Bitcoin NFTs and Scarcity
For those of you who are curious about Bitcoin’s NFTs, aka Ordinals, we are going to take a deep dive into their history, how they are made, and especially important, their scarcity.
History of Bitcoin and NFT
The relationship between Bitcoin and NFTs has a shallow history: in 2013 and 2014, Mastercoin and Colored Coins were conceived with the goal of adding new capabilities to the Bitcoin ecosystem and creating new cases.
Mastercoin was conceived as a smart contract, but was never successfully adopted due to its inherent incompatibility with the Bitcoin base chain. Colored Coins, on the other hand, had a simpler vision. The idea was to color certain Bitcoins (BTC) and link their identities to real-world assets.
However, due to limited adoption, incompatible base layers, and the rise of Ethereum, Mastercoin and Colored Coins never materialized as full-fledged projects. Both adopted the concept of asset tokenization and attempted to build on the Bitcoin blockchain. This is similar to the NFT.
Then in 2014 came the Counterparty protocol, which allows users to create new chains and crypto assets (including NFTs) while leveraging the security provided by the Bitcoin network, with a basic It was built on top of the Bitcoin layer.
What are Bitcoin NFTs?
Many of the gaming solutions focused on NFTs and digital collectibles, such as Age of Chains, Sarutobi, Spell of Genesis, and RarePepes, were created using the Counterparty protocol. This is the closest example of an NFT approaching the Bitcoin network before the emergence of Bitcoin NFTs or Ordinals.
RarePepes is one of the more popular NFT (digital card) collections with a meme-frog central theme. The project itself includes several RarePepes or Rare Pepe Cards created on the Bitcoin blockchain using the Counterparty protocol.
What makes RarePepes special is the unique identifier or token that tags them. This identifier is stored in the base Bitcoin chain. And they were introduced in 2016. The following features stand out in particular
1. the Rarepepes follows the “Pepe the Frog” theme – the original Internet meme
2. It was one of the first NFT projects to introduce the concept of digital scarcity.
3. RarePepes can be bought and sold using BTC.
How Bitcoin NFT (Ordinals) Works
Now let’s take a closer look at how Bitcoin NFTs (Ordinals) work. The general understanding is that each Ordinal has a unique identifier and each is unique throughout the Bitcoin blockchain. Each position on the blockchain is the element that makes an Ordinal unique, which can be thought of as the mathematical equivalent of an ordinal number.
However, more information is needed on how this works in more detail.
SUMMARY
It is now clear that Bitcoin’s NFTs (Ordinals) have a history and shape all their own. It is built on top of the original Bitcoin blockchain and each has a unique location to ensure uniqueness and scarcity. However, how it works and how it guarantees uniqueness and scarcity will require further research and understanding.
※Reference URL:Bitcoin NFTs: Everything You Need To Know About Ordinals
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