A New Era Of Digital Collectibles

After Ethereum NFTs stand out as the supreme in the realm of digital assets, Bitcoin NFTs or ordinals are coming up as the trending way to purchase NFTs on the blockchain network. Introduced in January 2023, Bitcoin NFTs have created the buzz in this short period of time. So, in this blog, we will discover all about Bitcoin Ordinals, what they are, how they work, and how launching an Ordinals marketplace can benefit your business.

What are Bitcoin Ordinals?

Bitcoin ordinals are the non-fungible tokens (NFTs) created and managed on the Bitcoin blockchain network by attaching metadata like art, music, images, and videos to individual satoshis (smallest units of Bitcoin). Unlike other NFTs, ordinal NFTs do not have a separate layer on the blockchain. Instead, they work on the logical ordering system called ordinal theory. In this, each satoshi is given a unique number, and hence, bitcoin ordinals do not check the Bitcoin protocols and function smoothly without the addition of any extra layers. 

How do they work? 

To have a comprehensive understanding of how Bitcoin Ordinals work, let us first go through the key terms: 

Ordinals 

Ordinals are the numbering scheme to number each individual satoshi. They are necessary in order to identify and track each satoshi and its associated data uniquely. A “satoshi,” often abbreviated as “sat,” equals the one hundred millionth of a single Bitcoin, thus representing the smallest unit of Bitcoin.

Inscriptions 

All the data, including images, text, art, or digital artifacts, which are put into satoshis are called inscriptions. This is done by encoding the data into the witness portion of the Bitcoin transaction, thus “inscribing” it onto the Bitcoin blockchain and marking a permanent history. 

These ordinals and inscriptions come together for the creation of NFTs on the Bitcoin blockchain, and each satoshi can be treated as a unique digital collectible, similar to NFTs on other blockchains like Ethereum.

Bitcoin Ordinals NFT Marketplace 

A Bitcoin ordinal NFT marketplace allows the creators (who create a piece of art) and collectors (who buy or trade that piece of art as NFTs) to surf, buy, and sell different inscriptions (NFTs) on the Bitcoin blockchain network. Ordinals marketplace offers its unique collection of non-fungible tokens and has specific wallet compatibility. 

As the spark of Bitcoin NFTs rises, it has gained the attention of artists, investors, and collectors to engage in the NFT marketplace. Moreover, the unique numbers given to the individual satoshi have brought a turn in the functioning of conventional NFT marketplaces and ensured that each asset in Bitcoin’s NFT marketplace would be irreplaceable, unique, and easy to track and transact. 

How does Bitcoin Ordinals NFT Marketplace work? 

Bitcoin Improvement Proposal (BIP) 174 introduced a Partially Signed Bitcoin Transaction (PSBT) solution to do transactions across Bitcoin ordinal marketplaces. This solution tends to smoothen and fasten the multi-party transactions, those transactions that require authentication from more than 1 signatory or party before they get put into the Bitcoin NFT marketplace. 

Below is the flow in which Bitcoin Ordinals NFT Marketplace functions: 

Initiate Transaction 

To initiate the transaction, a group member creates a PSBT file which includes majorly two sorts of information, inputs and outputs. Inputs refer to the UTXOs (Unspent Transaction Outputs) that are being spent. UTXOs are the pieces of Bitcoin that would be used in the transaction. Outputs mostly contain the receiver’s address and the amount they’d receive. However, at this stage, the transaction is incomplete as the necessary signatures to authorize and validate the transactions haven’t been done. 

Authentication Transaction

To authenticate the transaction, the user created PSBT file is sent to all the members of the group where they sign the transaction after reviewing its details. Signatures of each group member are necessary to validate and proceed with the transaction for the next step. 

Finalize Transaction 

Once all the signees validate the transaction, it finally moves forward to the next step, where the complete PSBT file is converted into fully signed transactions, which is in a format that can be processed by the Bitcoin network and it can read all the relevant details.  

Broadcast Transaction 

In the final step, the fully signed transaction is broadcasted into the blockchain network. It is sent to various nodes across the Bitcoin blockchain for inclusion, and it finally gets recorded on the Bitcoin blockchain. 

Benefits of launching Bitcoin Ordinals NFT Marketplace for businesses

Bitcoin Ordinals is a new player in the trending world of NFTs that has truly taken over the NFT trading talks unbelievably. This high time can greatly benefit businesses looking to launch their own Bitcoin Ordinals NFT marketplace. 

Here are some potential benefits of launching a Bitcoin Ordinals NFT Marketplace for businesses:

First-Mover Advantage 

Bitcoin Oridnals marketplace is relatively new as Ethereum NFT marketplaces are already set and growing. Therefore, adopting this new, trending, and top-notch opportunity for any business that wants to build its base in the field of NFT marketplace would definitely provide an edge over this industry. This first-mover advantage would allow businesses to establish their own brand and become a go-to-destination for creators, investors, collectors, and traders. 

Attracting Creators & Brands 

With the first-mover advantage, where the competition to attract the attention of target participants would be less, the opportunity to attract different creators and brands to create, buy, sell, and trade NFTs would be sky-high, and allow both the participants and the business to flourish and grow their digital assets. 

Transaction Fees &  Revenue Generation 

By facilitating the buying and selling of ordinal NFTs between creators and collectors, revenue is generated through transaction fees, listing fees, or other monetization models. As the ecosystem grows, revenue generation for the business will also increase. 

Integration & Partnerships 

By establishing a prominent presence in the Ordinals NFT space, businesses can explore potential integrations and partnerships with other companies, projects, or protocols within the broader crypto and blockchain ecosystem. This can lead to collaborative opportunities, cross-promotion, and the development of new products or services.

Growth Through Data & Insights 

By analyzing the generated data through the Bitcoin Ordinals NFT marketplace, businesses can have insights into the market trends, user behaviors, and popular ordinals categories and collections, which they can utilize to further grow their business by identifying new opportunities within the Ordinal marketplace. 

To launch an Ordinals NFT marketplace, careful planning, execution, and deep understanding of the market is necessary, for which you can collaborate with an expert blockchain development company which would help you establish a strong position in this emerging digital economy. 

Ready to Develop your Bitcoin Ordinals NFT marketplace? Contact BlockTech Brew today to get started and stay ahead in the digital asset revolution!