Ordinals Protocol: A New Chapter for Bitcoin Digital Artifacts
The Ordinals Protocol was officially launched on the Bitcoin mainnet on January 20, 2023, by former Bitcoin Core contributor Casey Rodarmor. The core mechanism of this protocol allows users to "inscribe" arbitrary data such as images, videos, and text onto the smallest unit of Bitcoin, the "satoshi," thereby creating unique "digital artifacts" on the Bitcoin blockchain, similar in function to non-fungible tokens (NFTs) on Ethereum.
Technical Foundation and Core Mechanism
The implementation of the Ordinals Protocol was made possible by the Taproot upgrade completed by Bitcoin in 2021. This upgrade significantly enhanced Bitcoin blocks' data storage capacity, making it possible to store complete data directly on-chain. Unlike many Ethereum NFTs that rely on external storage, all Ordinals data is stored directly and permanently on the Bitcoin blockchain, ensuring its decentralization and immutability.
Community and Cultural Development
The emergence of the Ordinals Protocol has injected new vitality into the Bitcoin ecosystem and quickly formed an active and controversial community.
Non-profit Organizations and Ecosystem Expansion
- Open Ordinals Institute: To support the continuous development and maintenance of the protocol, the Ordinals team established the non-profit organization "Open Ordinals Institute" on August 1, 2023. The organization's board of directors consists of Casey Rodarmor, Raph, Erin Redwing, and Ordinally (anonymous), and it launched Ordinals.org as a community update and resource platform, accepting tax-deductible donations.
- Runes Protocol: In April 2024, the Ordinals ecosystem further expanded with the Runes Protocol, aiming to enable fungible tokens on Bitcoin, bringing more options for token issuance and management to the Bitcoin network.
- Runestone Airdrop: In February 2024, the Runestone project airdropped Runestone Ordinals to approximately 110,000 Bitcoin addresses that held three or more non-text/JSON inscriptions at a specific block height (826,600). This was a volunteer-led project designed to reward early community members during the first year of the Ordinals Protocol's release.
Supporters and Advocates
The Ordinals Protocol has attracted widespread supporters who believe it brings new use cases and value to Bitcoin:
- New Users and Developers: Ordinals has introduced new artists, collectors, and developers to the Bitcoin ecosystem, broadening the application scenarios of Bitcoin.
- Miners: Ordinals activity has significantly increased Bitcoin network transaction fees, providing additional income for miners, which is particularly important in the context of the periodic Bitcoin block reward halving.
- Innovators: Some argue that Ordinals has brought "builder culture" back to Bitcoin, promoting Bitcoin's potential as a more programmable blockchain.
- Specific Project Communities: Many Ordinals-based projects, such as Bitcoin Frogs, NodeRocks, Ordinal Penguins, and Megapunks, have built large and loyal communities through free minting or community-driven initiatives. Organizations like The Ordinals Council are also dedicated to promoting decentralization and innovation through the Ordinals Protocol.
Criticism and Controversy
Despite the innovation brought by Ordinals, it has also sparked intense debate and criticism within the Bitcoin community:
- Bitcoin Purists: Some Bitcoin hardliners consider Ordinals to be "spam," deviating from Bitcoin's original purpose as a peer-to-peer electronic cash system. They worry that Ordinals could lead to network congestion, increased transaction fees, and even compromise Bitcoin's censorship resistance. For example, Bitcoin core developer Luke Dashjr has publicly stated that Ordinals clogs the mempool.
- Concerns about MEV: Critics also worry that Ordinals could increase "miner extractable value" (MEV), leading to ordinary user transactions being crowded out and increasing the risk of "sandwich attacks."
Neutral Viewpoints
Some neutral observers believe that Ordinals has sparked a "necessary and ancient" debate within the Bitcoin community about whether Bitcoin should be used for non-financial purposes, which helps the community to think more deeply about Bitcoin's future development direction and core values.
Data Overview and Market Performance
The activity of the Ordinals Protocol can be reflected through several data indicators:
- Number of Inscriptions: As of August 1, 2023, the total number of inscriptions has exceeded 21 million.
- Transaction Fees and Block Space: Ordinals activity has indeed led to increased Bitcoin network transaction fees and expanded block sizes to nearly 4MB. In the first half of 2023, inscription-related transactions contributed 20% (approximately 1,779 BTC) of miners' total fees.
- BRC-20 Tokens: The BRC-20 token standard is an experimental fungible token standard based on the Ordinals Protocol, and its ecosystem saw a large number of tokens minted when Ordinals day transaction volume peaked in May 2023.
Trading Channels for Ordinals-Related Assets
For users who wish to participate in the Ordinals ecosystem, relevant assets can be traded on cryptocurrency exchanges that support Bitcoin Ordinals and BRC-20 tokens. Currently, several mainstream trading platforms, including Binance, OKX, BTCC, BloFin, OrangeX, Hotcoin, LBank, CoinW, HTX, Hibt, KuCoin, XT.COM, BitKan, Phemex, and Toobit, support the trading of Ordinals-related assets. Users should verify whether a platform supports specific assets and be aware of market risks before trading.
