A deep dive into Ordinals: How to bet on the Bitcoin ecosystem as the halving approaches?

Author: @JellyZhouishere, Source: Gryphsis Academy

TL;DR

• Ordinal is one of the most popular protocols in the Bitcoin ecosystem, of which BTC NFTs and BRC20 are main application.

• Ordinals speculation has faded, but protocols and project innovations are emerging one after another, and the ecology continues to develop healthily;

• BTC has formed its own unique, The culture that is different from Ethereum: the pursuit of full on-chain, fairness, and decentralization, BTC NFT and BRC-20 are important manifestations of BTC’s difference;

• BTC NFT and BRC-20 grew up in controversy: behind the prejudice is the opportunity to participate, Controversy may be a positive signal that the Ordinals ecosystem will continue to develop;

• $ORDI It is the first token based on BRC-20, with a Punk-like narrative, and is also the most out-of-the-circle and most consensus-based BRC-20 token; $ORDI’s unique attributes have attracted a large number of investors and community participants, and appear frequently on social media and spread widely;

• $ORDI is characterized by its cultural identity, strong community, social communication and capital drive , there is still room for growth compared to other MEME coins, especially given the narrative surrounding the Bitcoin halving cycle and the long-term development of the BRC20 and Ordinals ecosystem.

1. Ordinals protocol: an important milestone in the BTC ecosystem

While the Bitcoin network and asset have experienced countless narratives, innovations, and events throughout its tumultuous 14-year history, the emergence of BTC NFTs and the speed at which they have developed remain somewhat Unexpected. The following are some milestones of BTC NFT in just a few months:

(1) Ordinals Agreement Release

Since the end of December 2022, Casey Rodarmor released the Ordinals protocol, introducing NFTs to the Bitcoin network through Ordinals and Inscriptions (ordinals and inscriptions). The protocol can add arbitrary content, such as text, images, videos, and even applications, to sequentially numbered sats (the smallest units in Bitcoin) to create unique digital artefacts that can be transmitted over the Bitcoin network.

(2) Bitcoin Punks launched

Bitcoin Punks is an NFT project that imitates CryptoPunks on Ethereum, with a total of 10,000 different 8 Pixel-style character avatars, each with unique attributes and rarity. Bitcoin Punks completed minting on the Ordinals protocol on February 9, 2023, and are traded on platforms such as Opensea.

(3) Bitcoin mined the largest block in history of nearly 4M

On February 1, 2023, Bitcoin mined nearly The largest block in history of 4M contains the largest transaction in history of nearly 4M. This huge transaction was issued by Taproot Wizard, a little-known NFT project on the Bitcoin chain. The main data is an NFT, not a hash. It caused a lot of controversy for a while.

(4) BRC-20 protocol creates and releases the first token $ORDI

Twitter user @domodata on March 2023 BRC20 was created on September 8th, which is an experimental interchangeable token standard. It utilizes Ordinal JSON data to mint and transfer tokens. The first BRC-20 token contract deploys the “ORDI” token, with a minting limit of 1,000 per time and a total supply of 21 million.

(5 )ORC-20 Release

ORC-20 is an improved protocol for BRC-20 developed by OrcDAO. On April 30, OrcDAO released "About ORC-20". According to reports, ORC-20 is an open standard for Ordinal Token, designed to improve the functionality of the currently popular BRC-20.

(6 ) The first ORC-20 Token $ORC

Based on ORC-20, OrcDAO deployed the first ORC-20 Token $ORC on the Bitcoin network. Official data shows that as of 1:29 on May 4, $ORC has been minted.

（7 ) Bitcoin transaction fees exceed block rewards for first time since 2017

Block number 788695 is an important milestone for miners amid Bitcoin's recent surge in transaction fees. For the first time since 2017, the transaction fees for a single block exceeded the block rewards allocated to miners. In this particular block, transaction fees reached 6.7 Bitcoin, exceeding the block subsidy of 6.25 Bitcoin.

Since the first wave of craze reached its peak, in the following month, the BRC20 and Ordinals tracks gradually cooled down, but a large number of them still emerged. Some new hot spots, these hot spots further prove the continued vitality of this field:

For an introduction to various protocols, see the table below:

2. Talking about BTC NFT and BRC20 from the perspective of cultural differences Value

About BTC NFT and BRC20 , until today, many people still have a lot of doubts. For example, some people will say that BTC NFT has all the data on the chain, but Ethereum’s NFT is not. In Ethereum, most of the pictures or multimedia data are hosted off-chain. But in fact, NFTs on Ethereum can also be made into BTC NFTs, such as the recent Ethscriptions and ERC-20. They all draw on ideas related to Ordinals, and have also produced more than a hundred-fold increase in Ethereum.

In addition, the cost of BTC NFT is relatively high. Although it is now popular due to the wealth effect, is it sustainable? Some people will question that BRC20 is also just a short-lived traffic star and will soon become obsolete. What is the value of BTC NFTs and BRC20 to the industry in the long term? Do they have any meaning at all?

Existence is There are levels of meaning and value. Those who made the judgments just now may not understand the cultural differences between the BTC and ETH chains. Why are cultural differences suddenly mentioned?

Because sometimes a thing Being done this way, and something being done that way, does not necessarily have a logic behind it, but just because the person who does it feels that it is right to do it, and the person who does it feels that it is right to do it, that's all. .

On Ethereum, People are used to storing things in Arweave or IPFS, or even just storing them on a server, and then putting a link to them. It doesn't mean there is anything wrong with this. Even if others think that you have changed the picture, sometimes they still can’t find the picture. What’s going on? This is not a decentralized thing. Even so, people don't take it seriously, because they think that's how it is. Just save a link. Who asked you to save the whole thing? It's meaningless. This way of thinking has been formed, or to a larger extent, Such a culture.

And on the BTC chain A unique cultural atmosphere has been formed. If there is no chain, you can just save a link and connect it to your own server, but the server may also be shut down. If you do this kind of thing, it is dishonest. It goes against the unique spirit of BTC.

The things on BTC are particular It is fully wound, and there is no room for blasphemy in the engraving on the gold surface. Different cultures are destined to have different ways of thinking. The integrity of things cannot be tolerated on BTC and users would rather spend more than get a discount.

Extension, although there is only one letter difference in the names of BRC20 and ERC20, its logic is different from the bottom level. After the deployer has deployed it, he still has to work hard to put it out. From the perspective of the participants, everyone is on the same starting line for competition. This is fairness that is not available on Ethereum, which is reflected in this. What comes out is cultural differences, so it may be difficult for you to define which is right and which is wrong. You say that if you keep everything connected, it must be right. I don’t think so. This may be more of a difference than a question of whose position is right and whose is wrong.

3. Move forward amid controversy, Breaking through prejudice

From the perspective of ecological participants From a perspective, we can simply divide them according to the long side, the short side and the wait-and-see side:

Multiple:

1. Exchange:Exchanges such as Binance and OKX are more of a wait-and-see mentality as they do not want to miss out on new potential opportunities in the new track. While advancing, OKX has made many moves, partnering with Unisat to launch the BRC20 and Ordinals NFT trading markets; Binance has also launched the BTC NFT market and published multiple reports on BRC20 to express its concern for this field; other small firms Out of the need for traffic popularity and making money, there is also enough motivation to participate;

2. < span style="font-family: Arial, Helvetica, sans-serif; font-size: 18px;">Miners: Early miners did relatively ignore Ordinals, but at this stage miners recognize Ordinals and BRC20 It is profitable. On the one hand, block rewards + transaction processing income increase, on the other hand, we see opportunities for the ecosystem to become bigger and more prosperous, and the miners’ voice is expected to increase. For example, we can see that f2pool is actively entering the Ordinals ecosystem; < /span>

3. Developers: The first category is the Ordinals community and early BTC core Builders, represented by Unisat, Xverse, Ordinals wallet and various protocol creators. This type of people is based on actual The action is to go long in the BTC ecosystem; the other type is developers who see opportunities in other ecosystems to be profitable, such as project parties on ETH and Solana, and come to take advantage of the BRC20 dividends.

< strong>Empty:

1. Bitcoin developers: Some developers believe that it destroys the narrative logic of Bitcoin, and It has caused congestion on the chain; some developers of the Lightning Network and side chains will think that Ordinals is a bunch of garbage stuffed on the main chain;

3. Flash in the Pan: Part Investors including exchanges will feel that BRC20 is only a short-term hot spot, a flash in the pan and will not last;

4. Bitcoin NFT Valueless Theory: Some people will say that BTC NFT is quite Therefore, all data is on the chain, but Ethereum’s NFT is not. Ethereum often has pictures or multimedia data mostly hosted off-chain, but in fact, NFT on Ethereum can also be made into BTC NFT, but in This approach has not been adopted in the past, indicating that users may not care much about this thing. Moreover, the cost of BTC NFT is relatively high. Although it is now popular due to the wealth effect, in the long run, it has no value to the industry;

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Flow Insufficient people:Without the large-scale entry of external funds, BTC NFT will encounter the same difficulties as other chain NFTs;

5. Walk-and-see:Opensea, Blur and others have expressed interest in BTC NFT and may enter Ordinals; Opensea wrote an article on Ordinals on May 5.

Ordinals And BRC20 has many potential stakeholders. It grows out of controversy and cultivates valuable consensus among prejudices. After a few months, we are surprised to see that this field is still under construction and users continue to pour in. The previous controversy means the early stage of consensus. Behind the prejudice is the opportunity to participate. The controversy may be Ordinals. The ecosystem will continue A positive sign of development; in the iterative process of the paradigm cycle, the game-breakers between each generation are insulated and often have no path dependence.

4. The leader of consensus: $ORDI

BRC20 protocol creator @domodata said when he created BRC20 that it was just an interesting experiment, he believed that there would almost certainly be better design choices and optimization improvements. As such, this is a very dynamic experiment where the Bitcoin community is encouraged to tinker with standard designs and optimizations until a general consensus is reached on best practices (or a decision is made that this is a bad idea altogether).

$ORDI It is the first token based on BRC-20. It has no utility and can be treated as a Meme token.

Currently, $ORDI’s In a sense, the currency price has become a confidence support for the BRC20 track and even Ordinals. There is a certain correlation between the $ORDI currency price and on-chain casting activities.

From a protocol level,the founders and various Ordinals builders, creators and enthusiasts continue to produce a variety of fresh The idea of ​​​​injecting new impetus into this track. At this stage, everyone is not so concerned about the roadmap or utility, but more concerned about the community and some cool/historical/rare attributes, and these are growing in the Bitcoin community staged here.

Looking back at $SHIB, $PEOPLE and the recently popular $PEPE, these MeMe coins have generated extremely strong wealth effect, and reached its peak after being listed on first-tier exchanges such as Binance. The MeMe coin concept has become one of the most talked about investment opportunities in the cryptocurrency space.

As far as $ORDI is concerned, it has the following characteristics:

(1) Cultural identity:The first BRC-20 The token has a Punk-like narrative and is also the BRC-20 token that is the most out of the circle and has the most consensus;

(2) Community construction:$ORDI’s unique attributes attracted a large number of investors and community participants. The huge profits of investors make them often have common interests, views and beliefs in $ORDI, forming a consensus system. This consensus is based on social media, online forums and other community communication channels, providing a strong impetus for $ORDI;

(3) Social communication:According to observations, $ORDI appears very frequently on social media and spreads Broad coverage;

(4) Capital Favor:Centralized exchanges and investment institutions represented by OKX are deeply involved in the construction of the BTC ecosystem, promoting the prosperity of related tracks and further benefiting $ORDI.

$ORDI is currently consolidated It has gained the greatest consensus on the entire track and has been listed on exchanges such as OKX. As MeMe, the leader of the BRC20 track, we are optimistic about its potential to be listed on Binance in the future.

Looking back at the past $SHIB, $People and $PePe have all experienced high growth after being listed on Binance (early investments have increased more than 10 times since being listed on Binance), and compared with MEMEs such as $SHIB , $ORDI has a relatively small market value. Combined with the current bear market background, we tend to believe that $ORDI is far from reaching its peak market value.

In addition, in line with the narrative of the Bitcoin halving cycle and the long-term development of BRC20 and Ordinals ecology, $ORDI There is still a lot of room for people's imagination to follow.

In short, as a recent innovative narrative in Bitcoin and even the entire Crypto field, BRC20 and BTC NFT have attracted more attention, and along with the short-term speculation, they have also produced many wealth effects.

For investors , you can pay attention to the opportunities brought by subsequent new changes in protocol standards such as BRC20 and BTC NFT, and pay special attention to the allocation opportunities of the leading $ORDI after oversold.

With the wealth effect and As the number of users increases, products in the ecosystem continue to compete, and the infrastructure will gradually be built and improved. Under the major narrative of Bitcoin halving in the coming year, I believe that BRC20 and BTC NFT will occupy an extremely important ecological niche in the entire Crypto field.