Bitcoin NFT: Can it replicate or even surpass the Ethereum NFT event?

Original title: " Bitcoin NFT: Can it replicate or even surpass the Ethereum NFT event? "

Original author: Joyce, vernacular blockchain

The popularity of Bitcoin NFT has continued to rise recently. At present, the total number of inscriptions (that is, Bitcoin NFT) minted on Bitcoin has exceeded 520,000 (according to data from Dune on March 19), The previous auction of the Bitcoin NFT series TwelveFold launched by Yugalabs on March 6 pushed Bitcoin NFT to a new climax: there are a total of 300 NFTs in this series, the lowest winning bid price is 2.25BTC, and the highest winning bid price is 7.11BTC. The floor price of the most popular NFT blue-chip project Boring Monkey is 61.59ETH, worth 3.95BTC, which shows the popularity of Bitcoin NFT.

Bitcoin NFT series launched by Yuga Labs --TwelveFold

So, what exactly is a Bitcoin NFT? Why is it only now? What is the current ecology surrounding Bitcoin NFT? Let's find out.

 01 What are Bitcoin NFTs?

We are very familiar with Ethereum NFT, from the early blockbuster CryptoKitties to the current blue-chip projects Boring Ape, CryptoPunks, Azuki, etc., are all on Ethereum The ever-popular NFT project. It can be said that NFT entered the public eye with the genes of Ethereum. After the detonation of the Ethereum public chain, it gradually became an indispensable part of other public chain ecology.

When it comes to Bitcoin NFT, most people may not have much impression. However, in the more than ten years since the birth of Bitcoin, there have been various attempts on NFT, but there has been little movement. Until the emergence of the Ordinals protocol this time, Bitcoin NFT has entered the public eye with a shining attitude.

From 2009 to 2023, NFT exploration history on Bitcoin (Galaxy)< /p>

So, what is the Ordinals protocol? How to realize the minting of NFT on Bitcoin

We know that NFT is non-fungible tokens, non-homogeneous tokens, that is, each NFT is Different and indivisible, it is realized on Ethereum through token standards such as Erc721 and Erc1155. However, there is no Turing-complete smart contract on Bitcoin, and these token standards cannot be directly adopted. How can it be realized in Bitcoin?

Casey Rodarmor, the founder of Ordinals, thought of satoshi, the smallest unit of bitcoin. One satoshi is equal to one hundred millionth of a bitcoin, which is indivisible of.

The first condition is met, but how to make each Satoshi different? Casey numbers each satoshi, starting with the time they were mined.

For example, when Satoshi Nakamoto dug out the genesis block, he dug out 50 bitcoins at the same time. The first Satoshi number is 0, and the last Satoshi number of the 50th Bitcoin is 4999999999. In this way, each satoshi has its own unique number and becomes an indivisible and irreplaceable token.

Writing pictures, text, audio and even video into the numbered satoshi, an irreplaceable and indivisible NFT is cast, that is, Bitcoin NFT, the Ordinals protocol makes it possible to mint Bitcoin NFT.

However, there is a prerequisite for writing pictures and other information into Satoshi: the Bitcoin network allows writing these contents, and there is enough capacity to store them information.

After all, in the 2017 bull market, for the vigorously hyped Bitcoin expansion event, I must have experienced it vividly: the expansion event The result was that Bitcoin forked out of BCH, BCH forked out of BSV, and with it came a bunch of forked coins that are now almost zeroed.

For Bitcoin at that time, the upper limit of the block size was 1MB, and it was not allowed to write large-capacity data (limited to 80kb) into the Bitcoin block Among them, the capacity of 1MB to store Bitcoin transaction data is already somewhat stretched, let alone minting a large number of NFTs.

However, in the Bitcoin expansion discussion in 2017, the Bitcoin community carried out a Segwit upgrade, which upgraded the effective block size of Bitcoin from 1MB to 4MB. In addition, the Taproot upgrade in 2021 will release data restrictions, making it possible to store arbitrary data (less than 4MB) in Bitcoin, which laid the foundation for today's Bitcoin NFT.

Since the first NFT was minted at block height 767430 on December 14, 2022, 502,000 NFTs have been minted in the past 3 months The minted NFT content includes pictures, text, audio, video, and applications. The most exaggerated one is an NFT minted on February 2, 2023, which occupies a capacity of 3.9MB, while the largest Bitcoin The capacity is only 4MB.

Number of Bitcoin NFT minted on Ordinals on March 16, data source: Dune

Bitcoin 774628 block, block capacity is 3.96MB, data source: mempool

02 What are the characteristics of Bitcoin NFT

1) Data is stored on the Bitcoin chain , High security

The biggest feature of Bitcoin NFT is that the data is completely stored on the Bitcoin blockchain.

As we mentioned above, Bitcoin allows larger data to be stored on the chain after Segwit expansion + taproot upgrade, so the Ordinals protocol takes advantage of this , and store all minted NFT original data on the Bitcoin chain

Bitcoin, as the leading project in the encryption industry, has been safe since its establishment more than ten years ago It is obvious to all that it is the public chain with the highest degree of decentralization and the highest security factor. Therefore, Bitcoin NFT has the same level of security as Bitcoin.

After all, Ethereum and other public chain NFTs are mostly stored in Filecoin, AR or even other centralized cloud platforms, and what is stored on the chain is only the data pointing to the link. The original data is not only modifiable to a certain extent, but also has the possibility of being lost.

2) Limited storage space

All the original data of Bitcoin NFT mentioned above They are all stored on the Bitcoin chain, and the block size of Bitcoin after expansion is only 4MB, that is to say, this 4MB space not only needs to accommodate all transaction information during this period, but also stores all NFT data .

So compared to other public chain NFTs, this space is very limited. For example, as we mentioned earlier, an NFT occupied a block size of 3.9M on February 2. When the Bitcoin NFT market becomes very active, the block size of 4MB will definitely become the biggest constraint, and even affect Bitcoin. Coin normal transactions. This is why the current Bitcoin NFT is criticized by the community.

The cost of Bitcoin NFT casting is related to the size of the NFT and the speed of casting. The larger the NFT, the higher the cost of casting, plus the block capacity of Bitcoin restrictions, so only certain types of NFTs are suitable for minting.

3) No royalty feature

For artists or NFT creators, the most The attractive part is none other than royalties, allowing creators to truly benefit from their works. This is also a sharp tool for NFT to break through the circle and enter the creative circle.

The reason why the NFT of Ethereum and other public chains can freely set the royalties for creators is mainly due to the smart contract function. However, Bitcoin does not have "Turing complete" smart contract functions, so creators cannot obtain royalties from Bitcoin NFT.

For creators, to benefit from Bitcoin NFT, they can only obtain one-time auction revenue and benefit from the appreciation of the remaining NFT. The incentives for creators do not seem to be enough at present.

4) Its value is related to the scarcity of Satoshi

From Ethereum blue chip NFT we It is not difficult to conclude that its value is closely related to the artistic quality of NFT, team operation ability, community consensus, etc., but besides these, Bitcoin NFT also has a lot to do with the position of Satoshi.

For example, the position of the corresponding Satoshi (the creation block or the first block after halving, etc.), the uniqueness of the serial number of Satoshi (such as the previous 10,000 serial numbers), whether the entire NFT series is minted in the same block, etc., factors related to Satoshi will become important considerations for the value of Bitcoin NFT.

Of course, scarcity has always been the fundamental reason why high-value NFTs are so popular.

03 What ecology does Bitcoin NFT currently have?

Bitcoin NFT has really exploded since the beginning of February. In less than a month and a half, some wallets, mint service platforms, trading and data platforms have appeared one after another. However, at present, many websites are still in a state of incomplete function or very crude, and it can be seen that the launch is very hasty.

Currently there are not many collectibles on Bitcoin, but Crypto punks and Yuga labs The newly released TwelveFold series are all very star Bitcoin NFT series. In addition, there are some familiar NFTs that have just migrated from other public chains such as Ethereum.

However, compared with NFTs such as Ethereum, the peripheral support of Bitcoin NFT is still very immature. If you are interested, you can explore it according to the tools in the picture.

04 Summary

When the Bitcoin community was discussing the upgrade of Segwit and the expansion of Taproot, it never expected that the new species of Ordinals would be born, bringing a new situation to the Bitcoin NFT ecology.

With the conservative nature of the Bitcoin community, once this is expected, there is a high probability that Ordinals will not have a chance to appear. After all, for the Bitcoin community, the security and stability of the entire network is the top priority.

In particular, Bitcoin NFT may bring larger blocks, which means that the hardware for miners to run full nodes increases, and it becomes more difficult to operate full nodes, which may This leads to a reduction in the number of miners and affects the security of Bitcoin.

However, on the other hand, Ordinals actually paid to use the idle block space at the current initial stage, creating greater value for miners . If the minting and trading of Bitcoin NFT further explodes in the future, it may bring more transaction fees to miners like Ethereum NFT, thereby better ensuring the security of the Bitcoin network.

In general, Bitcoin NFT has just started, and there are many problems compared with NFT of other public chains such as Ethereum. As a new substance that changes the ecological structure of Bitcoin, the future can be expected.

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