Ordinals and inscriptions

Ordinals is a protocol, launched by developer Casey Rodarmor in January 2023, that assigns a serial number to each individual satoshi based on the order in which it was mined. Once sats can be told apart, data can be "inscribed" onto a specific sat by placing it in the witness part of a Bitcoin transaction. The inscribed sat can then be traded like an NFT.

Inscriptions can be images, text, audio or code, stored fully on the Bitcoin blockchain rather than linked from an external server, as many Ethereum NFTs are. Taproot's 2021 changes made larger inscriptions possible.

Ordinals triggered a heated debate. Supporters say they bring new users and fee revenue for miners as the block subsidy shrinks. Critics argue they fill blocks with non-financial data and push up fees for ordinary payments. To collect or trade inscriptions safely you need an Ordinals-aware wallet; an ordinary wallet may accidentally spend an inscribed sat as a fee.