What Are Bitcoin Ordinals? Why Are NFTs on Bitcoin?
Heard that Bitcoin can now do NFTs but have no idea what it's all about? Wondering what the difference is between Ordinals and Ethereum NFTs? Want to understand the current state and controversies of this sector in 2026? After reading this, you'll understand what Ordinals are, why they can run on Bitcoin, and how they've developed so far.
First, a question: Since Bitcoin was born in 2009, what else can it do besides "sending transactions"?
Before 2023, the answer was basically "nothing else." Bitcoin was designed as peer-to-peer electronic cash—simple, secure, with a single function. But in January 2023, a developer named Casey Rodarmor created something that suddenly allowed Bitcoin to do NFTs.
That thing is Ordinals.
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Simply put, Ordinals is a system for numbering Bitcoin's smallest unit, the "satoshi," and then allows you to "inscribe" images, text, or even code onto a specific satoshi. One Bitcoin equals 100 million satoshis. Ordinals assigns a unique serial number to each satoshi, from 0 to about 2100 trillion. With this numbering, you can track where a specific satoshi is and who owns it. Then, by inscribing something onto that satoshi—an image, a piece of text—it becomes a unique digital collectible.
This doesn't change Bitcoin's own rules; it operates entirely on the Bitcoin network. So it's not a new coin created from a "fork," but a native way to use Bitcoin.
How Inscriptions Are "Carved" On
The term "Inscription" is very vivid—like carving words into a stone; once carved, it can't be erased.
On a technical level, Ordinals utilizes two Bitcoin upgrades. The 2017 SegWit (Segregated Witness) moved signature data into a separate area called "witness data." The 2021 Taproot upgrade made it much cheaper to stuff large amounts of data into this area. Without Taproot, the cost of inscribing an image onto Bitcoin would be too high for anyone to bother. With Taproot, it became practical.
In practice, you use specific tools to initiate an "inscribe" operation, embedding the data into a transaction. Miners then package it into a block for permanent storage. This data is written directly onto the Bitcoin blockchain, independent of any external storage. This means that as long as the Bitcoin network exists, the inscription will always be there.
What's the Real Difference Between Ordinals and Ethereum NFTs?
Many people call Ordinals "NFTs on Bitcoin," but the underlying logic is completely different.
| Comparison Dimension | Ordinals (Bitcoin Inscriptions) | Traditional NFTs (Ethereum, etc.) |
| Data Storage | Complete data written directly on-chain | Only a pointer stored on-chain; actual content usually off-chain |
| Asset Model | Based on UTXO (Unspent Transaction Output) | Based on smart contracts and account model |
| Modifiability | Cannot be changed once inscribed | Metadata can be updated via contracts |
| Dependence on External Systems | Independent | Depends on off-chain storage like IPFS |
| Functional Complexity | Relatively simple, focuses on "data as asset" | Programmable, supports complex interactions |
The core difference in one sentence: Ordinals inscribes complete data directly on-chain. Traditional NFTs only store an address on-chain (pointing to IPFS or some server), with the actual content off-chain.
What does this mean? Ordinals inscriptions are truly immutable—as long as the Bitcoin network exists, the content exists. If the server storing the image for a traditional NFT goes down, you might be left with just a "token pointing to an empty address."
Conversely, Ordinals sacrifices flexibility. Once inscribed, it can't be changed, nor can it perform complex interactions with DeFi protocols like Ethereum NFTs can. Each has its trade-offs.
Ordinals in 2026: What the Data Says
Ordinals has been running for several years since its appearance in January 2023. Here's the data for 2026:
Number of Inscriptions: As of mid-January 2026, inscriptions on the Bitcoin blockchain have exceeded 117 million. It was 75 million in September 2024 and surpassed 100 million in November 2025. The growth rate is quite significant.
NFT Sales: NFT sales on Bitcoin have approached $6 billion, ranking third among all blockchains.
Market Cap: As of May 2026, the total market cap of Ordinals-related assets is approximately $115 million. While down from the peak period of 2023-2024, enterprise use cases are growing, including legal document notarization and contract settlement.
Network Activity: According to CryptoQuant data, Bitcoin's daily transaction count has exceeded 800,000, near all-time highs. Micro-transactions under 0.01 BTC currently account for about 80% of daily network activity, compared to just 44% in 2023. Ordinals inscriptions, Runes tokens, and BRC-20 assets are the main drivers of this growth.
Interestingly, despite such active on-chain activity, Bitcoin's price remains under pressure around $64,000. There's a clear divergence between network usage and price trends.
Controversy: A War Over "What Bitcoin Should Be Used For"
Not everyone likes Ordinals. In fact, it has sparked a debate within the Bitcoin community comparable to the 2017 "Blocksize War."
The focus of the debate is a proposal called BIP-110. This proposal aims to draw a red line on the amount of data that can be stuffed into a Bitcoin block, essentially limiting protocols like Ordinals and Runes from inscribing images, videos, or even code onto the chain.
Supporters argue this isn't stifling innovation but restoring Bitcoin's early "technical prudence." They believe Bitcoin should stick to being a payment and store of value system, not be filled with "data garbage."
Opponents argue this undermines Bitcoin's neutrality. They point out that Ordinals and Runes have generated over $500 million in transaction fees for miners, strengthening network security—as Bitcoin's block reward halves every four years, network security increasingly relies on transaction fees rather than newly mined coins.
This debate has spread from the tech community to miners, institutions, and community leaders. BIP-110 is scheduled for a signaling vote around August 2026. If passed, Ordinals' living space on Bitcoin could be restricted.
How Beginners Can Participate in Ordinals
If you want to try after reading the above, the process is roughly:
- 1. Prepare a Bitcoin wallet that supports Taproot, with an address usually starting with "bc1p".
- 2. Transfer a small amount of BTC into the wallet to pay for network fees.
- 3. Choose the content you want to inscribe—images, text, code are all fine.
- 4. Initiate the inscribe operation through an inscription tool (like Ordinals Wallet or UniSat).
- 5. Wait for the transaction to be confirmed, and your inscription will exist permanently on the Bitcoin blockchain.
Of course, if you don't want to inscribe yourself, you can directly buy already-inscribed ones on marketplaces that support Ordinals (like Ordinals Wallet, Magic Eden, etc.).
A word of caution for beginners: Inscribing requires paying Bitcoin network fees, which fluctuate with network congestion. It can be expensive during peak times. Additionally, the liquidity of the current Ordinals ecosystem is far lower than that of Ethereum NFTs, making it potentially hard to sell.
The emergence of Ordinals essentially transforms Bitcoin from a "send-only" network into a computer that "can store things." This change is welcomed by some and opposed by others, but regardless of your view, it has happened—117 million inscriptions and $6 billion in sales are numbers that speak for themselves.
Whether it's a "pollution" or an "upgrade" for Bitcoin will probably take a few more years to become clear. But as a crypto participant, understanding what it is, why it exists, and where the controversies lie is worth the time to figure out.
If this article helped clarify the ins and outs of Ordinals, feel free to use my referral link to register on a trading platform and support continued creation:
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FAQ
Q: What is the relationship between Ordinals and BRC-20?
BRC-20 is a token standard created based on the Ordinals protocol. Ordinals is the underlying protocol, while BRC-20 is a "fungible token" standard built on top of it—similar to how Ethereum's ERC-20 is built on the Ethereum network.
Q: Will Ordinals congest the Bitcoin network?
It already has. Ordinals has brought a large number of micro-transactions, pushing Bitcoin's daily transaction volume to over 800,000. Fees rise during network congestion, which is a core reason for the BIP-110 controversy.
Q: Are Ordinals inscriptions truly immutable forever?
Yes. The data is written directly into Bitcoin blocks. As long as the Bitcoin network exists, the inscription exists. No one can modify data that has already been written into a block.
Q: What is the difference between Ordinals and Runes?
Runes is another protocol launched by Casey Rodarmor after Ordinals, specifically designed to create fungible tokens on Bitcoin. Ordinals is better suited for NFTs (non-fungible), while Runes is better for tokens similar to ERC-20.
Q: Is it too late to buy Ordinals now?
This question can't be answered with investment advice. Suffice it to say, the Ordinals ecosystem has gone through a process from frenzy to cooling down since 2023. If you want to participate, it's recommended to spend time researching first, test the waters with a small amount of capital, and don't rush in impulsively just because the "concept is new."
