Ordinals, a protocol used for inscribing digital assets on Bitcoin, is making waves in the cryptocurrency world. On Saturday, the protocol had its busiest day yet, with over 223,000 inscriptions made in a single day. This marked the first time over 200,000 inscriptions were made in a single day, suggesting that the protocol is as popular as ever as it enters its fifth month since launch.
The trend was kicked off by a pseudonymous on-chain data enthusiast named Domo, who created the “BRC-20” token standard as an experiment. Close to 6,900 tokens using the new-developed standard have been launched, including several meme tokens with multi-million dollar market caps, according to data from brc-20.io.
While not every text-based inscription is tied to fungible tokens, the ratio on Saturday represents a shift in Ordinals’ use compared to when the month began. North of 99.8% of the total inscriptions on Saturday was text-based compared to just 272 image-based inscriptions, representing 0.1% of the daily total.
However, the Ordinals Project Communications Director Isabel Foxen Duke expressed her concern that the numbers are inflated by a flood of inscription-generated BRC-20 tokens, which are highly insecure and may pose a risk to retail investors. Some projects that have quickly embraced the experimental token standard have encountered headwinds, such as UniSat Wallet, which was compromised “due to a vulnerability in [its] codebase.”
Inscriptions are sometimes referred to colloquially as Bitcoin NFTs. Still, the process for creating inscriptions and how each one’s corresponding data is stored is distinct compared to digital assets created on blockchains like Ethereum or Solana. Instead of creating an entirely new token, using Ordinals, people inscribe content like images or text to individual Satoshi, the smallest denomination that a Bitcoin can be divided into (1/100,000,000 BTC). And that content is stored directly and permanently on Bitcoin’s blockchain.
Overall, Ordinals is opening the door to activity on Bitcoin in ways that were not possible before. It is exciting to see how the protocol is evolving, and while there are some concerns about the risks that come with BRC-20 tokens, the potential for innovation is enormous. It is certainly something to keep an eye on in the world of cryptocurrency.
