Inscription summer: have Bitcoin ordinal inscriptions started the next bull market engine?
What are Ordinals?
The Ordinals protocol is an asset issuance protocol based on Bitcoin, introduced by Bitcoin developer Casey Rodarmor in January 2023. It essentially is a system that assigns numbers to the smallest unit of Bitcoin, the satoshi.
A satoshi is the smallest unit of Bitcoin, with 1 Bitcoin being divisible into 100,000,000 satoshis. The total supply of 21 million Bitcoins means there is a total supply of 21,000,000,000,000,000,000 satoshis. Both Bitcoin and satoshis are identical in nature, each representing a consistent value.
Just as central banks assign serial numbers to fiat currencies when they are issued, Casey proposed a numbering scheme based on the Bitcoin UTXO ledger system. According to this scheme, each satoshi is assigned a number based on the order in which it was mined. As a result, each satoshi has a corresponding ordinal number, and satoshis with ordinal numbers become unique. For example, the 100 million satoshi of the first Bitcoin mined are numbered from 1 to 10,000,000,000, so that each satoshi is unique and non-fungible. This numbering scheme is called the Ordinals Protocol.
The Ordinals protocol writes data into satoshi through a process called inscribing. The portion of data that is written is referred to as an inscription, which imbues the satoshi with uniqueness and scarcity. The Ordinals protocol achieves the numbering and annotation of the smallest unit of Bitcoin, the satoshi, making each previously homogeneous satoshi into a unique non-fungible token (NFT).
MoreWhat is an inscription?
Bitcoin Ordinal inscriptions are metadata that inscribe content into satoshi using the Ordinals protocol and, therefore, are NFTs by nature. They can take various forms, such as text, images, video, and audio, so long as they are less than 4 MB. You can view them at https://ordinals.com.
Subsequently, numerous enhanced versions of inscription protocols were introduced. One notable example is the BRC-20 protocol, which leverages a standardized JSON format to write token details, including name and total supply, directly onto satoshis. It enables the deployment, minting, and transfer of tokens, making BRC-20 a fungible token issuance protocol built on Ordinals. As a result, more improved inscription protocols based on BRC-20 emerged in the market, including ORC-20, ARC-20, Rune, and Pipe.
Inspired by Bitcoin inscriptions, other blockchains have also introduced their own inscription protocols. These include the DRC-20 protocol, which is based on Ordinals and implemented on the Dogecoin blockchain; the LRC-20 protocol, which is based on Ordinals and implemented on the Litecoin blockchain; and also Ethscriptions, an Ethereum inscription protocol that utilizes transaction calldata to create and share digital collectibles on Ethereum.
MoreCore inscription protocols
- Ordinals / BRC-20
BRC-20 is an experimental Bitcoin token standard created by @domodata on March 8, 2023, that transforms token minting into on-chain strings.
At a technical level, the BRC-20 standard leverages JSON data within Ordinal inscriptions to facilitate the deployment, minting, and transfer of token contracts, which are the three primary functions of the standard.
The most important feature of BRC-20 is its fair issuance mechanism. The symbol of BRC-20 tokens can only have 4 characters.
- Atomicals / ARC-20
The Atomicals protocol takes full advantage of Bitcoin's UTXO feature, which uses the satoshi as the unit of account. Through the Atomicals protocol, the Bitcoin network can generate both non-fungible tokens (NFTs) and fungible (in this case, ARC-20) tokens.
ARC-20 tokens are backed by 1 sat (satoshi), which means the value of each ARC-20 token will never be lower than 1 satoshi.
The Atomicals protocol eliminates the four character limit and supports a wide variety of asset classes, allowing for more diverse game play.
- Rune
Casey, the founder of Ordinals, proposed an inscription implementation called Rune for the issuance of fungible tokens (FTs). This method allows the direct insertion of token data into the UTXO script, encompassing the token's ID, output, and quantity.
Rune's implementation is very similar to that of ARC-20 in that it transfers the token directly to the Bitcoin mainnet for processing. The difference is that Rune writes the number of tokens into the script data.
Based on UTXO and easy to use, the Rune protocol is designed to address user experience issues while minimizing wasted space in the Bitcoin blockchain.
- Pipe
The PIPE protocol is an asset issuance protocol developed by Benny, inspired by the Runes protocol designed by Casey and the Ordinals-based BRC-20 standard proposed by Domo, integrating their advantages.
The PIPE protocol is less complex and more lightweight in asset issuance compared to the BRC-20 standard.
In addition to fungible tokens, the PIPE protocol also provides a complete data structure and standard for non-fungible tokens.
- Ethscriptions
Inspired by the Bitcoin Ordinals protocol, Tom Lehman launched the Ethscriptions on June 17, 2023. This new protocol utilizes transaction calldata to create and share digital collectibles on the Ethereum network.
Ethscriptions allow for the writing of non-financial and arbitrary data onto the Ethereum blockchain. As long as the file size does not exceed 96 KB, users can inscribe any type of file. Currently, users can only create NFTs in the form of images, but this may change in the future.
These inscriptions utilize Ethereum's calldata, which is cheaper and more decentralized than pure smart contract minting.
- Evm.ink
Evm.ink has migrated the protocol standards of Ethscriptions to other EVM-compatible chains, enabling these chains to also mint inscriptions and build indexes for other EVM chains.
Popular inscription protocols such as Polscription/PRC-20 on the Polygon chain and Avascriptions/ASC-20 on the Avalanche chain are all utilizing the Evm.ink standard for indexing and identification.
- SPL20
Drawing inspiration from Bitcoin's BRC-20 standard, the Solana chain inscription protocol SPL-20 distinguishes itself by enabling the direct storage of digital artwork on the blockchain.
Unlike conventional NFTs reliant on external platforms for art storage, SPL-20 inscriptions offer a unique approach, enabling images to possess their own on-chain addresses, providing increased integrity, permanence, and independence from external storage limitations.
- DRC-20 & LRC-20
The DRC-20 protocol is an Ordinals-based protocol on the Dogecoin blockchain. It functions similarly to the Bitcoin blockchain but has gained popularity due to its low transaction fees and strong memetic qualities.
LRC-20 is an Ordinals-based protocol on the Litecoin blockchain.
Market data of core inscription protocols
The market table for core inscription protocols is based on data as of December 25, 2023. It includes the data for inscription tokens of eight protocols: Ordinals/BRC-20, Ethscription/ERC-20, Atomicals/ARC-20, Rune, Pipe, Avascriptions/ASC-20, SPL-20, and DRC-20. Data for inscription tokens on the Polygon chain is currently unavailable and has not been included.
As of December 25, 2023, the total number of Bitcoin Ordinals inscriptions has exceeded 50 million, with BRC-20 inscriptions accounting for over 40 million, representing more than 80% of the total.
Special note: The Token Quantity field includes two data points. The first represents the quantity of tokens with real trading volume, while the second represents the total quantity of tokens deployed. The Total Market Cap field represents the total market capitalization of tokens with real trading volume.
Core inscription protocols — top tokens
The number of inscription tokens for each protocol is significant, but the trading volume is primarily concentrated in a few top inscription tokens. The following table showcases the market performance of the top tokens for each inscription protocol.
The top tokens for the BRC-20 protocol are $ORDI, $SATS, and $MUBI. The top inscription token for the ARC-20 protocol is $ATOM. The top inscription token for the Rune protocol is $COOK. The top inscription token for the PIPE protocol is $PIPE. The top inscription token for the ERC-20 protocol is $ETHS. The top inscription token for the PRC-20 protocol is $POLS. The top inscription token for the ASC-20 protocol is $AVAV. The top inscription token for the SPL-20 protocol is $SOLS. The top token for the DRC-20 protocol is $DOGI.
Can I purchase inscription tokens on CEXes?
How to inscribe BRC-20 tokens?
You can inscribe various types of Bitcoin inscriptions, including Bitcoin NFTs, BRC-20, and more, at web3.bitget.com, unisat.io/inscribe, ordinalswallet.com/inscribe, idclub.io/brc20, or looksordinal.com. The process for inscribing BRC-20 inscriptions is as follows:
1. Buy BTC and deposit the acquired BTC in your Bitcoin Wallet.
2. Open the inscription feature module of these platforms in your browser and select BRC-20.
3. You can click the search icon and select BRC-20 to view a list of Bitcoin-based inscription tokens.
4. Select an inscription token currently being distributed and participate in the minting process.
5. Select how many times you want to mint this token inscription. With each minting, you will receive a specific number of tokens. For example, minting 5 times will grant you five times that specific number of tokens.
6. Enter the gas fee amount. Keep in mind that a higher gas fee will result in a faster transaction processing time.
7. Minting is complete. You can now view the inscribed tokens in the My Inscription section on the Profile page of these minting platforms or all the inscription tokens on your Bitget Wallet.
How to inscribe Ethscriptions?
You can deploy and inscribe Ethscriptions on the web3.bitget.com, etch.market, or ethsmarket.xyz platforms.
The process for deploying (i.e., issuing) Ethscriptions is as follows:
Step 1: Purchase and deposit ETH into your Bitget wallet or any other Ethereum wallet.
Step 2: Open the inscription feature module of these platforms in your browser and use the Deploy button to initiate the token deployment process. This will trigger the ERC-20 Deploy pop-up dialog box.
Step 3: Make sure you understand the meanings of the four fields in the ERC-20 Deploy pop-up for token deployment. The Protocol field refers to the asset issuance protocol. The Tick field is used to name the upcoming token. The Total Supply field is used to set the total supply of the upcoming token. The Limit Per Mint field is used to determine the number of tokens included in each individual inscription to be inscribed by a user.
Step 4: In the Tick box, enter a few English letters to name the upcoming token. In the Total Supply box, enter the planned total supply of the token. In the Limit Per Mint box, enter the number of tokens to be included in each inscription when minting.
Step 5: Use the Deploy button to initiate the deployment process. If the Tick you have entered is available, it will activate the Bitget wallet. If the Tick you entered is already in use, an error alert will appear, prompting you to choose a different Tick. After changing the Tick, use the Inscribe button again to activate the Bitget wallet.
Step 6: If the Bitget wallet is activated, use the Confirm button to confirm the signature. At this point, you have completed the deployment (or issuance) of an Ethscription. You can then view your issued tokens in the In-Progress token list.
The process for inscribing Ethscriptions is as follows:
Step 1: Go to the In-Progress list of the platform tokens, which displays the tokens that are deployed but not yet inscribed.
Step 2: Select your desired token and click to access its detailed page, where you can find more basic information. The key information includes Total Supply, Limit Per Mint (the number of tokens included in a single inscription when minting), Ethscription ID, and Holders.
Step 3: Next, click on Ethscribe to activate the Bitget wallet. Click the Confirm button to confirm the signature. At this point, you have completed the inscription of an Ethscription. You can then view the inscribed token in the My Ethscriptions section of your profile.
Common inscription tools
Commonly used inscription tools mainly include inscription trading platforms, inscription minting platforms, inscription explorers that allow for tracing inscriptions, and data analysis platforms that allow you to query inscription quotes.
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The history of inscriptions
- 2023.01.21The release of the Bitcoin ordinals protocol by Bitcoin developer Casey Rodarmor has introduced a new paradigm within the Bitcoin ecosystem. This protocol facilitates the direct creation and storage of Bitcoin NFTs on the Bitcoin network, enabling users to record various types of metadata (such as images, videos, and PDFs) onto satoshis, thus giving rise to the first Bitcoin network NFTs.
- 2023.03.08X (formerly Twitter) user @domodata posts the BRC-20 standard on gitbook and calls it as an "interesting and experimental standard." Created based on the Ordinals protocol, the BRC-20 standard allows for the deployment, minting, and transfer of tokens by setting inscriptions in JSON format. @domodata also deploys the first BRC-20 token, $ORDI. On March 9, 2023, the minting of $ORDI is completed and $ORDI begins active trading on OTC markets.
- 2023.04The BRC-20 standard gains significant attention in April 2023, leading to a sharp increase in the number of BRC-20 tokens and a surge in transaction fees on the Bitcoin blockchain. The price of BRC-20 tokens also experienced a substantial rise. The first token in the BRC-20 standard, $ORDI, started at $0.005 and eventually reached $31 on May 8, 2023, marking a 6200-fold increase from its initial price to a market cap of $650 million. On April 23, 2023, Unisat, the first Bitcoin wallet to support the BRC-20 token standard, went live. Since then, inscription infrastructure and applications such as wallets, explorers, trading platforms, minting platforms, and data platforms have also been introduced.
- 2023.05On May 2, 2023, the Litecoin community launches a fork of the BRC-20 standard called LTC-20. On May 9, 2023, Dogewow, a Dogecoin community, releases DRC-20. On May 27, 2023, Dogcoin reaches over 2 million transactions processed in a single day, at one point surpassing both BTC and ETH. This success led to the launch of inscriptions on various public chains, including Binance Smart Chain, Polygon Chain, Arbitrum Chain, Avalanche Chain, BASE Chain, Celestia Chain, Cosmos Chain, and others, along with their respective secondary markets.
- 2023.06.12Raph, the lead maintainer of Bitcoin Ordinals, merges Casey Rodarmor's recursive inscription proposal (#2167), into the Ordinals code on GitHub.
- 2023.06.17Inspired by the Bitcoin Ordinals protocol, Tom Lehman, co-founder and former CEO of the music website Genius.com, launches Ethscriptions on June 17, 2023. The new protocol utilizes transaction calldata to create and share digital collectibles on the Ethereum network. On September 8, 2023, Ethscriptions officially announces $ETHS as their official token.
- 2023.09.20The Atomicals protocol is launched by an anonymous developer. In the early hours of September 21, the first token on the Atomicals protocol (ATOM) was issued and mining was completed in about 5 hours.
- 2023.09.26Casey Rodarmor creates a Bitcoin-based fungible token protocol called Runes (Rune Protocol). The key improvement of Runes over BRC-20 is the use of UTXO-based technology.
- 2023.10.02Beny, a community developer, launches an enhanced version of Runes known as Pipe. Previously, he also launched tools such as BRC-20 proxy LooksOrdinal (non-tokenized) and Tap Protocol, an OrdFi-oriented version of BRC-20.
- 2023.10.25The Layer 1 Foundation, founded by BRC-20 developer @domodata, introduces BRC-100 as a scalable decentralized computing protocol based on ordinal theory, designed specifically for DeFi, SocialFi, GameFi, and other decentralized applications built directly on Bitcoin Layer 1. An evolution from the BRC-20 standard, BRC-100 enables further scalability and improvements, thus creating possibilities for applications based on Bitcoin Layer 1.
- 2023.12.06The price of $ORDI once again skyrockets, reaching a peak of nearly $70, reigniting the market's attention towards inscription tokens. As a result, numerous inscription tokens experienced a surge in value, and the frenzy surrounding inscriptions spread across various public blockchain ecosystems.
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