This article will use 15 data charts to review the history of Bitcoin ordinals from 0 to a market value approaching 3 billion US dollars, promoting the development of the Bitcoin ecosystem.
Index:
Ordinals open the Pandora’s Box of the Bitcoin ecosystem
Bitcoin Punks lead the first appearance of Ordinals
BRC-20 ignites Bitcoin Ordinals
OKX shines in the layout of ordinals
Sophon targets BRC-20 and sweeps the market with robots
ORDI successively goes online on top exchanges OKX and Binance
Ordinal activities take turns to launch “stress tests” on major public chains
Ordinal narratives are expected to become a new potential growth point for Bitcoin miner income
External crisis: Bitcoin Core client developer Luke Dashjr calls for the ban on ordinals
Internal crisis: Disagreements between BRC-20 creator domo and largest indexer UniSat
The diverse ecological value of Ordinals cannot be ignored
The highly anticipated Runes protocol proposed by Ordinals founder
The potential of Atomicals protocol based on UTXO model
Airdrops for Bitcoin degen players may become the norm, RSIC’s first high-value airdrop
Bitcoin scalability exploration, BTC L2 sees explosive growth
After being listed on Binance last year, the Bitcoin ordinals experienced an explosion, which then prompted other major public chains to follow suit and deploy ordinal protocols. This article will use 15 charts to review the entire process of Bitcoin ordinals from 0 to 1.
Ordinals open the Pandora’s Box of the Bitcoin ecosystem
(Source: https://dune.com/dgtl_assets/bitcoin-ordinals-analysis)
In December 2022, Casey launched the Ordinals protocol, opening the Pandora’s Box of the Bitcoin ecosystem. The Ordinals protocol assigns a unique sequence number to each satoshi, and any user can engrave additional information on the satoshi, including text, images, videos, and 3D models.
These inscriptions can be stored in Bitcoin wallets and tracked in Bitcoin transactions, with characteristics such as immutability and decentralization. Casey positioned it as a way to store eternal and unchanging things on Bitcoin, initially used to create and store NFT collectibles. Currently, there are over 57 million Bitcoin inscriptions, contributing more than $230 million in fees.
Bitcoin Punks lead the first appearance of Ordinals
(Source: https://geniidata.com/user/orddata/bitcoin-punks)
On February 9, 2023, Bitcoin Punks, the first NFT on the Bitcoin chain using the Ordinals protocol, was uploaded from the Ethereum CryptoPunks byte, causing a buzz on social media. Within less than two days of its birth on February 9 at 3:24 PM, all 10,000 Bitcoin Punks were minted. Initially, most people didn’t pay attention to Ordinals, thinking it was just another copy of Punks on a different blockchain, until the insurrection brought by Ordinals became relevant to everyone.
BRC-20 ignites Bitcoin Ordinals
(Source: https://dune.com/dgtl_assets/bitcoin-ordinals-analysis)
In March 2023, anonymous developer domo launched BRC-20 based on the Ordinals protocol. BRC-20 is essentially a specific JSON text file used for transactions. The JSON file is the ordinal inscription and has a unique identifier.
Each JSON file corresponds to a specific BRC-20 token. BRC-20 can be seen as a standard for issuing Bitcoin “clone” coins, with the characteristic of fair launch. After its launch, BRC-20 quickly ignited Bitcoin Ordinals and gave birth to tens of thousands of inscription tokens. Currently, about 95% of the inscriptions on Bitcoin Ordinals are represented by BRC-20 as the main textual type.
OKX shines in the layout of ordinals
(Source: https://dune.com/domo/ordinals-marketplaces)
As the earliest mainstream centralized exchange to enter the inscription sector, OKX has demonstrated its absolute advantage in addition to the analysis and strategy of its research team. The technical reserve built by OKX over the years through OKLink has played a significant role.
The OKX Web3 Wallet, which can be regarded as the best product innovation in Crypto in 2023, relies heavily on the service data behind OKLink for the user experience of the built-in wallet. The continuous improvement of backend service stability allows the frontend product to perfectly meet user needs.
Currently, the OKX Web3 Wallet has become the preferred choice for inscription users to enter the market, with a market share of over 60% in inscription trading volume and users. From November to December 2023, the market share reached 80%-90%. On December 16, when the market trading volume on Bitcoin Ordinals reached a historical high of over $80 million, the OKX Web3 Wallet contributed nearly $74 million in trading volume.
Sophon targets BRC-20 and sweeps the market with robots
(Source: https://dune.com/queries/3381233)
In late September to mid-October 2023, BRC-20 encountered one of its biggest crises since its inception, with almost zero on-chain minting, caused by a BRC-20 attack robot named “Sophon” invented by anonymous developer Rijndael.
Sophon robot monitors the deployment of BRC-20 in Bitcoin transactions using the “first come, first served” deployment mechanism and the public nature of most Bitcoin transactions. It then broadcasts similar inscriptions with the same token code at higher fees, replacing other BRC-20 deployment transactions and making its copied BRC-20 the “official” ones.
In addition, Sophon sets each deployed token with a supply of 1, making each token have a unique holder, causing on-chain minting activities to stagnate. Fortunately, Rijndael is not a hacker, and running Sophon requires a significant cost. After running for a while, it eventually closed and donated to the open-source software opensats.
ORDI successively goes online on top exchanges OKX and Binance
(Source: https://coinmarketcap.com/currencies/ordi/)
As the first inscription token of BRC-20, ORDI experienced tens of thousands of times growth in less than a year, from a fair launch that only required gas for minting to a price exceeding $90 at one point. During this process, more users gradually became aware of the BRC-20 tokens led by ORDI and the underlying Ordinals protocol. In May and November 2023, ORDI was listed on the top exchanges OKX and Binance, and saw a tenfold increase in price within one month after being listed on Binance.
Subsequently, SATS also landed on Binance and OKX. The listing of ORDI and SATS on top exchanges showed users the positive attitude of exchanges towards inscription assets and raised expectations for more inscription tokens to be listed.
Ordinal activities take turns to launch “stress tests” on major public chains
(Source: Chain Explorer)
From mid-November to December 2023, the abundance of inscription funds began to overflow from Bitcoin to major EVM public chains, and the FOMO sentiment for the first inscription asset quickly spread to major public chains, even including testnets. Over a dozen public chains suddenly experienced millions or even tens of millions of transactions on a certain day, causing some chains to crash.
Ordinal narratives are expected to become a new potential growth point for Bitcoin miner income
(Source: https://studio.glassnode.com/metrics?a=BTC&category=&m=fees.VolumeSum&s=1672531200&u=1706198399&zoom=)
Driven by inscription activities, on December 16, 2023, Bitcoin’s transaction fees in USD reached $23.69 million, setting a new historical high. Unlike the previous two peak periods that occurred during the bull market in the four-year cycle, 2023 is not considered a bull market. This has allowed miners to see the tremendous potential of inscriptions in promoting Bitcoin network transaction fees. Especially with the approaching halving and the reduction of mining rewards, if the demand for inscriptions can be sustained, it may significantly improve miner revenue.
External crisis: Bitcoin Core client developer LLuke Dashjr Calls for the Disabling of Datacarriersize
(Original Source: https://github.com/bitcoin/bitcoin/pull/28408)
Bitcoin Core client developer Luke Dashjr submitted PR #28408 to Bitcoin Core Github in September 2023, proposing an update to “datacarriersize” to filter out transactions carrying new script data called “datacarriersize”. On December 6, 2023, Luke criticized on social media that “datacarriersize” was being used to launch spam attacks on the blockchain through vulnerabilities in Bitcoin Core. He hoped that the vulnerability would be finally fixed before the release of v27 in 2024. Luke classified the controversial “datacarriersize” as a Bitcoin bug and was determined to fix it, becoming the biggest external crisis faced by the Ordinals and other Bitcoin datacarrier protocols at that time.
The debate surrounding the inclusion of “datacarriersize” in PR #28408 continued for a month among major Bitcoin developers on Bitcoin Core Github, with hundreds of intense discussions. At the same time, various factions representing miners, developers, communities, and users engaged in heated debates on social media. However, due to significant differences in opinions and difficulty in reaching a consensus, Bitcoin Core maintainer achow101 believed that the PR was controversial and ultimately closed it on January 5, 2024. Thus, the external crisis of the Bitcoin datacarrier protocol came to a temporary conclusion. During this period, the datacarrier asset ORDI, although affected in the short term, still experienced an overall increase of nearly 35% and reached a new all-time high.
Further reading:
Bitcoin Datacarrier Protocol Facing the Death Penalty? Core Developer Responds: Bug to be Fixed Next Year, BRC-20 Will Disappear!
Internal Crisis: BRC-20 Creator domo and Leading Indexer UniSat Face Consensus Differences
BRC-20 is based on the Ordinals protocol but is not native to the Ordinals protocol. When the Ordinals protocol is upgraded, BRC-20 faces the question of whether to follow the upgrade.
The essence of indexing is consensus carrier. In order to maintain the stability of indexing, domo froze BRC-20 at version ord v 0.9 in November 2023. However, with the development of the Ordinals protocol, issues such as the previously unidentifiable cursed datacarrier have been fixed, bringing many new features. This poses a significant dilemma for BRC-20 frozen at ord v 0.9.
On January 3, 2024, UniSat, with the largest indexing consensus in the market, chose to upgrade BRC-20 to follow the Ordinals Jubilee, which contradicted the original intention of BRC-20 creator domo. Domo accused UniSat of forking BRC-20. Led by leaders like BestinSlot and domo from Layer 1 Foundation, the “stabilization faction” and UniSat and Ordinals Wallet, the “upgrade faction,” formed two opposing forces in the BRC-20 issue. One side represented the creator, and the other side represented the largest indexing consensus. BRC-20 faced an unprecedented internal crisis.
Although opinions were divided, the intentions behind BRC-20 were good. After friendly communication between the two parties, domo and UniSat reached an agreement on January 5, two days later, to allow BRC-20 to follow the Ordinals upgrade. OKX and Binance also supported the BRC-20 upgrade following the Ordinals protocol. Although the crisis was resolved in a short period, it made people realize that assets derived from the Ordinals protocol in the early stages of development are prone to consensus splits.
The Diverse Ecological Development of Ordinals Datacarrier Assets Cannot Be Ignored
(Original Source: https://dune.com/dgtl_assets/bitcoin-ordinals-analysis)
Although text-based datacarriers like BRC-20 dominate the datacarrier asset space, other types of datacarrier assets have never stopped developing. Accurate positioning still allows them to have their own development space.
From Bitcoin Punks to Bitcoin Frogs to NodeMonkes, image-based datacarrier assets represented by NFTs have maintained steady development. The characteristics of being fully on-chain and tamper-proof have returned to the essence of NFT collectibles. 3D model datacarrier assets represented by BRC-420 Blue Box demonstrate the imagination of building a metaverse on Bitcoin. On January 23, 2024, the historical high of 61,000 model datacarriers were minted. Building applications on Bitcoin has become a reality.
The Runes protocol proposed by the founder of Ordinals is highly anticipated.
(Original Source: https://geniidata.com/user/jonsnft/degen)
Due to the adverse consequences of the increased UTXOs caused by BRC-20, Casey, the founder of the Ordinals protocol, publicly criticized BRC-20 on social media on September 25, 2023, and proposed a new tokenization standard protocol called Runes as an alternative to BRC-20. Runes balances are recorded and stored by UTXOs, and a single UTXO can contain any amount of Runes. Compared to BRC-20, Runes based on UTXOs align more closely with the native characteristics of Bitcoin, reducing the harm caused by the UTXO set expansion and the risk of consensus fragmentation due to reliance on external indexes.
The “official version” of the Runes protocol, launched by Casey, is scheduled to go live during the next Bitcoin halving. However, the vision of Runes has already been realized in some grassroots protocols, such as Rune Alpha, which has deployed COOK token runes. PIPE Protocol, introduced by datacarrier pioneer Benny, has given birth to PIPE and other token runes. RSIC’s new mining gameplay produces a certain type of token runes that will be available after the Runes protocol goes live.
Atomicals Protocol based on UTXO model demonstrates potential.
(Original Source: https://dune.com/0xmatsu0x/atomicals-vs-ordinals)
In September 2023, Arthur introduced the Atomicals protocol, an improved protocol based on the Bitcoin UTXO model, with GPU Bitwork mining mechanism. Atomicals defines three types of assets: NFTs, ARC-20, and Realm, with ARC-20 being a colored SAT token standard, with each ARC-20 token backed by 1 satoshi. Due to its closer alignment with the Bitcoin ecosystem, Atomicals is considered by the community to have the potential to continue the prosperity of the datacarrier ecosystem initiated by Ordinals. As it shares the same name as the basic unit of matter, Atomicals has formed a physical MEME culture led by ATOM and most other ARC-20 tokens are named after physical terms. On January 1 and January 21, 2024, the forging activities of QUARK and SOPHON propelled Atomicals to surpass Ordinals in terms of daily forging/deployment numbers.
Airdrops for Bitcoin degen players may become commonplace, RSIC’s first high-value airdrop.
(Original Source: https://dune.com/keyinotc/rsic-airdrop)
On January 22, 2024, RSIC airdropped to 9.27k addresses, including active addresses in Ordinals and holders of blue-chip BTC NFTs. RSIC has a total supply of 21,000 and its current floor price exceeds 0.036 BTC (approximately $1,500). This is the first time that a datacarrier project has conducted a high-value airdrop as a cold start, and future airdrops to active Bitcoin players may become more commonplace.
Exploring the Path of Bitcoin Scalability, BTC L2 Experiences an Explosion
(Original Source: https://bitvm.gitbook.io/cn/btc-layer2/overview/detail)
According to statistics from the BitVM Chinese community, there are currently over 30 publicly available BTC Layer 2 solutions, which can be further divided into sidechains, off-chain computation, Rollup, data availability, state channels, client verification, and others based on their characteristics. Sidechains include BEVM, MAP Protocol, and Merlin Chain, while Rollup includes QED Protocol, BitVM, and Bison. Data availability solutions include Veda and Nubit, state channels include OmniBOLT and Lightning Network, client verification includes RGB, and others include Bool Network, Dovi, and Bitfinity Network. It is expected that more than 100 BTC Layer 2 solutions will be launched in this cycle.
In just one year of datacarrier development, various protocols and assets have emerged. However, for most early-stage protocols, the infrastructure related to indexing and data is still not robust, and my data mining capabilities for certain protocols are insufficient, so not all of them are mentioned. I apologize for any omissions.
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