What are Bitcoin Ordinals?
Bitcoin ordinals are a new kind of digital asset, created by inscribing data onto Satoshis. Learn more about Bitcoin ordinals and how they work in our 2025 guide.
What are Bitcoin ordinals?
Bitcoin Ordinals are unique digital assets that are created by inscribing data, such as images, videos, or text, onto individual satoshis (the smallest units of Bitcoin). These inscribed satoshis function similarly to NFTs and can be bought, sold, and traded. By using the Bitcoin blockchain, Ordinals benefit from Bitcoin’s security and decentralization, making them a novel way to create digital collectibles.
Ordinals were first introduced in January 2023 by Casey Rodarmor, following upgrades to Bitcoin’s protocol like Segregated Witness (SegWit) and Taproot. These upgrades made it possible to store larger amounts of arbitrary data directly on the Bitcoin blockchain, allowing for the inscription of digital assets onto individual satoshis. This approach differs from traditional NFTs, which are usually minted on blockchains like Ethereum using smart contracts.
Read next: Bitcoin Mining Guide
How do Bitcoin Ordinals work?
Ordinals leverage Bitcoin’s underlying structure to assign unique numbers to each satoshi based on the order in which they were mined. This system is called Ordinal Theory and allows each satoshi to be individually tracked and inscribed with data. The process of turning a satoshi into an Ordinal involves attaching additional information—like an image or text—directly to the satoshi using a specialized protocol.
Technically, the process of creating Ordinals involves several steps, including the preparation of the data to be inscribed, the creation of a Taproot script, and the broadcasting of the relevant Bitcoin transactions. Once the transaction is confirmed by miners, the data is permanently inscribed onto the satoshi, making it a unique, traceable digital artifact.
How do you mint Bitcoin Ordinals?
Minting Bitcoin Ordinals is somewhat similar to minting traditional NFTs but with a few key differences. Here’s how to do it:
Choose a platform: You’ll need to use a Bitcoin-compatible platform that supports the creation of Ordinals. Some popular platforms include Magic Eden and Ordinals Wallet.
Inscribe your file: Upload the file you want to inscribe, whether it’s an image, video, or text, onto the platform’s interface.
Complete the transaction: The platform will create a Bitcoin transaction that includes your data. Once confirmed on the blockchain, your Ordinal will be minted.
How do you buy, sell, and trade Bitcoin ordinals?
Trading Ordinals is similar to trading NFTs. There are specialized marketplaces, such as Ordinals Wallet and OKX, where users can browse, buy, and sell Ordinals.
To trade Ordinals, you’ll need a Bitcoin wallet that supports the Ordinals protocol. Some popular wallets include Xverse, UniSat, and Ordinals Wallet. You must ensure your wallet has Bitcoin to pay for transactions and note that fees on the Bitcoin network can be higher than on other blockchains due to congestion and the PoW mechanism.
What’s the difference between Bitcoin Ordinals and NFTs?
Although Bitcoin Ordinals and traditional NFTs share some similarities—both represent unique digital assets—they differ in several key ways:
Blockchain: Ordinals are inscribed directly onto the Bitcoin blockchain, while most NFTs exist on blockchains like Ethereum or Solana.
Storage: Ordinal data is permanently stored on-chain, making it immutable. In contrast, most NFTs store the actual digital asset off-chain, with only a reference to the data stored on the blockchain.
Complexity: Creating Bitcoin Ordinals is more technically involved than minting Ethereum-based NFTs due to the lack of smart contracts on Bitcoin’s blockchain.
How do Ordinals compare to Ethereum NFTs?
While both Ordinals and Ethereum NFTs are designed to create unique digital assets, there are important differences in how they operate:
Security: Ordinals benefit from Bitcoin’s Proof-of-Work security model, making them highly resistant to tampering or censorship.
Flexibility: Ethereum NFTs are more versatile due to the use of smart contracts, allowing for features like royalties or integration with DeFi protocols. Ordinals, by contrast, lack these advanced functionalities.
Storage: Ordinals store data directly on-chain, while most Ethereum NFTs store data off-chain and merely link to the data via metadata on the blockchain.
Read next: Upcoming NFT Drops
Are Bitcoin Ordinals controversial?
The introduction of Ordinals has sparked debate within the Bitcoin community. Some argue that inscribing large data files onto the Bitcoin blockchain, which was originally designed for financial transactions, leads to network congestion and higher transaction fees. This could potentially hinder Bitcoin’s primary use case as a decentralized currency.
Critics also express concerns about blockchain bloat, where the increasing amount of inscribed data could make running a Bitcoin node more resource-intensive. On the other hand, supporters believe that Ordinals add new value to the Bitcoin ecosystem by attracting more users and developers, ultimately increasing demand for block space, which could help Bitcoin miners in the long run.
What are the pros and cons of Bitcoin Ordinals?
Pros:
Security: Bitcoin’s long-standing Proof-of-Work system provides a high level of security for Ordinals.
On-chain storage: Unlike most NFTs, which store data off-chain, Ordinals store their data directly on the Bitcoin blockchain, making them immutable.
Innovation: The introduction of Ordinals has brought new ideas and innovations to the Bitcoin ecosystem, including attracting users interested in digital collectibles.
Cons:
Scalability issues: Bitcoin’s network is not optimized for high-volume transactions, which could lead to congestion as Ordinals become more popular.
Costs: Inscribing large amounts of data can result in higher transaction fees, potentially making Ordinals inaccessible to casual users.
Environmental concerns: Like all Bitcoin transactions, Ordinals are energy-intensive due to Bitcoin’s Proof-of-Work mechanism.
What are some popular Bitcoin Ordinals collections?
Several Bitcoin Ordinals collections have gained prominence since the introduction of the Ordinals protocol. Here are some of the most notable examples:
1. Taproot Wizards
Created by web3 enthusiast Udi Wertheimer, Taproot Wizards is a collection of hand-drawn wizards inscribed onto satoshis. This collection stands out due to its artistic style and cultural references within the crypto community. Taproot Wizards gained attention for pushing the boundaries of what could be achieved with Bitcoin Ordinals and was one of the early collections to popularize the concept.
2. Ordinal Punks
Taking inspiration from the famous CryptoPunks on Ethereum, Ordinal Punks is a collection of 100 unique Bitcoin Ordinals. Each "punk" is a pixel art character, with its own distinct features, inscribed onto satoshis. This collection pays homage to one of the most iconic NFT projects while bringing the concept to Bitcoin. Ordinal Punks have become highly sought after by collectors, especially those who appreciate the cross-chain connection to Ethereum NFTs.
3. TwelveFold
Developed by Yuga Labs, the creators behind the Bored Ape Yacht Club (BAYC), TwelveFold is a limited edition collection of Bitcoin Ordinals. This collection features generative art created using artificial intelligence (AI). TwelveFold's association with Yuga Labs, a major player in the NFT space, helped solidify Bitcoin Ordinals' place within the broader digital art and NFT markets.
Are Bitcoin Ordinals here to stay?
Bitcoin Ordinals are an innovative way to create unique digital collectibles on the Bitcoin blockchain. While the concept has sparked excitement and controversy, it has opened up new possibilities for Bitcoin beyond its traditional role.
Whether Ordinals will gain long-term adoption remains uncertain, but their introduction has undeniably brought fresh ideas to Bitcoin’s ecosystem. As developers create more tools and services for Ordinals, the future of these digital artifacts looks promising — though not without challenges.
Read next: NFT taxes
Bitcoin Ordinals taxes
One final note - your Bitcoin Ordinals may come with a tax bill. NFTs are generally treated the same as coins and tokens from a tax perspective, and Ordinals are likely to be no exception to this rule.
This means when you’re selling or trading Oridnals, you’re making a disposal, and if you have a gain, you may have a tax bill. Koinly is working on adding automated support for Bitcoin Ordinals currently, and in the meantime, you can add your Bitcoin Ordinals manually by following our NFT help guide.
