The Ordinals Protocol in Bitcoin
The Ordinals protocol was introduced to Bitcoin in early 2023, at a crucial time, after nearly two years of low transaction fees due to low demand. Bitcoin is renowned as the most secure blockchain, but its security is contingent on miner revenue from transaction fees and block rewards. When block rewards are expected to be halved around April 2024, the revenue for miners would be substantially reduced. Ordinals was introduced to spur growth and has been successful in driving demand. In fact, over $100 million USD worth of transaction fees have been spent this year alone on inscriptions, one of the transactions attributed to Ordinals. Source
The protocol allows Bitcoin to secure and transact other fungible and non-fungible tokens (NFTs). While Bitcoin was previously surpassed by other blockchains for NFT markets, Ordinals has poised Bitcoin to reclaim its position in the NFT market.
Using Bitcoin as a Medium for NFTs
Bitcoin is unique as the medium for NFTs, especially through Ordinals. Being the oldest and most secure blockchain, NFT transfer and ownership established on Bitcoin are secure, unchangeable, and unrestricted. The ability for Bitcoin to be utilized as a medium for NFTs provides authenticity and permanence that is unrivaled.
Another critical component of the Ordinals protocol is the performance on the blockchain, highlighted by the unique use of satoshis, inscriptions, and the mapping of ownership.
Community and Adoption
Developing a strong community around Ordinals is vital for its adoption. As seen with OCM, a community that shares core values and utilizes the On-Chain medium to secure digital assets is crucial. Successful adoption of Ordinals within the Bitcoin community has played a significant role in the resurgence of Bitcoin’s developer community.
The impact of Ordinals on Bitcoin as a medium for digital assets has been substantial, with a trajectory to reach a market cap of $5 billion USD by 2025. OCM is one example of a community successfully migrating to Bitcoin and embracing the Ordinals protocol, despite initial doubts from the market. They have been clear in their mission to educate and leverage the new protocol to create meaningful digital artifacts.
