Exploring Ordinals (ORDI) as the Next Frontier in Cryptocurrency
In the spring of 2021, non-fungible tokens (NFTs) gained popularity on the Ethereum blockchain. Casey Rodarmor, a programmer who previously worked on Bitcoin Core, saw an opportunity to bring a similar experience to the Bitcoin network. In February 2023, the protocol was launched. The Bitcoin Ordinals technology allows market participants to encode data (text, images, audio, and video) and record them on individual satoshis (SATS), thus creating ordinals (analogous to NFTs). They inherited the simplicity, immutability, and security of the Bitcoin blockchain.
In March 2023, an anonymous developer and analyst named Domo decided to create a new token standard based on the protocol. It was named BRC-20 (Bitcoin Request for Comment) and was introduced as an alternative to ERC-20 on Ethereum. This allowed developers to create their own coins on the blockchain.
It was during this time that the Ordi cryptocurrency emerged. Domo stated that the token was useless and created as an experiment. However, the community disregarded this and the price of the digital asset reached $20 in a short period.
Unique Features of the Cryptocurrency
The emergence of Ordi set a new standard in the realm of digital assets and showcased an alternative use case for the Bitcoin blockchain. Some notable features of the cryptocurrency include:
Ordi, in simple terms, is the first token of the BRC-20 standard on the Bitcoin network.
Owning this cryptocurrency grants access to a secure and decentralized method of data exchange on the blockchain.
The coin itself doesn’t possess intrinsic value and was created as an experiment, with its price determined by market demand.
Key Features
- Limited supply of 21 million tokens, similar to Bitcoin.
- All digital assets are owned by the community.
- The coin is listed on popular cryptocurrency exchanges such as Binance, OKX, Bybit, KuCoin, and more.
Characteristics:
- Blockchain: Bitcoin
- Standard: BRC-20
- Total supply: 21 million
- Circulating supply: 21 million
- Market capitalization: $447 million
- All-time high (May 8, 2023): $29.16
- Historical low (September 11, 2023): $2.86
How It Works
The Bitcoin Ordinals protocol enables market participants to record data, timestamps, messages, and code fragments on satoshis (the smallest unit of Bitcoin) and create NFTs. This process is facilitated through a separate procedure called the Ordinals Theory. Each satoshi is assigned a unique number based on the date it was mined, and these numbers, known as ordinals, help the blockchain track the location and ownership of each satoshi.
Attaching additional data, such as images or text, to satoshis makes them unique and rare digital assets called non-fungible tokens (NFTs). They are minted similarly to traditional NFTs, but with a slight difference. Ordinals point to the data that is directly recorded on the Bitcoin blockchain, whereas on other platforms like Ethereum, Solana, or BNB Smart Chain, NFT information is typically stored off-chain.
Ordinals also led to the emergence of the BRC-20 token standard. The abbreviation stands for Bitcoin Request for Comment. It should be noted that Bitcoin does not have such a document. The name BRC-20 humorously refers to ERC-20 in Ethereum.
As of December 2023, over 55,000 tokens of this standard have been released. Ordi is currently the top-ranked cryptocurrency by market capitalization. The ecosystem comprises two important components:
Ordinals Market: This is a trading platform where investors can buy and sell ordinals.
Ordinals Wallet: This is a non-custodial wallet that enables the safe storage and transfer of tokens, as well as connectivity to the built-in trading platform.
Transaction Speed
The processing time for operations depends on the current load on the Bitcoin blockchain. The network has low scalability, averaging around 4-5 TPS (Transactions Per Second).
In May 2023, BRC-20 transactions accounted for about 60% of the total number of operations. The increased activity around new cryptocurrencies led to network congestion in Bitcoin, forcing the largest centralized exchange, Binance, to temporarily suspend BTC withdrawals. The transaction fee reached a two-year high, exceeding $30.
The congestion brought significant profits to miners but also resulted in slow transaction processing. This is because BRC-20 token minting and sending operations take up a lot of space in the blockchain and can have a size of up to 4 MB. A standard Bitcoin transaction typically consists of a few kilobytes.
Distinctive Features
The BRC-20 standard is inspired by ERC-20. Despite the similar names, the tokens have notable differences:
Consensus Mechanism: Bitcoin operates on a Proof-of-Work (PoW) basis, while Ethereum is based on Proof-of-Stake (PoS). In PoW, miners need to use ASICs to solve complex problems and validate transactions. In PoS, network participants can choose validators based on their contribution to the security of the blockchain.
Functionality: BRC-20 cryptocurrencies do not utilize smart contracts, making them less functional. Additionally, these coins resemble NFTs more than interchangeable tokens. ERC-20 assets can interact with lending protocols and other applications through smart contracts.
Cryptocurrency Tickers: Unlike Ethereum, where coin names can be duplicated, Bitcoin Ordinals does not allow the use of the same digital asset name. This helps prevent fraud.
Bitcoin ordinals also differ from regular NFTs (ERC-721) on Ethereum. Ordinals identify satoshis and store images or other content on the blockchain. Non-fungible ERC-721 tokens typically contain metadata that is off-chain.
Another difference is the way rarity is determined and the pricing mechanism. In traditional Ethereum NFTs, the uniqueness of the token and its value depend on the attributes of the artwork. In Bitcoin ordinals, the value is determined by the ordinal number of the satoshi.
Ordi Technology
Developer Domo created BRC-20 using the Bitcoin Ordinals protocol. The technology allows for embedding different types of arbitrary data into the smallest unit of bitcoin measurement, satoshis. Market participants can create inscriptions without smart contracts by simply inserting JSON data – pairs of property names and values enclosed in double quotation marks into SATs.
To create BRC-20, Domo also included code in the blockchain. It includes the following parameters:
- Protocol (“p”). This property is always set to BRC-20.
- Operation type (“op”). It can take values of “mint” (minting), “deploy” (deployment), or “transfer”.
- Cryptocurrency ticker (“tick”). The asset name must consist of 4 letters, for example, ORDI or PEPE.
- Maximum supply limit (“max”). This is the total number of coins.
- Minting limit (“lim”). Determines the number of assets minted in a single transaction. Developers can edit the value up to the maximum supply of the cryptocurrency.
- Number of decimal places (“dec”). By default, it is set to 18, but this parameter can be changed.
Once the JSON object is created, the developer can start issuing the first batch of digital assets. The sum should not exceed the “lim” value. Investors can mint coins until the maximum supply limit is reached.
To transfer tokens to another wallet, the user needs to call the “transfer” function and insert the storage address. The “amt” parameter should be included to specify the number of digital assets to be transferred. The value should not exceed the available balance in the wallet.
Anyone in the network can create and launch a cryptocurrency. However, developers do not earn anything when their assets are minted by other investors using this method. The only way to make a profit is to sell their coins when their value increases.
Coin Emission
The ORDI cryptocurrency has a fixed supply of 21 million tokens, just like Bitcoin. As of December 2023, all coins were in circulation. Users could freely mint the cryptocurrency until the maximum limit was reached. The project does not have a roadmap or tokenomics. The assets are fully owned by the community.
Backing
The cryptocurrency is not backed by real assets or Bitcoin. ORDI has no intrinsic value. The price of the coin depends on market demand. Additionally, being the first BRC-20 token on the Bitcoin blockchain also affects its price.
Usage
Crypto investors compare ORDI to meme coins like SHIBA INU and Dogecoin. Like them, the asset has no real value and is only used for speculative trading. Domo created the coin to explore the possibilities of Bitcoin and NFTs. Experts claim that in the future, BRC-20 tokens could pave the way for a decentralized financial system on the Bitcoin blockchain. This is because such digital assets can be easily integrated into DEX and lending protocols.
Acquisition Methods
All Ordi (ORDI) coins are in circulation. The cryptocurrency cannot be minted through UniSat. The only way to become an asset owner is to purchase it on a trading platform.
Buying on an Exchange
The coin quickly gained popularity among investors. In August 2023, the digital asset was listed on the Bybit exchange, in May on KuCoin and HTX (formerly Huobi), and in November on Binance. As of December 2023, the token is traded on more than 30 platforms. Here is an example of how to buy the asset on Bitget:
- Open the official website of the platform.
- Log in to your account.
- Hover the mouse cursor over the “Buy Cryptocurrency” section and go to the “P2P Trading” tab.
- Choose a counterparty and open a deal.
- Specify the amount.
- Transfer money to the seller’s bank card or electronic wallet.
- Click the “Paid. Send notification” button.
- Wait for the counterparty to confirm the transaction.
- Once the investor has funded the exchange account, they can proceed with purchasing the asset on the spot market. To do this, follow these steps:
- Hover the mouse cursor over the “Trading” section in the top horizontal menu.
- Open the “Spot” tab.
- In the trading terminal, find the Ordi coin.
- In the right window, select the order type and specify the quantity of tokens.
- Click the “Buy” button.
The digital asset will immediately appear in the exchange account balance. It can be stored on the trading platform or transferred to a non-custodial wallet.
Where to Store the Ordi Cryptocurrency?
The unique digital asset of a new standard is created on the Bitcoin blockchain. It is not supported by popular non-custodial wallets such as MetaMask or Trust Wallet. Investors use other services for minting and storing such coins. The most popular ones are:
Ordinals Wallet. This wallet allows participants in the crypto market to create ordinals and transfer them to other addresses. The service offers an intuitive interface and simplifies the storage of BRC-20 assets.
Xverse. The wallet has several additional features, including staking, built-in exchange, the ability to buy cryptocurrencies using Moonpay, Transak, and the ability to create NFTs.
Leather. In this non-custodial wallet, you can mint ordinals and manage them. The service utilizes security features such as biometric identification and Two-Factor Authentication.
UniSat. It is a trading platform that allows investors to mint ordinals, store coins in the built-in wallet, and engage in token transactions. The platform operates on top of the Lightning Network for fast operations with digital assets.
Even an inexperienced investor can create a wallet. To do this, follow the following steps (using Ordinals Wallet as an example):
- Open the official website of the service.
- Click on the Connect Wallet button and select Ordinals Wallet.
- Click on Create new wallet.
- Set a password to access the storage.
- Click on the Generate seed phrase field.
- Save the mnemonic phrase to restore the wallet.
After the sixth step, users can deposit BTCs into the storage or transfer NFTs to it. To do this, simply click on the Receive button, copy the address, or scan the QR code using a mobile application. In the second case, the wallet data will be automatically populated. After depositing Bitcoin into the account, investors can go to the Market section and select an asset to purchase. On the Inscrire page, users create their own ordinals.
The Future and Prospects of the Ordi Cryptocurrency
The project does not have a clear plan or strategy. The developer Domo claims that the token is intended solely for entertainment purposes and has no real utility. There are also no plans to integrate the coin into any products or services. This means that the potential increase in token price depends on speculation and trends and is not related to real demand for the cryptocurrency.
Is it Worth Buying Ordi in 2024?
Bitcoin, initially developed as a decentralized financial system, has undergone significant innovations. For example, the Ordinals protocol allowed for the creation of NFTs on the blockchain. Then ordinals gave rise to a new token standard. ORDI is the first BRC-20 cryptocurrency created by the developer Domo as an experiment.
Analysts believe that the Bitcoin halving will have a positive impact on the coin’s price. Historical data confirms that every time the mining reward in the Bitcoin network is reduced, the price of the cryptocurrency starts to rise. With a high probability, this will also affect the value of other coins, including Ordi.
Experts recommend considering the asset as an investment. However, it is not advisable to invest large sums. Typically, market participants allocate no more than 1% of their portfolio to such trades.