What Are Bitcoin NFTs? Understanding the Ordinals Protocol

Metaverse Planet August 8, 2025Last Updated: October 31, 2025

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The Bitcoin Ordinals protocol is rapidly gaining traction, with inscriptions exceeding fourteen million at the time of writing. Keep reading to learn how this new protocol makes it possible to mint non-fungible tokens (NFTs) directly onto the Bitcoin blockchain.

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Key Takeaways

A Bitcoin miner received a block reward on his own $180,000!

Bitcoin NFTs have seen a significant rise in popularity since the launch of the Ordinals protocol in January 2023.
Ordinals enables the minting of NFTs directly on the Bitcoin blockchain.
The goal of Ordinal theory is to give each satoshi a unique identity, allowing them to be tracked, transferred, and imbued with individual meaning through inscriptions.
This makes one satoshi different from another and therefore, non-fungible.
The main advantage of Ordinals NFTs over NFTs on other blockchains is that Ordinals NFTs reside directly on the Bitcoin blockchain.

Why We Need Ordinals: A Brief History of NFTs on Bitcoin

Traditionally, minting NFTs on Bitcoin has been more challenging compared to other blockchains like Ethereum. This is due to the limited smart contract functionality on Bitcoin, as well as the lack of an NFT token standard similar to Ethereum’s ERC-721.

The history of Bitcoin NFTs dates back to 2012 with the launch of the Colored Coins protocol. Colored Coins were bitcoins with a special marker that distinguished them from standard bitcoins. They are considered the first step toward building NFTs on the Bitcoin network.

Bitcoin NFTs recently regained interest with the launch of the Ordinals protocol in January 2023, which made it possible to mint NFTs directly onto the Bitcoin blockchain.

What Is the Bitcoin Ordinals Protocol?

Because of their innovative nature, Bitcoin Ordinals NFTs involve several technical terms. To better understand how the Ordinals protocol works, let’s start with a brief explanation of the terminology.

Bitcoin Ordinals NFTs are based on Ordinal theory and the Ordinals protocol, developed by Casey Rodarmor. The goal of Ordinal theory is to give each satoshi (the smallest unit of Bitcoin) an individual identity, allowing it to be tracked, transferred, and inscribed with unique meaning. This makes one satoshi different from another, and therefore, non-fungible.

The core ideas of Ordinal theory and the Ordinals protocol include:

The Ordinals protocol assigns a sequential number to each satoshi. To be precise, each satoshi is numbered in the order in which it was mined (e.g., the first satoshi ever minted is number one).
Next, each satoshi can be inscribed with data, such as images, text, or videos, through a Bitcoin transaction. The size of the inscription can be up to 4MB.
Once the transaction is mined, the recorded data is a permanent part of the Bitcoin blockchain. It can also be viewed through Ordinals-enabled Bitcoin wallets and online Ordinals viewers. For example, a CryptoPunk image from the Ordinals web site can be viewed.

In short, each satoshi’s token ID is its sequential number, while an Ordinals NFT’s metadata is its inscription, which is held within a transaction’s witness data.

The primary advantage of Ordinals NFTs compared to NFTs on other blockchains is that all metadata resides on the Bitcoin blockchain itself. In other words, Ordinals NFTs exist directly on the Bitcoin blockchain, not on a separate layer. This is seen by many as providing a higher level of immutability. In contrast, for many NFT collections on other blockchains, the actual image file of the art is typically stored off-chain, and the metadata only contains a link to the image file. This means the artwork could potentially be altered by third parties if not stored on the blockchain.

Other Developments in Bitcoin NFTs

Bitcoin Stamps (Securely Timed and Protected Art) is another recent protocol that offers a different method for embedding image data into Bitcoin compared to the Ordinals protocol.

Bitcoin Stamps NFTs are similar to ERC-1155 semi-fungible tokens or digital collectibles, but instead of witness data like Ordinals, they are stored in Bitcoin’s unspent transaction outputs (UTXOs). UTXOs are records of unspent bitcoins resulting from transactions between two addresses. The way the Bitcoin Stamps protocol stores metadata makes it impossible for a full node to prune (i.e., remove the data), which helps to ensure the data is preserved immutably.

Ordinals vs. Bitcoin Stamps

	Ordinals	Stamps
Pros	Stores image data within prunable transaction witness data, resulting in a lower cost to mint NFTs compared to Stamps (which stores data in many different UTXOs).	Image data cannot be pruned from a full node since it is stored in many different UTXOs. This helps to ensure the data is immutably preserved.
		Stamp NFTs are considered “semi-fungible” since they can be issued as “1 of 1” or “1 of many” digital assets. This makes them similar to the Ethereum ERC-1155 multi-token standard.
Cons	NFT data can potentially be pruned by individual node runners, which limits the immutability and decentralized benefits of NFTs.	Higher costs due to storing data on all Bitcoin nodes. The creator of the Stamps protocol recommends limiting image resolution and size to lightweight 24×24 pixel, 8-bit color depth PNG or GIF files.

In addition to protocols like Bitcoin Ordinals and Bitcoin Stamps that are built directly on the base layer, Bitcoin NFTs can also be created on Bitcoin Layer-2s, which enable the execution of smart contracts and the finalization of transactions. This makes the creation and modification of Bitcoin NFTs more cost-effective, sustainable, and scalable. Examples of Bitcoin Layer-2s that support smart contracts and NFTs include Stacks, Rootstock, and the Liquid Network.

What Are Some Popular Bitcoin NFT Projects?

Some currently popular Bitcoin Ordinals NFT projects are based on their Ethereum counterparts. For example, Ordinal Punks and Bitcoin Punks are based on CryptoPunks.

Ordinal Punks

The Ordinal Punks collection consists of 100 unique PFPs (profile pictures) that were created entirely on-chain on the Bitcoin blockchain during the first 650 inscriptions. Ordinal Punks uses an open-source algorithm to generate the 192×192 pixel PFPs.

TwelveFold

Even major NFT brands are joining the Ordinals movement. Yuga Labs, the company behind the top Ethereum-based NFT collection Bored Ape Yacht Club, recently launched its first Bitcoin Ordinals NFT collection, named TwelveFold. It consists of 300 unique generative art pieces inscribed onto satoshis on the Bitcoin blockchain.

Domain Name Projects

Other notable Bitcoin-based NFT projects include Bitcoin domain names. These aim to provide similar functionality to Ethereum domain names, such as the Ethereum Name Service (ENS). Stacks is a Bitcoin Layer-2 solution that provides a .BTC domain name as a decentralized web identity and a human-readable wallet address.

Ordinals and the BRC-20 Token Standard

The BRC-20 token standard is an experimental fungible token standard for the Bitcoin blockchain. It was created in March 2023 by an anonymous on-chain analyst named “domo.” Inspired by Ethereum’s ERC-20, BRC-20 tokens allow developers to create and transfer fungible tokens using the Ordinals protocol. However, unlike ERC-20, BRC-20 tokens do not leverage smart contracts.

The BRC-20 token standard uses Ordinals inscriptions of JSON data to deploy, mint, and transfer tokens. Currently, over 34,000 BRC-20 tokens have been minted, including the first BRC-20 token, ORDI.

Conclusion

Bitcoin NFTs have seen a significant increase in popularity since the launch of the Ordinals protocol in January 2023, which made it possible to mint NFTs directly onto the Bitcoin blockchain.

Bitcoin Ordinals NFTs are based on Ordinal theory, which aims to give each satoshi a unique identity, allowing them to be tracked, transferred, and imbued with individual meaning through inscriptions. This makes one satoshi different from another, and therefore, non-fungible. Other notable developments in Bitcoin NFTs include the Stamps protocol and Bitcoin domain names.