summary
To understand NFTs in Bitcoin, we need to shift our perspective from more familiar blockchains such as Ethereum, Avalanche, Polygon, Cardano, and Solana. Let’s take a look at how Ordinal, a new type of NFT, is created and utilized in the Bitcoin ecosystem.
Let’s look at the details of BRC-20, a framework for managing these digital artifacts, and how it differs from other blockchain systems. The intent is to provide practical information to creators, marketplaces, and collectors interested in participating in Bitcoin NFTs.
We will also discuss important considerations for protection and inheritance to ensure the longevity of these assets. This guide aims to provide a comprehensive understanding of NFTs in Bitcoin and highlight their unique characteristics and potential uses.
How can I put an NFT into Bitcoin?
Applying NFTs to Bitcoin requires several steps and requires a basic understanding of blockchain and cryptocurrency concepts. A brief explanation is as follows:
- Digital asset creation: It can be any digital item, such as images, music, digital art, etc. It is important to remember that any digital assets you create must be original and owned by you.
- NFT issuance: ‘Minting’ is the process of converting digital assets into NFTs. This can be done using various platforms that support the Bitcoin blockchain. They create a unique digital signature for the asset, known as a hash, which will be stored on the Bitcoin blockchain. This step usually involves a small fee paid in Bitcoin.
- BRC-20 implementation: BRC-20 is a standard for creating and managing NFTs in Bitcoin. Similar to how ERC-20 and ERC-721 work on the Ethereum blockchain, BRC-20 provides a set of rules that allow NFTs to interact with other tokens and platforms on the Bitcoin blockchain.
- Store or sell NFTs: Once an NFT is issued, you can store it in a digital wallet or sell it on marketplaces that support Bitcoin NFTs.
- transfer of ownership: When an NFT is sold, ownership of the NFT is transferred to the buyer. This transaction is recorded on the Bitcoin blockchain, ensuring the authenticity and ownership of the NFT.
Please keep in mind that this is a simplified explanation and the actual process may be a bit more complex depending on the platform you use and the specific requirements of your digital assets. If you are unsure about anything, always do your own research or consult a professional.
What is BRC-20?
BRC-20 is an experimental token standard that uses ordinal inscriptions to enable the issuance and transfer of fungible tokens on the Bitcoin blockchain. This is similar to the ERC-20 token standard on the Ethereum and EVM blockchain networks. BRC-20 was an attempt to add fungible use cases to the Bitcoin base layer shortly after the Ordinals protocol made Bitcoin NFTs an overnight sensation.
What does a Bitcoin NFT consist of?
Bitcoin NFTs are made up of individual satoshis, the basic native currency of the Bitcoin network.
Ordinal Theory allows individuals to track and transfer individual Satoshi, which turns Bitcoin into one big NFT collection made up of 2.1 trillion NFTs called Satoshis. An inscription, or a unique piece of data attached to a specific satoshi, made Bitcoin NFTs possible..
What is an ordinal number?
Ordinals, a recent development in the Bitcoin ecosystem, are rapidly gaining popularity. By April 2023, the daily record for ordinal inscriptions had quadrupled as users flooded the network with a variety of content, including images and video games.
Similar to NFTs, Ordinal Inscriptions are digital assets embedded in satoshis, the smallest unit of Bitcoin (BTC). This epitaph to Satoshi, named after Satoshi Nakamoto, the pseudonymous creator of Bitcoin, became feasible through the Taproot upgrade implemented on the Bitcoin network on November 14, 2021.
What is a Bitcoin Artifact or Artifact?
Bitcoin Artifacts are digital artifacts created on the Bitcoin blockchain. They are also known as Bitcoin NFT. These digital artifacts range from images to audio clips and are securely recorded on the blockchain, linked to the smallest unit, the Satoshi. They are created through a process called inscription, which allows you to inscribe content (such as an image or video file) into an ordinal number.
Examples of Bitcoin artifacts include screenshots of tweets, early series of inscriptions, advertisements, and even 8-bit video games.
What is the difference between Ethereum and Bitcoin NFTs?
Conceptualized by developer Casey Rodarmor, Bitcoin Ordinal differs from traditional Ethereum-based NFTs in several key ways. Although both are forms of digital art. Rodarmor characterized Bitcoin NFTs as “true digital artifacts” because they are fully on-chain and inherit the powerful properties of the Bitcoin network.
- immutability: Unlike Ethereum-based NFTs, which can potentially be altered or deleted by the contract owner, Bitcoin inscriptions are inherently immutable. To achieve immutability, existing NFTs require auditing, a process that requires an in-depth understanding of the Ethereum Virtual Machine (EVM) and Solidity.
- On-chain content: Bitcoin inscriptions continuously contain on-chain content, making them highly durable and loss-resistant. The creation of an inscription carries a cost proportional to the size of the content, contributing to its scarcity. In contrast, Ethereum NFTs may have off-chain content stored on platforms such as IPFS, which may be lost.
- security: Bitcoin Inscription provides enhanced security based on the outstanding security properties of the Bitcoin blockchain. You can sell using PSBT (Partially Signed Bitcoin Transactions) without going through a third-party intermediary like an exchange or marketplace. Ethereum NFTs often require these intermediaries to allow users unrestricted access to their NFTs. Moreover, the use of complex smart contracts can pose challenges to individuals who are unfamiliar with the technical aspects of digital art transactions.
- Inscription vs Coinage: Unlike Ethereum NFTs, which are issued as completely new tokens, Ordinals involve etching raw file data directly into satoshis on the Bitcoin blockchain. This unique process further separates Bitcoin Ordinals from traditional NFTs.
How do I back up and protect my Bitcoin NFTs?
Only Taproot compatible wallets such as the Ordinals wallet, Xverse, and Hiro wallet can be used to purchase and hold Bitcoin Ordinals. Additionally, the OKX multichain wallet recently announced support for Ordinals and BRC-20. The Ordinals wallet is very simple to use and other wallets are similar.
- Create an account, obtain a backup of your seed phrase, and fund your wallet.
- Be careful with your Bitcoin public address type and use a Taproot-supported address (usually starting with: bc1p prefix).
- Use that address to get your Bitcoin NFT from the marketplace or trading platform of your choice for purchasing Bitcoin NFTs.
How do I ensure Bitcoin NFT inheritance?
Ordinals make Bitcoin a much more visible part of the Web3 world, so you’ll need to be careful with your Bitcoin NFT inheritance in the same way you would any other Web3 digital asset. Web3 Inheriting assets differs from the relatively straightforward traditional steps of inheritance, where you go to a bank or broker and tell them that someone has passed away or are incapacitated, and then you can access those assets. As the owner of such assets, you are responsible for the security and custody of such assets. If you do not record all the details of your assets and pass them on to your intended beneficiaries, you are likely to lose those assets. Even if the details are filled out accurately, heirs often encounter complex technical issues during the succession process.
How can Vault12 Guard protect Bitcoin NFTs?
Our latest technology release, Vault12 Guard, is a mobile app designed for everyday people: collectors, creators who create digital art and NFTs, and cryptocurrency enthusiasts who purchase cryptocurrencies. Vault12 Guard is designed to make backing up all Web3 assets as simple as possible and then designating a beneficiary to receive those assets if the owner is incapacitated or dies.
Vault12 Guard makes it very simple to back up your items for recovery. Enabling inheritance is very simple. And it’s very simple for your heirs to retrieve those assets when they need them. Just download the app from the App Store (iOS or Android), install it, create your digital vault, and start adding assets right away. Assets are stored locally on your phone device for global, distributed, distributed backup and inheritance. .
Vault12 Guard allows you to add and assign your own Vault Heirs and Guardians. These are people you know. They may be business partners, family members or friends who will guard your safe. Your guardian will grant you access to your Web3 assets in the event of your death.
You can learn more about NFT crypto inheritance here, or instantly learn how to quickly set up a vault and bring longevity and resilience to your digital asset journey.
What is the controversy about Bitcoin NFTs?
The emergence of the Ordinals protocol has sparked important discussions among the NFT community, sparking essential inquiries. Should Bitcoin’s role be limited to monetary functions, or should its scope expand to encompass additional applications? Is the Ordinals Protocol Compromising the Bitcoin Network?
The Bitcoin blockchain has traditionally only facilitated payment transactions due to its limited block size and network structure. This architecture encourages the development of solutions on top of the blockchain and adds layers to improve the programmability and scalability of the network.
1. Various use cases of Bitcoin
The recent surge in Ordinals has sparked interest and scrutiny from the Bitcoin community. There are concerns that Ordinals may diverge from Bitcoin’s fundamental purpose as a medium of exchange and whether or not block space is used efficiently. Ordinal numbers, which can take the form of images, audio clips, or games, require space that compromises financial data, potentially significantly slowing on-chain confirmation times.
Some passionate members of the Bitcoin community are upset about this development and are strongly opposed to NFTs being hosted on the Bitcoin blockchain. The Bitcoin community is generally very conservative and tends to favor stability and network reliability. They perform code updates relatively infrequently and tend to ignore calls to make the network as fast or feature-rich as some competing cryptocurrencies. Is there anything else you’d like to know?
2. Challenge to Bitcoin’s fungibility
Ordinal numbers also pose a challenge to Bitcoin’s fungibility, a key characteristic of money. The ordinal inscription is embedded in a single satoshi, giving it a degree of rarity, much like numismatic coins are unique physical items collected for their rarity.
Ordinal Satoshi assumes a unique identity that can monitor, transmit, and inject valuable information such as text or images. This process makes Satoshi unique, effectively turning it into a non-fungible token (NFT). Conversely, the traditional view holds that all satoshis should be treated equally to preserve the essential properties of money.