A protocol that brings non-fungible tokens to the Bitcoin network. Unlike Rootstock and Stacks, which are independent networks that add smart contracts to Bitcoin, Ordinals assigns a non-fungible number to a satoshi residing in the UTXO set, which is the database that holds all users' BTC coin balances (see
UTXO and
satoshi).
The sequential number assigned to the satoshi is known as an "inscription," which enables it to be inscribed with data via a Bitcoin transaction. The data can be viewed with an Ordinal viewer or Ordinal-enabled Bitcoin wallet. Launched in January 2023, more than 45 million Bitcoin inscriptions were created by the end of the year. See
NFT and
Bitcoin STAMPS.
Bitcoin NFTs Are On the Blockchain
Unlike Ethereum NFTs, which are links in the smart contracts to the NFT files residing in a storage system external to the blockchain, Bitcoin Ordinals keeps the actual NFT files on the blockchain in the witness signature field of the Bitcoin transaction.
Fungible Tokens Too
Using the Ordinals protocol, the BRC-20 specification added fungible tokens to Bitcoin. BRC-20 is an entirely different approach than ERC-20, which enabled thousands of crypto tokens to be published on Ethereum. See
BRC-20 and
ERC-20.