What Are Bitcoin Ordinals? A Simple Guide

Bitcoin Ordinals are a way to create unique digital collectibles directly on the Bitcoin blockchain. Think of them like NFTs, but instead of being minted on platforms like Ethereum or Solana, they live natively inside individual satoshis, the smallest unit of Bitcoin.

This became possible after two major Bitcoin upgrades: SegWit (2017), which changed how transaction data is stored, and Taproot (2021), which expanded Bitcoin’s capacity to include larger and more complex data. By combining these features, developers found a way to “inscribe” data, like an image or piece of text, onto individual satoshis without altering Bitcoin’s core protocol.

The idea took off fast. Since launching in early 2023, the Ordinals protocol has seen over 70 million inscriptions and has sparked a wave of creativity and debate. Some call it a new era for Bitcoin, while others argue it distracts from Bitcoin’s original purpose. Either way, Ordinals have pushed Bitcoin into uncharted territory.

Ordinals in Plain Terms

Each Bitcoin is made up of 100 million satoshis (sats). On their own, these sats are identical and interchangeable; one sat is just like any other. But Ordinal Theory changes that by giving each sat a serial number based on when it was mined. That number, or “ordinal,” lets users track individual sats and assign meaning to them.

This tracking system doesn’t change Bitcoin’s code. The network still treats all sats as equal. The numbering exists outside the protocol, maintained by users running the “ord” indexing tool. It’s a bit like adding custom labels to identical items in a warehouse. The labels don’t change what’s in the boxes, but they let you treat some as more interesting than others.

Ordinals take it a step further by allowing users to “inscribe” data directly into a sat. That data might be an image, a text file, or even a video. Once inscribed, the sat becomes a digital artifact, a collectible asset stored permanently on-chain.

Imagine a pool full of identical coins. Ordinals let you etch a drawing onto one of those coins. It’s still a coin, but now it carries something unique. That’s what gives Ordinal Inscriptions their value. They turn a tiny, fungible unit into a one-of-a-kind asset, tracked by its place in Bitcoin’s history.

How Bitcoin Ordinals Work

Bitcoin Ordinals exist thanks to two key upgrades: SegWit (2017) and Taproot (2021). These updates changed how Bitcoin handles transaction data, opening the door for users to attach extra information to individual sats, without breaking the network.

A user picks the content they want to inscribe. It could be an image, a short video, or just plain text. That data is then embedded into a Bitcoin transaction, specifically in the “witness data” section introduced by SegWit. This section sits outside the main transaction body and doesn’t count fully toward Bitcoin’s block size limit, which allows for more flexibility.

Taproot made inscriptions even more practical. By using Schnorr signatures, it reduced the size of complex transactions and supported larger data payloads. Combined with SegWit, this lets users inscribe up to around 4 megabytes of content in a single transaction.

Once the transaction is broadcast and mined, the inscription becomes permanent. It’s now part of Bitcoin’s ledger forever. The sat carrying the data can be tracked using Ordinal Theory, and users can view the inscription using compatible wallets or explorers.

Because Bitcoin doesn’t natively support this system, the community maintains indexing tools (like the “ord” protocol) to keep track of which sats are inscribed. Without this layer, they’d look like normal sats on-chain.

History and Ecosystem Growth

Before Ordinals, Bitcoin had already seen several attempts to bring non-fungible assets onto the network. Colored Coins in 2012 tried to mark specific bitcoins as representing unique assets, but the lack of native support made the idea clunky. Counterparty, launched in 2014, built on Bitcoin’s blockchain to enable early collectibles like Rare Pepes, but relied on separate infrastructure. Stacks followed in 2017 with a sidechain approach, allowing NFT-like functionality but still outside Bitcoin’s core layer.

The breakthrough came in early 2023 when Casey Rodarmor introduced the Ordinals protocol. It didn’t require a sidechain or external platform. Instead, it used Bitcoin’s existing structure to inscribe data directly onto individual sats. In December 2022, Rodarmor inscribed the first Ordinal as a test: a pixelated skull. The public mainnet launch followed in January 2023, and adoption surged almost immediately.

By mid-2023, over 200,000 inscriptions had been minted. That number ballooned past 70 million by 2025. Notable projects helped drive this growth. Ordinal Punks were among the first 650 inscriptions, trading hands for up to 2.2 BTC. Yuga Labs launched TwelveFold, a generative art series, signaling mainstream interest. BitcoinShrooms, a pixel art series, even made it to Sotheby’s auction house.

Alongside the projects, infrastructure matured. Marketplaces like Magic Eden and UniSat became major hubs for trading Ordinals. OKX and Gamma joined in with their own integrations. Wallets such as Trust Wallet added native support, helping onboard non-technical users.

Activity cooled after the 2024 Bitcoin Halving. Higher fees pushed out casual users, but dedicated collectors and projects kept the ecosystem alive.

Bitcoin assets (Ordinals, Runes, other fungibles) are down bad yet they still account for 40% of daily transactions.

We’re seeing ~350,000 Bitcoin transactions per day of which ~150,000 are non-monetary (Runes, BRC-20, Ordinals, & Alkanes)

For June we’re looking at a total of… pic.twitter.com/BGpvDfoC1h

— cbspears ◉ (@cbspears) June 30, 2025

Use Cases Beyond NFTs

Most people associate Ordinals with digital art and memes, but their utility goes further. Because inscriptions live directly on the Bitcoin blockchain, they offer permanence and security for a range of digital assets.

Digital collectibles remain the most active use case. Early projects like Ordinal Punks or BitcoinShrooms showed how pixel art and meme culture could find a permanent home on Bitcoin. For collectors, the appeal is in both scarcity and immutability.

Beyond that, some projects use Ordinals to record immutable documents. This could include academic certificates, legal agreements, or timestamped messages. Once inscribed, the data can’t be altered or deleted, making it useful for long-term proof-of-record.

Gaming assets are another emerging category. Developers have experimented with turning in-game items, such as unique weapons, cards, or achievements, into tradable Ordinals. While these lack dynamic features common in Ethereum NFTs, they gain credibility through on-chain provenance.

BRC-20 tokens also emerged as a new use case. These are fungible assets created by inscribing token data onto satoshis, without using smart contracts. Examples include meme tokens and experimental DeFi tools, though the lack of programmability makes them limited.

Other projects have explored payment metadata, embedding short notes, invoice IDs, or multi-signature instructions. It’s niche, but shows how flexible inscriptions can be when paired with simple utility.

Ordinals vs. Ethereum NFTs

Ordinals and Ethereum NFTs both offer digital ownership, but they do so through very different mechanics. Ethereum NFTs rely on smart contracts and typically store their media off-chain via IPFS or similar systems. This setup allows for dynamic features, such as royalties, interactive elements, and integration into games or DeFi, but it also introduces points of failure or dependency.

Ordinals, by contrast, are entirely on-chain. Every image, line of code, or piece of metadata lives directly within the Bitcoin blockchain. This guarantees permanence, but comes at the cost of flexibility. There’s no support for programmable features like auto-royalties or evolving traits, and file sizes are capped.

Fees are another tradeoff. Ethereum’s move to Proof of Stake reduced transaction costs, especially on Layer 2s. Bitcoin Ordinals, tied to Proof of Work, still face congestion and high fees, especially during peak periods.

For collectors who value permanence and Bitcoin’s security, Ordinals offer something unique. For those seeking utility and interoperability, Ethereum NFTs still hold the advantage.

How to Mint and Trade Ordinals

Minting an Ordinal begins with choosing between a technical or user-friendly method. Advanced users can run a Bitcoin node and install the “ord” app to inscribe data manually. This gives full control but requires syncing the blockchain and managing raw transactions.

Most people use no-code platforms like Gamma, UniSat, or Magic Eden. These services let users upload an image, text, or file and inscribe it onto a satoshi through a simple interface. Fees are paid in BTC and vary based on network congestion. Inscriptions up to ~4MB are supported, but larger files cost more to process.

Once minted, Ordinals can be traded on marketplaces like Magic Eden, OKX NFT, UniSat, Ordswap, or Ordinals Market. To buy or sell, users need a Taproot-compatible wallet, such as Xverse, UniSat, Trust Wallet, or Magic Eden Wallet. These are built to recognize and handle Ordinal inscriptions properly. Sending them to a non-Taproot address risks permanent loss.

Over-the-counter trading exists but comes with higher risks due to the lack of escrow protections. Scams and phishing are common, especially when wallets or links are shared in DMs.

Before minting, it’s best to use a fresh wallet to avoid accidentally inscribing to a wallet with old UTXOs. Always verify that the marketplace or wallet is legitimate by checking the URL, team, and reviews.

Ordinals live on-chain forever. Mistakes during minting or trading can’t be reversed, so caution matters at every step.

Pros and Cons

Debate Around Ordinals

Bitcoin purists argue that the network should remain focused on monetary use, not digital collectibles. To them, inscribing images and memes clogs blockspace with non-essential data, raises fees for everyday transactions, and shifts Bitcoin’s purpose away from peer-to-peer payments. Some label it spam. Others say it dilutes the vision Satoshi Nakamoto originally laid out in the whitepaper.

Developers and collectors push back. They argue that Ordinals don’t break any rules; they simply use what the protocol already allows. If people are willing to pay for blockspace, that’s market demand. More demand equals higher fees, which strengthens long-term miner incentives. That’s especially relevant after the 2024 halving and in a future where block subsidies shrink.

The question is no longer whether Ordinals can exist. They do. The real question is whether Bitcoin should be limited to payments, or if it can evolve into a broader data settlement layer, one where cultural artifacts and financial value coexist on the same chain.

Conclusion

What’s clear is that Ordinals have introduced a new layer of experimentation to Bitcoin, opening the door for collectibles, metadata storage, and alternative token models without altering the protocol itself. This has attracted artists, collectors, and developers who previously dismissed Bitcoin as too inflexible for innovation.

Still, like all things in crypto, Ordinals come with tradeoffs. If you’re thinking about minting, collecting, or trading them, don’t jump in blind. Research the tools, understand the risks, and verify everything before making a move, especially when dealing with permanent data and irreversible transactions.

Frequently Asked Questions (FAQ)

Can I still buy Bitcoin Ordinals in 2025?

Yes. Ordinals are actively traded on platforms like Magic Eden, UniSat, and OKX NFT. You’ll need a Taproot-compatible wallet (e.g., Xverse or UniSat) and some BTC to cover fees.

Are Ordinals just NFTs on Bitcoin?

Sort of. They function like NFTs but differ in architecture. Ordinals store data fully on-chain inside Bitcoin transactions, while Ethereum NFTs often point to off-chain files via smart contracts.

Is minting an Ordinal expensive?

It can be. Inscribing large files during periods of network congestion may cost over $50. Using smaller files and monitoring mempool activity can reduce costs.

Do I need a node to mint an Ordinal?

No. Technical users can run a node and use the ord tool, but most people use no-code platforms like Gamma or UniSat to inscribe Ordinals easily.

What happens if I send an Ordinal to the wrong wallet?

You may lose it. Many Bitcoin wallets don’t support Ordinals, and sending them to a standard (non-Taproot) address can result in irreversible loss. Always use supported wallets.

What are BRC-20 tokens and how do they relate to Ordinals?

BRC-20 tokens are fungible tokens built using the Ordinals protocol. Instead of smart contracts, they use inscriptions to define and track balances, mostly for meme coins.

Is storing everything on-chain better than IPFS?

It depends. On-chain data ensures permanence and decentralization, but it’s costly and limited in size. IPFS-based NFTs offer more flexibility but rely on external infrastructure.