NFTs, or non-fungible tokens, are unique digital assets that are stored on a blockchain. Unlike cryptocurrencies, which are interchangeable with one another, NFTs are one-of-a-kind and cannot be replicated. NFTs can be used to represent a wide range of digital assets, including art, music, and video game items.
NFTs are becoming more popular due to the increasing demand for digital ownership and scarcity. With NFTs, creators can monetize their digital creations and buyers can own a unique piece of digital content with verified authenticity. Additionally, the rise of blockchain technology and its potential for secure and transparent transactions has contributed to the popularity of NFTs.
NFT volume is mainly focused on the Ethereum blockchain because it was the first major blockchain to support the creation and trading of NFTs. Additionally, Ethereum's smart contract functionality allows for more complex and customizable NFTs, such as those with royalties or unlockable content. However, there are efforts to bring NFTs to other blockchains, including Bitcoin.
On the Bitcoin blockchain, NFTs are created by inscribing unique data onto individual satoshis using a technology called "Ordinals." This enables users to transfer and receive individual satoshis with unique data, such as videos or images, and the inscriptions are stored in a bitcoin transaction's signature. The process of adding assets to individual satoshis is called “inscription”, or "minting" in NFT terminology.
The majority of Ethereum NFTs images are stored on IPFS - they are not on-chain and NFT metadata could be changed by the creators. So, that’s why Bitcoin NFTs are popular: “Inscriptions” is a true way of storing data on-chain and enables true decentralized ownership. The on-chain storage on Ethereum is quite expensive, while making a BTC Inscription only costs ~5$ in gas fees.
Bitcoins NFT started gaining attention in the beginning of February 2023.
The first Inscription was created Dec 14, 2022:
The next 200.000 Inscriptions were created in just 1 month. As you can see on the graphic, on Jan 26 100 Inscriptions were reached, but on the Feb 27 200.000 inscriptions milestone were reached:
The next 200.000 Inscriptions were created in just 1 month. As you can see on the graphic, on Jan 26 100 Inscriptions were reached, but on the Feb 27 200.000 inscriptions milestone were reached:
This statistic gives us the understanding that Bitcoin NFTs are still getting attention, as at the moment there are more than 270.000 Inscriptions created.
But why does the number of Inscriptions even matter?
Because the Inscriptions are limited, because there are only 2.1 quadrillion (2.1 x 10^15) satoshis. Of course, it’s impossible to reach this number of Inscriptions and this number is very conditional.
However, there is a trigger that makes people “hunt” for the low inscriptions: people value low inscriptions because it indicates that the NFT is rarer, because it was made earlier than the mainstream. It is similar to the valuation of early avant-garde painting - it will always be valued more than modern avant-garde painting.
Basically, the valuation on the market is now based on the unique number of the Inscription: lower - better. So this is why collections which were deployed under 100.000 inscriptions are so valuable.
It’s important to understand that smart-contracts don’t exist on the Bitcoin Blockchain, so technically it is not possible to make an automated and safe marketplace of Inscriptions.
In order to buy, sell and send, you will need to set up a BTC wallet, you will need to set up a custom BTC node. IMPORTANT: without special research you will end up losing money on BTC NFT.
Here is the video guide on trading the Bitcoin NFTs: How To Trade Bitcoin NFTs to MAKE MONEY (Complete Guide) How To Trade Bitcoin NFTs to MAKE MONEY (Complete Guide)
However, nowadays, there is a user-friendly BTC NFT wallet - OrdinalsWallet. The wallet is trusted, but the Bitcoin blockchain is slow and in addition to the safety, all factors make trading on the Bitcoin Blockchain very hard. That’s why, the main volume of BTC NFTs is based on Ethereum: people trade wrapped versions of Bitcoin NFTs, but there is always an opportunity to bridge the NFT from Ethereum to Bitcoin.
Ordinals Market is a marketplace that is focused only on the trading process of Bitcoin NFTs on the Ethereum Blockchain. This marketplace helps verify the assets from Emblem Vaults - the technology of NFT containers that can contain one or more tokens, or NFT's. In those containers, the Bitcoins NFTs are stored on Ethereum, however some collections have their own bridge.
Although, if you want to stay on the Bitcoin Blockchain - there is a tool called OpenorDex, which allows you to place bids, make listings or buy listings of the original BTC Inscriptions:
As additional information, I am attaching additional links and guides:
The main problem of Bitcoin NFTs - you can’t technically divide several NFTs in one collection. The collection is created by announcing the valid numbers of Inscriptions by the author of the collection.
100 pixel PFP in a style of CryptoPunks, but on the Bitcoin blockchain. All the Ordinal Punks are unique and what is more valuable - they all were made in the first 1000 Inscriptions.
Initially, they traded OTS through Discord and Google Sheets. Escrows were involved in the transaction.
Nowadays, the lowest listing on the Ordinals Market is 99 ETH (6.94 BTC):
However, through the official OTC board, the lowest listing is 65.16 ETH (4.55 BTC) and the highest bid is 64.44 ETH (4.5 BTC):
10000 pixel PFP in a style of CryptoPunks, but on the Bitcoin blockchain.
Actually, it seems that this is just a derivative of Ordinal Punks, which was made after the peak of their hype, as a lot of people wanted to get into BTC NFTs, but there weren't many collections.
They are being traded through the Ethereum Vault protocol and the Inscriptions were deployed under 50.000
The collection is valuable because this is the first 10.000 collection on the Bitcoin Blockchain.
The problem of the collection is that it's being hardly manipulated because the collection is distributed among a small number of holders.
The collection is traded on the Ordinals Market:
1000 pixel PFP - unique style.
This collection was minted on Ethereum blockchain with the price of 0.01 ETH, the authors of the collection made the Inscription claim on the Bitcoin Blockchain.
The collection is mainly traded on the OpenSea:
The holder ratio is normal, the style is unique, and NFTs are inscripted between 45k-55k inscriptions.
Low-supply, low Inscriptions, 11k followers on Twitter.
TweetScout Score is 730 - this is a good score.
Twitter users are showing a high level of engagement and interest in the project, with a significant amount of activity on the platform centered around discussions, mentions, and hashtags related to the project.
This is the ART project made by Yuga Labs.
Yuga Labs - are the owners of several collections: BAYC, CryptoPunks, MAYC, BAKC, OtherSide, Meebits, SewerPass.
The studio has the biggest influence in the NFT space and this action is very bullish for the Bitcoin NFT sector as it definitely brings more attention and liquidity.
The collection will be from 300 NFTs, no utility has been announced, purely an art project. Before March 4, they will have to start an auction through which all NFTs will be sold.
You will need a wallet containing BTC and another with an empty balance to get the rest if you don't win the auction.
In conclusion, while there are challenges and limitations to trading Bitcoin NFTs on the Bitcoin blockchain, the emergence of user-friendly wallets and marketplaces on the Ethereum blockchain provides a viable alternative for trading and investing in Bitcoin NFTs.
It is obvious that Bitcoin NFTs won’t be used for the PFP collectibles. Ordinals will be used to capture the Art: generative or non-generative, but using Ordinals any digital art could be stored on the Bitcoin Chain forever.
Yuga Labs is a strong trend-setter and it’s not professional to fade the market they are making the bet on by launching the collection on the blockchain. However, for now there is not enough liquidity and the market seems overvalued and overhyped.
As the market for Bitcoin NFTs continues to grow and evolve, it will be interesting to see how these different tools and platforms further develop and impact the overall landscape of the NFT market.
Ordinals can contribute to the development of art on the blockchain. But for now - we are too early to make predictions and bets.
