In the simplest terms, Ordinals, or Ordinal Theory, is a way to create Non-Fungible Bitcoin. 

The difference between an NFT and a standard fungible token, like BTC or ETH, is that it’s uniquely identifiable. 1 ETH is equivalent and indistinguishable from any other 1 ETH, however, 1 Mutant Hound is NOT equivalent to another Mutant Hound and can be quite clearly identified as different. 

For Ethereum NFTs, that uniqueness is easily accomplished due to the “programmability” of Ethereum. Smart Contracts enable the creation of new tokens on the Ethereum blockchain. The Mutant Hound smart contract, for example, can produce 10,000 tokens, each with a unique ID which enables us to then append unique data to each token, also known as metadata.

Bitcoin on the other hand is not “programmable” like Ethereum. You aren’t able to create a Bitcoin smart contract that creates new unique tokens, there’s only BTC on the Bitcoin Blockchain. So how do you differentiate one Bitcoin from another to create NFTs? That’s where Ordinals come in. 

Bitcoin’s smallest possible denomination is known as a “Satoshi” or “sat”, named after the Bitcoin founder Satoshi Nakamoto. 1 sat is 0.00000001 BTC. Ordinals Theory enables us to retroactively assign an ID to every sat produced based on the order they were/are mined. The first sat ever mined receives ID #1, the second ID #2, and so on. We now have a way to tell sat #1 apart from sat #2, thus enabling us to turn them from fungible to non-fungible.

Additionally, the sats themselves now have potential rarity based on when they were mined, the IDs they were given, and more. For more information on potential sat rarities check out the rarity section of the Ordinals handbook.

How does this create Bitcoin NFTs?

Using this unique ID we can “Inscribe” data onto a sat - essentially by creating a transaction on the Bitcoin blockchain that states “Sat #1 has this image attached to it.” Of course, the process is more complicated than that, if you’d like to go deeper check out the Inscriptions section of the Ordinals handbook.

However, there are differences between Ordinals and Ethereum NFTs. A primary of which is that Bitcoin has much smaller data limits. Ethereum NFTs typically contain links to off-chain image storage services like IPFS whereas with Ordinals those images are stored fully on-chain.

Because they are on-chain, the images used for Ordinals must be dramatically smaller in file size than those possible on Ethereum. This is due to data maximums per block and cost. Larger images require more space on a block, and the more of a block you use, the more it costs. This is why most Ordinal NFTs are pixel art or other small format images. 

How do I buy/interact with Ordinals? 

You’ll need a Bitcoin wallet, preferably one with built-in Ordinal tooling. Because these sats are still BTC and not a new token, they can accidentally be used in transactions. To avoid sending, or burning, your Ordinal, you must be extremely careful transacting with a wallet that owns an Ordinal NFT. 

Thankfully there are a few wallets with these protections built in. One of the most popular is Xverse, but there are a variety of options. Check out this how-to for help setting up an Xverse wallet.

The next step is to load your wallet up with some BTC. This can be done in a variety of ways. You could purchase BTC through a FIAT onramp such as Kraken or Coinbase and transfer it into your wallet. You could also convert your ETH to BTC using a service like RocketX

After these two steps, you’re ready to go! Either get access to an Ordinal mint, such as Mutant Hounds: Inscriptions, or purchase one on a secondary marketplace such as Magic Eden. Keep in mind transaction times on Bitcoin are much longer than Ethereum so it will take longer than you are used to for transactions to complete. 

As always, it’s recommended that you do your own research on any service before using it. 

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