquidity issues depending on market conditions.
Finally, BOs present some worrying moral and legal concerns due to their unregulated nature. Currently, Bitcoin permits users to store any type of data on Sats without any rigid limitations. Naturally, the unmitigated freedom invites the possibility of scamming, cybercrime and other illegal activities. Therefore, the general crypto public is concerned about the ethical implications of utilising BOs.
While BOs have tremendous potential in several domains, their size limitation and ethical concerns are two major roadblocks. Both problems remain firmly at the centre of attention, as the creators behind this technology don’t have any immediate solutions to remedy these issues.
BOs are a breath of fresh air in the crypto landscape. They have sturdy potential to present an improved variation on the NFT technology, revolutionising the Web3 and Metaverse markets. However, the minimal file size and significant ethical issues keep this technology from achieving its full potential.