Ordinals, a protocol used to write digital assets to Bitcoins, is making waves in the cryptocurrency world. On Saturday, the protocol had its busiest day, with more than 223,000 inscriptions made in one day. This marks the first time that more than 200,000 inscriptions have been written in a single day, indicating that the protocol is as popular as it is in its fifth month since its launch.
The trend was started by a pseudonymous data chain enthusiast named Domo, who created the “BRC-20” token standard as an experiment. Nearly 6,900 tokens using the newly developed standard have been launched, including several meme tokens with a multi-million dollar market cap, according to data from brc-20.io.
While not every text-based inscription is associated with a convertible token, the ratio on Saturday showed a shift in Ordinal usage compared to earlier in the month. North 99.8% of the total inscriptions on Saturday were text-based compared to only 272 image-based inscriptions, representing 0.1% of the daily total.
However, Ordinals Project Communications Director Isabel Foxen Duke expressed concern that the figure was inflated by a flood of inscription-generated BRC-20 tokens, which are highly insecure and could pose a risk to retail investors. Some projects that have quickly embraced experimental token standards have faced roadblocks, such as the UniSat Wallet, which was compromised “due to vulnerabilities in (its) codebase.”
Inscriptions are sometimes referred to colloquially as Bitcoin NFTs. However, the process of creating inscriptions and how the respective data is stored is different compared to digital assets created on blockchains such as Ethereum or Solana. Instead of creating entirely new tokens, using Ordinals, people write down content such as images or text to individual Satoshis, the smallest denomination a Bitcoin can divide (1/100,000,000 BTC). And that content is stored directly and permanently on the Bitcoin blockchain.
All in all, Ordinals opens the door to activity in Bitcoin in a way that was not possible before. It’s exciting to see how the protocol evolves, and while there are some concerns about the risks that come with BRC-20 tokens, the potential for innovation is huge. This is certainly something to watch out for in the cryptocurrency world.