What Is Ordinals?

Ordinals was developed by Casey Rodarmor and drew wide interest in 2023. According to ordinal theory, satoshis are numbered in the order they were mined and are tracked through transfers according to a specific rule. To create an inscription, the content is placed in the witness section of a Bitcoin transaction; this became possible thanks to the flexibility brought by the SegWit and Taproot upgrades. In this way, the content is stored entirely on the Bitcoin chain.

Visual collections, text, and small applications have been created with Ordinals; experimental token standards such as BRC-20 have also been developed on the same infrastructure. This has opened a new use case for Bitcoin and increased miners' transaction fee revenue. To avoid accidentally spending inscribed satoshis, you need to use wallets that support Ordinals.

Ordinals has sparked debate in the Bitcoin community. Supporters see it as a natural result of the network's permissionless nature, while critics argue that it fills block space with non-payment data, raises fees, and increases the cost of running a node. Ordinals-based assets can have low liquidity, and their prices show high volatility.