After Ethereum NFTs stand out as the pinnacle of digital assets, Bitcoin NFTs or ordinals are emerging as the trending way to buy NFTs in the market. blockchain network. Introduced in January 2023, Bitcoin NFTs have created quite a stir in this short period of time. So in this blog we will discover everything about Bitcoin Ordinals, what they are, how they work and how launching an Ordinals marketplace can benefit your business.
What are Bitcoin Ordinal Numbers?
Bitcoin ordinal numbers are the non-fungible tokens (NFTs) that are created and managed on the Bitcoin blockchain network by linking metadata such as 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 therefore Bitcoin ordinal numbers do not control Bitcoin protocols and function smoothly without the addition of extra layers.
How do they work?
To get a comprehensive understanding of how Bitcoin Ordinals work, let’s first review the key terms:
Ordinals
Ordinal numbers are the numbering scheme to number each individual satoshi. They are needed to uniquely identify and track each satoshi and its associated data. A ‘satoshi’, often abbreviated as ‘sat’, is equal to the hundred-millionth part of a single Bitcoin and therefore represents the smallest unit of Bitcoin.
Inscriptions
Any data, including images, text, art, or digital artifacts, placed in satoshis are called inscriptions. This is done by encrypting the data in the witness portion of the Bitcoin transaction, which ‘inscribes’ it on the Bitcoin blockchain and marks a permanent history.
These ordinal numbers and inscriptions come together to create NFTs on the Bitcoin blockchain, and each satoshi can be treated as a unique digital collectible, similar to NFTs on other blockchains such as Ethereum.
Bitcoin Ordinals NFT marketplace
A Bitcoin ordinal NFT marketplace allows the creators (who create a work of art) and collectors (who buy or trade that work of art as NFTs) to browse, buy and sell various inscriptions (NFTs) on the Bitcoin blockchain network. Ordinals Marketplace offers a unique collection of non-fungible tokens and has specific wallet compatibility.
As the spark of Bitcoin NFTs rises, it has attracted the attention of artists, investors, and collectors to participate in the NFT marketplace. Furthermore, the unique numbers given to the individual satoshi have revolutionized the functioning of conventional NFT marketplaces and ensured that every asset on Bitcoin’s NFT marketplace would be irreplaceable, unique, and easy to track and trade.
How does Bitcoin Ordinals NFT Marketplace work?
Bitcoin Improvement Proposal (BIP) 174 introduced a Partially Signed Bitcoin Transaction (PSBT) solution to transact on the ordinal Bitcoin marketplaces. This solution tends to smoothen and speed up multi-party transactions, those that require authentication from more than one signer or party before being posted to 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 that mainly contains two types of information: input and output. Inputs refer to the UTXOs (Unspent Transaction Outputs) that are issued. UTXOs are the pieces of Bitcoin that would be used in the transaction. Outputs usually include the recipient’s address and the amount he would receive. However, at this stage the transaction is not yet completed because the necessary signatures to authorize and validate the transactions have not yet been executed.
Authentication transaction
To verify the transaction, the user-created PSBT file is sent to all members of the group where they sign the transaction after reviewing its details. Signatures from each group member are required to validate the transaction and proceed to the next step.
Complete transaction
Once all signers have validated the transaction, it eventually moves on to the next step, which converts the entire PSBT file into fully signed transactions, in a format that can be processed by the Bitcoin network and read all relevant details. .
Broadcast transaction
In the final step, the fully signed transaction is broadcast to the blockchain network. It is sent to various nodes in the Bitcoin blockchain for recording and is finally 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 taken over the NFT trading conversation in an incredible way. This high time could bring great benefits to companies 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
The Bitcoin Oridnals marketplace is relatively new as the Ethereum NFT marketplaces already exist and are growing. Therefore, taking advantage of this new, trending and premium opportunity would certainly give any company looking to build its base in the NFT market an edge in this sector. This first-mover advantage would allow companies to establish their own brands and become a destination of choice for makers, investors, collectors and dealers.
Attracting makers and brands
With the first mover advantage, where the competition to capture the attention of the 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 both empowering participants and the business to thrive and grow their digital assets.
Transaction fees and 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, so will revenue generation for the company.
Integration and partnerships
By establishing a prominent presence in the Ordinals NFT space, companies can explore potential integrations and partnerships with other companies, projects or protocols within the broader crypto and blockchain ecosystem. This can lead to collaboration opportunities, cross-promotion and the development of new products or services.
Growth through data and insights
By analyzing the data generated through the Bitcoin Ordinals NFT marketplace, businesses can gain insights into market trends, user behavior, and popular categories and ordinal collections, which they can use to further grow their business through new opportunities within the Ordinal marketplace to identify.
To launch an Ordinals NFT marketplace, careful planning, execution and deep understanding of the market are necessary. For this, you can partner with an expert blockchain development company that would help you gain a strong position in this emerging digital economy.
Ready to develop your Bitcoin ordinal numbers NFT marketplace? Contact BlockTech brew today to get started and stay at the forefront of the digital asset revolution!
I am the CEO and founder of Blocktech Brew, a team of blockchain and Web 3.0 experts who help companies adopt, implement and integrate blockchain solutions to achieve business excellence. Our team has successfully delivered more than 1,000 projects to clients in more than 150 countries and is committed to designing and developing smart solutions to scale your business growth. We are focused on harnessing the power of Web 3.0 technologies to provide world-class Blockchain, NFT, Metaverse, Defi and Crypto development services to businesses to help them achieve their goals.