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What are Bitcoin Ordinals? - Episode 369 - by cryptohunt.it
Manage episode 356642128 series 3330746
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What are Bitcoin Ordinals?
Welcome to the Cryptohunt Jam, where you learn – in just a minute or two a day – what is happening in crypto and other game-changing ideas. As always: In plain English.
It’s that time again. Here’s yet another new, complicated word for crypto enthusiasts to throw at you: Ordinals. Bitcoin Ordinals to be precise.
And if you don’t know what’s going on, we think you should: Because they’ve been pushing Bitcoin’s price back up quite a bit.
To understand ordinals, we’ll have to make a quick trip down the memory lane of this podcast and look at NFTs, non-fungible tokens. In a nutshell, they are the blockchain version of a digital collectible, like a baseball card, but in the cloud. And because each NFT unique, they are non-fungible, or not interchangeable.
Ok. Back to ordinals. They are a way to achieve the same with Bitcoin. The reason it has taken years longer than on other blockchains to achieve this, is that Bitcoin can’t do anything other than move Bitcoin money around. In the words of the crypto crowd: it only supports fungible tokens - meaning that each is exchangeable for the other. Think of dollar bill and another one - completely exchangeable. Same with two Bitcoins.
The trick here is that the digital collectible is saved in the transaction memo of a Bitcoins transaction itself. Originally, the intent was to put the purpose of the transaction there - like “this Bitcoin is for the pizza you paid for”. The interesting thing here is that ordinals can even save the entire collectible itself, for example a photo, which makes them more powerful than the king of NFTs, Ethereum.
But the usual downsides are still there: You can only have a limited amount of Bitcoin transactions to carry those ordinals, and when you spend the money your ordinal is tied to by accident, they are gone. And don’t get us started on the environmental impact on Bitcoin – it’s not great.
This podcast is produced by Cryptohunt.it, the easiest place to learn all about Web3.
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