ORDI, A Game of Attention

• Ordinals has opened the rise of the Bitcoin ecosystem, paving the way for solving the Bitcoin security budget problem. The main criticism that Ordinals leads to the expansion of the Bitcoin node size, which in turn affects the decentralization, is untenable.
• ORDI is a useless token with no utility and no function. If serious project tokens need to capture value and attract investors through value creation, then what meme tokens need to capture is attention.
• The concept of "meaning" is subjective and bestowed by human beings. In comparison to many memes such as Pepe, HarryPotterObamaSonic10Inu, ORDI holds the potential for deeper and higher-quality "meaning."
• ORDI belongs to the first-class meme, but it also faces the challenge of how to capture attention continuously.

What are Bitcoin Ordinals and BRC-20?

In December 2022, Bitcoin developer Casey Rodarmor released an open-source software called ORD that runs on top of Bitcoin Core software. ORD allows users to mint Bitcoin Ordinals in two steps: 1) write arbitrary data such as a piece of text or an image onto the Bitcoin blockchain (the "inscription"), 2) associate the uploaded inscription with a specific satoshi. A satoshi is the smallest unit of a Bitcoin. 1 BTC = 100,000,000 satoshis. The final product is a satoshi with an inscription, hence the name Bitcoin Ordinals.

Understanding： What are Ordinals?

Bitcoin Ordinals can be divided into two categories based on the type of data inscribed: text or image. Text-based inscriptions are primarily used to create tokens, such as the BRC-20 token standard. Image-based inscriptions, on the other hand, are used to create NFTs, such as various cartoon avatars.

It's important to note that while both inscription-based NFTs and BRC-20 tokens are stored entirely on the Bitcoin blockchain, the link between an inscription and a specific satoshi is established by the Ordinals theory. Each Bitcoin consists of 100 million satoshis, but these satoshis are indistinguishable from each other. Ordinals, as an off-chain numbering scheme, assigns a unique identity to each satoshi. In other words, the existence of Ordinals relies on the community's consensus and acceptance of the Ordinals theory. Without the Ordinals theory, inscriptions cannot be tracked or traded because they do not inherently point to a specific satoshi. From the blockchain's perspective, every satoshi is the same.

So, what is ORDI?

ORDI is the first BRC-20 token issued on the Bitcoin blockchain, with a total supply of 21,000,000. ORDI was created purely as an experiment to test the possibility of deploying a fungible token similar to Ethereum's ERC20 on Bitcoin using the Ordinals theory.

Unlike Ethereum's ERC-20 token standard, Bitcoin does not support smart contracts. BRC-20 is not a smart contract token standard; there is no technology behind the token, no project team, no real-world project backing it, and no use case. BRC-20 tokens only leverage the Ordinals theory to achieve basic token functionalities on the Bitcoin network, such as token issuance, setting a supply cap, and making transfers. The price of ORDI solely depends on community consensus and market sentiment.

ORDI is a pure meme, so evaluating its worthiness shifts from whether it's a good project to whether it's a good meme. ORDI's existence is built upon the Ordinals theory, so before discussing ORDI, let's take a look at what the Ordinals protocol means for Bitcoin.

Ordinals: Paving the Way for Bitcoin's Security Budget

Some people hold a critical attitude towards the Ordinals protocol, believing that a large amount of inscription information written into the blockchain will increase the network transaction fee, affecting ordinary users. Furthermore, the rapid expansion of transaction data could enlarge the hard disk size of blockchain nodes, thereby elevating the hardware prerequisites for operating Bitcoin nodes. This, in turn, might influence the number of operational full nodes, posing a challenge to decentralization.

However, many institutions have suggested that the Ordinals protocol has a net positive impact on Bitcoin network security and miner revenue.

First, the emergence of the Ordinals protocol has increased the transaction fees received by Bitcoin miners. Notably, the Bitcoin network has witnessed three significant spikes in transaction fees in March, May, and November of this year, coinciding with three waves of Ordinals-related hype. According to estimates from research firm K33, miners' daily revenue in 2023 is 973 BTC, higher than the previously estimated 900 BTC per day. The additional transaction fees brought by Ordinals have increased miner revenue by approximately 8%.

Transaction fee revenue is clearly driven by Ordinals

Transaction fee revenue is of vital importance, filling the security budget of the Bitcoin network after the continuous reduction of BTC block rewards in the future.

Miners are an important part of maintaining the security of the Bitcoin network. At present, miners mainly rely on the BTC block reward after each block is mined as income, but Bitcoin's block reward is halved about every four years. Less block rewards lead to lower miner revenue, which can lead to miner exits and reduced hash power to protect the network. This is not an imminent problem, but it is a serious problem for the long-term development of Bitcoin.

Secondly, the increase in miner revenue will attract more miners to join, expanding Bitcoin's overall hash power and security. More hash power means that attackers need to invest more resources to obtain 51% of hash power to launch an attack.

Is the main criticism of Ordinals, that it increases the hard drive space required to run a node, a real problem?

In the world of Bitcoin, miners use computing power to mine new blocks, nodes that run the Bitcoin client (e.g., Bitcoin Core) are responsible for verifying the validity of blocks, and developers maintain the client. Miners, node operators, and developers form a complex game-theoretic relationship in which no one party has control over the Bitcoin network. If you want to gain a deeper understanding of the game-theoretic relationships between different parties in the Bitcoin network, I recommend this book: "The Blocksize War: The Battle over who controls Bitcoin's protocol rules".

Therefore, some people are worried that the rapid growth of ordinals will lead to an increase in the size of the Bitcoin blockchain, higher hardware requirements for running the Bitcoin client, a decrease in the number of nodes, and a decrease in decentralization, which will affect the delicate balance between miners, nodes, and developers.

Although this is a very reasonable concern, the current Bitcoin client, such as Bitcoin Core, is only about 500GB in size. Assuming that every block is filled full after Ordinals, the size of the Bitcoin blockchain will increase by about 1TB every four years (Source). At a time when hard drive space of over 1TB, or even 2TB, is quite common, it seems premature to worry about the size of the Bitcoin blockchain. Moreover, with technological advancements, the amount of hard drive space that ordinary users can afford is also rapidly increasing.

ORDI – A Powerful Meme

The term "meme" was first introduced by British evolutionary biologist Richard Dawkins in his 1976 book The Selfish Gene. Similar to genes, memes are the smallest units of culture and information that can be transmitted and evolved among individuals. The value and popularity of meme tokens depend on their virality and community engagement.

Meme tokens may seem to lack practical utility, but they fulfill a genuine and substantial demand in the cryptocurrency market: a speculative asset with abundant imagination and fairness.

Not every meme token is imbued with boundless imagination, nor does every meme provide speculators with an equal opportunity to participate in the game.

Many opinions praise the Fair Launch of BRC-20 and claim it is better than VC projects. I believe this comparison is unreasonable. Venture capitalists (VCs) typically invest in projects during their early stages, providing funding to support the development team. VCs assume substantial uncertainties regarding whether the product can be successfully launched and embraced by the market in the future. Given these uncertainties, VCs bear significant risks and aim to acquire the cheapest tokens to maximize profits should the project succeed.

On the contrary, memes have no products, no technology development, and no upfront investment. Therefore, a good meme should not have investors or the team holding a large number of tokens. This seems like a natural requirement, but the reality is not the case. The meme token Pepe, which was once popular at the beginning of the year, was exposed in August this year that team members stole a large number of tokens and dumped them.

Tokeninsight News

The Fair Launch mechanism of BRC-20 tokens ensures that participants can only obtain tokens through minting. There is no early investment, and the project team does not hold a large number of tokens. At the same time, since BRC-20 is not a smart contract token, the functions that can be achieved are limited, so there is no risk of smart contracts, such as the project team stealing or the contract being blacklisted. These features make BRC-20 tokens a natural speculative asset.

The Meaning and Imagination of Memes

The value and popularity of meme coins depend on their virality and community engagement. Virality means capturing the attention of enough people. If serious project tokens need to capture value and attract investors through value, then meme tokens need to capture attention.

For example, after the collapse of Terra, various meme coins about its CEO emerged. Among them, JAIL KWON even surged once because Do Kwon was arrested; this year, a laboratory in South Korea claimed to have developed a room temperature superconductor LK-99, and the price of the related meme coin LK99 in the cryptocurrency market has experienced multiple rounds of ups and downs.

It costs nothing to create a new meme coin, and each meme coin faces endless competition from other meme coins. Some competitors use simple and crude means to capture attention, such as naming them HarryPotterObamaSonic10Inu and naming the token ticker as BITCOIN.

HarryPotterObamaSonic10Inu

So what is ORDI's narrative, and what kind of attention can it capture? ORDI is the first BRC-20 token deployed using the Ordinals protocol. ORDI is the first BRC-20 token with a market capitalization exceeding $1 billion. ORDI represents the Ordinals protocol, the Ordinals protocol represents the evolution of Bitcoin, solves the security budget problem of Bitcoin, opens up the development of the Bitcoin ecosystem, makes Bitcoin fun, and allows more people to enter the Bitcoin ecosystem.

"Meaning" is given by human beings. Compared with meme coins like Pepe, HarryPotterObamaSonic10Inu, ORDI holds the potential for deeper and higher-quality "meaning". Therefore, ORDI belongs to the first-class meme. It can be benchmarked against other first-class memes: Dogecoin, with a market capitalization of $13 billion. SHIBA Inu, with a market capitalization of $5.7 billion.

ORDI's Biggest Challenge: Continuously Capturing Attention

Of course, this is a meme, and it costs nothing to create a meme. ORDI faces the challenge of memes that are more culturally contagious and can be given more "meaning". Here we have to mention another BRC-20 token, SATS.

Each Bitcoin can be divided into 100 million satoshis (sats). This BRC-20 token named SATS sets the total amount to 2,100 trillion, corresponding to the maximum number of 2,100 trillion satoshis in the Bitcoin network. SATS was listed on Binance on December 12, pumping its market value close to $1 billion.

There will definitely be a meme coin in the Bitcoin ecosystem that can be benchmarked against Doge and has a market value of over 10 billion US dollars. Will it be ORDI or STAS? No one can predict. Projects with real utility require the project team to continue building and creating value; a meme requires holders and the community to constantly speak up on social platforms, wave the flag, and create attention for the memes they hold.

This is the correct way to play the meme game.