Gaming, General, Web3
by Phoenixx Down

Ordinals: What They Are and How to Buy Them

ordinals

As the Open Edition meta hype, originally triggered by Jack Butcher’s ‘Checks – VV Edition’, begins to subside a little, another trend has been quietly bubbling in the background.

What Are Ordinal Inscriptions?

Ordinals is a concept which uses the Bitcoin blockchain to mint inscriptions – or NFTs essentially – and it’s had the BTC world divided. One side believes it will cause a much-needed resurgence in development on the grandfather of crypto, and the other are not convinced it’s what Satoshi Nakamoto envisioned for his creation and are repulsed by the movement.

Despite NFTs having been a part of Bitcoin since 2014, Ordinals are different in the sense that it allows users to inscribe data on individual satoshis. The Bitcoin NFTs of yesteryear store their data on a link off-chain, whereas inscriptions are stored on-chain. 

Whichever side of the fence you sit on, let’s take the time for a quick crash course into the nitty gritty of this exciting new tech that’s got everyone talking.

Wen mint?

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Slow down, Mr. Degen. The way Ordinals are minted are vastly different to what we’ve become accustomed to on ETH, SOL and the like. If you thought your initial education on DeFi and self-custody was tough, you’re about to level up your XP.

In order to mint an inscription, you must:

  • Be running a Bitcoin node
  • Run Ordinal software
  • Be able to competently write some command lines

If you can put a tick next to the three points above, you’ll not only be able to create an Ordinal, but will also have the ability to safely transfer/sell your assets held in your wallet. However, if like most you’re unable to fulfil those requirements, don’t lose hope just yet – there are ways in which you can get involved which do not require you to be a super-shadowy crypto coder.

Reservations and Escrow

The first is by keeping your finger firmly on the pulse of new projects which are opening their doors. 

Ordinal projects operate a little differently to the standard mint process we’re accustomed to. Instead of whitelisted individuals minting their NFT, the project founder/dev will do so, and a reservation system is on offer for those who are earliest into the gates of the project’s discord. Those who reserved pay the price of mint, and the project will often keep safe keeping of the NFT for the buyer in escrow. 

Why though? Wouldn’t the buyer prefer to have what they bought in self-custody? Not always.

Sparrow Wallet and Self Custody

There’s currently a big compatibility issue with Bitcoin wallets and Ordinal inscriptions. As previously mentioned, you need to be running a full Bitcoin node in order to sell, transfer and trade the NFTs. Without one, you can buy and receive, but only hold once it’s in your custody. Doing anything other than this will ensure you lose your Ordinal NFT.

Moreover, you can’t just use any Bitcoin wallet. You must create an Ordinal compatible wallet with Sparrow Wallet. This is the best option for those who wish to get involved in Ordinals, have self-custody, and are happy to wait until the tech catches up where an Ordinal wallet is developed which can perform usual trading functionality.

Some very important advice, taken from the instruction manual on how to create and set-up a Sparrow Wallet:

“As a general rule if you take this approach, you should use this wallet with the Sparrow software as a receive-only wallet. Do not spend any satoshis from this wallet unless you are sure you know what you are doing. You could very easily inadvertently lose access to your ordinals and inscriptions if you don’t heed this warning.”

If this avenue sounds right for you, follow the instructions listed in the step-by-step process via the link just above.

Wen Marketplace?

This isn’t clear just yet, but there are many working hard behind the scenes to get one up and running as soon as possible. In the meantime, all trades are done in the Discord servers of projects via OTC (over-the-counter).

If you’re used to the comfort of Opensea and Coinbase, or even Uniswap, and not familiar with the concept of OTC – again, you’ll be in for a ride here.

Discord servers will have ‘WTB’ (Want To Buy) and ‘WTS’ (Want To Sell) channels where buyers and sellers congregate to throw out bids and asks on Ordinals. Deals are made in private DMs between the two, and once a price is settled on, usually the project founder will mediate the deal to its conclusion by conducting the order of business and escrowing payments and/or assets.

It goes without saying that a lot can go wrong in this setting, so we do not encourage anyone to go ahead with this approach. However, it is the only way to currently buy and sell Ordinals, so if you do, be aware of the risks and do plenty of research on the project first.

Also, be fully aware that you could end up walking away with nothing but less BTC from the experience if you’re not careful enough.

Useful Tools and Links

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