Understanding what BTCNFT is and its future potential in one article

Disclaimer: This article aims to convey more market information and does not constitute any investment advice. The article only represents the author's viewpoint and does not represent the official stance of MarsBit

Disclaimer: This article aims to convey more market information and does not constitute any investment advice. The article only represents the author's viewpoint and does not represent the official stance of MarsBit.

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Source: veDAO Research Institute

After the Spring Festival, the biggest source of hot topics in the Web3 industry is not the strong rise of L2 newcomer Arbitrum, nor is it the open and secret struggle between the two new flagship public chains Aptos and Sui. Instead, it is BTC from Web3 living fossils. Since the launch of the Ordinals protocol on December 14th last year, as of March 6th, over 300000 NFTs have been cast, and the first 10K collection, BitcoinPunks, to be cast free of charge using Ordinals, was sold out in less than a day. In the past, it was almost unimaginable that BTC had always been synonymous with being slow and expensive.

Apart from being concerned about the price trend of Bitcoin, people will not pay more attention to it. So much so that Bitcoin is mocked as: "The greatest value of a vintage car made of pure gold is exhibited in museums

But now, BTC has undoubtedly ushered in its second spring. According to Dune, Bitcoin NFT reached its peak in February this year:

Link:
https://dune.com/dgtl_assets/bitcoin-ordinals-analysis

Perhaps even now, many people are still confused about the concepts of "Bitcoin Ecological Prosperity" and "Bitcoin Out of NFT". Next, we will explain to everyone one by one:

What is BTCNFT

If we use one sentence to describe it: BTCNFT is an NFT product released based on the BTC ecosystem. It sounds like it's no different from ETHNFTPolygonNFT.

But in fact, the issuance of NFTs on the BTC chain is defined based on the minimum measurement unit Sats (Cong) of the BTC network. Firstly, we need to understand what Sats is: the name of Bitcoin in the 8th decimal place, with a ratio of 100 million to 1 to BTC. Sats is named in honor of Satoshi's great invention. So how is Sats used to distribute NFTs on the BTC network? I have to mention a protocol here: Ordinals.

Link:https://ordinals.com/

Ordinals is an NFT protocol based on BTC networks, designed to assign unique identities to each satoshis (sat). By using the Order software, this protocol adds data to these Sats and allows software users to track them based on an ordinal number system. In other words, the Ordinal protocol presents Bitcoin's smallest unit, Sats, in the form of NFT, and endows Sats with justifiable transaction and collectible value. When the smallest unit becomes the new target for speculation, to some extent, it also counts as an expansion of the Bitcoin.

Since the birth of the Ordinals protocol, users have been able to engrave information on the Bitcoin chain, including text/images/audio/video, thus creating NFTs on the Bitcoin chain.

It's like engraving your name and image on a dime coin, and this dime coin becomes a Non FungibleToken. For example, this number is
Dd082adcb3aaab2882185e3a2f927bbff53cf6ffe8ab472d57740ea9f95c0acdai0 has the following characteristics: the time when this Sats was excavated, percentile, name, the block where it was excavated, scarcity, and so on. At the same time, this Satoshi is also engraved with a visual jpg, and based on these features, you can easily find it. This Sats is also known as Insertion338381, which means it is the engraved inscription number 338381.

What is the difference compared to smart contracts?

Through the previous text, we have gained an understanding of the origin of BTCNFT. So, how is it different from conventional ETHNFTs on the market? Firstly, we need to clarify the definition of smart contract NFT.

Definition of smart contract NFT:

• SmartContractNFT: How to achieve uniqueness; Inseparability: A TokenID composed of integers is mapped to a URL containing NFT metadata (name, description, image address), and the contract is used as the collection boundary. Therefore, a specific NFT can be retrieved layer by layer through the contract address TokenID metadata.

  • Collection: Use 721 or 1155 protocol contracts to distribute and transfer NFTCollection.

  • Metadata: Usually stored in IFPS or centralized servers, the smart contract in the Collection has metadata properties, and the metadata is set to point to a URL storage address

  • Trading: Authorize NFT transfer permissions to trading contracts through Marketplace trading contracts

• That is to say, an NFT should have at least four elements: uniqueness, indivisibility, transferability, and descriptability. Let's take a look at how BTCNFT is implemented?

BTCNFT

• Uniqueness: Ordinals ordinal theory: Ordinals are numbered starting from 0 in the order in which congs are mined. The first cong in the first block has a sequence number of 0, the second cong has a sequence number of 1, and the last cong has a sequence number of 4999999999, thus each cong has an ID attribute.

• Indivisibility: As mentioned earlier, Sats is the smallest unit of BTC and cannot be further divided.

• Transferability: Transfer the cong in the transaction input to the output Sats in a first in, first out order, thereby achieving targeted transfer. But currently, due to the lack of smart contracts in the trading process, a centralized platform is needed to act as an arbitrator.

• Descriptability: Stored on the BTC chain, therefore there is a size limit. Due to the inscription being on the chain and unable to reference off chain content, it cannot be modified, unlike Ethereum NFT indexing through off chain IPFS or AWS. However, due to the lack of smart contracts and other issues, the inscription cannot support on chain royalties.

How to obtain BTCNFT?

• hardware requirements

  • For computers with a capacity of 1 ton or more, most people will use their personal computers to install Bitcoin full nodes. In addition to the space they use, they also need at least 600g of space to store Bitcoin blocks.

  • In a normal network environment, synchronization takes a relatively long time, approximately 10 hours. Domestic users may need to climb over walls or take longer.

• technological process

  • Need to download BitCoinCore and synchronize all nodes, with 500Gb+space;

  • Need to download Ordinal and create an Ordinal wallet;

• Using the instructions of the ord protocol to characterize Satoshi;

  • Transfer to BTC to wallet.

  • Set up a casting robot: convenient for casting and receiving orders.

  • Casting NFTs: It is easy to upload images/audio/videos and have robots help us cast them into NFTs. The larger the file size, the more expensive the gasoline cost required for casting.

  • Cast Sats domain name: The domain name on Bitcoin is purchased once, permanently free, and does not require annual renewal.

    https://docs.sats.id/sats-names/about

    • Set up an inscription. The inscription on Bitcoin can be either an image or a txt document. Taking the txt document as an example, create a Sats domain name.

      • Open the built-in software 'Text Editing' and enter the content required by Sats official requirements

      • Format - Create plain text and save it as a txt file, copying the path where the file is saved.

      • In the orders command window, enter/ Ordwalletinscribe 'file path' - fee rate. You can view the current top priority rate here. It should be noted that the rate must be manually set, as the default rate is 1. Failure to set it will result in being stuck and unable to confirm the transaction.

        https://hub.cryptocell.guru/ordinalsturbo/

      • Wait for block confirmation and run/ Ordwalletinscriptions to view the inscription information. Alternatively, you can also see the latest information on the ordinals official website.

technological processBTC NFTBTCBTC NFT

ordinalsbotGammaunisat_wallettechnological process

BTCNFT Ecological Interpretation:

(1) YugaLabs: The strongest IP creator in the NFT field, YugaLabs, has announced a plan to launch the NFT series TwelveFold on the Bitcoin blockchain based on the Ordinal protocol. TwelveFold is based on a 12x12 grid, which is a visual fable for Bitcoin blockchain data mapping.

Link:https://yuga.com/

(2) DeGods NFT: The Solana Ecological NFT project DeGods has destroyed its 535 NFTs on the Solana chain and used the Ordinals protocol to cast "inscriptions" in a separate block on the Bitcoin chain

Link:https://degods.com/

(3) CryptoPunks: CryptoPunks is the first project to issue NFTs on the Bitcoin network, and currently BAYC is also considering issuing NFTs in Bitcoin.

Link:https://bitcoinpunks.com/

(4) Gamma. io: The Gamma platform aims to bring collectors, creators, and investors together in the Bitcoin ecosystem. This platform consists of three core products: NFT Market, Launchpad, and Social Interaction. Users can use the tools provided by Gamma robots to cast NFTs, solving the pain points of high threshold, complex, and time-consuming NFT technology creation on Bitcoin networks.

Link:https://gamma.io/

(5) OrdinalsBot: OrdinalsBot is also a tool for minting Bitcoin NFTs on the Ordinals protocol, which eliminates the hassle of running Bitcoin nodes when minting Bitcoin NFTs. Players can upload the NFT file you need to cast, fill in the NFT address you need to receive (suggested starting with bc1), click on "Submit&PayInvoice", and the payment address and QR code will pop up, and payment can be made. This is relatively friendly in terms of payment support for Lightning Network and Bitcoin Main Network. Due to the slow speed of the Bitcoin network, it may take 10 to 60 minutes for the payment to be officially confirmed by the network.

Link:https://ordinalsbot.com/

(6) Stacks: Stacks is an open source project initiated by Bitcoin builders and is a Bitcoin Layer2 that can use smart contracts. Strictly speaking, anything that can be built on Ethereum or Solana can be built on StacksL2s. At present, the contract on StacksL2 has been locked for $250 million and 2200 Bitcoins have been distributed to users as rewards. The next version of Stacks, which will be released this year, will add a decentralized BTC anchor, making it easy to transfer BTC into or out of StacksL2.

Link:https://www.stacks.co/

(7) GetAlby: Supports Bitcoin Flash Network Payment

Link:https://getalby.com/

(8) Xverse: Supports BTCNFT storage

Link:https://www.xverse.app/

At present, there are many projects based on the BTCNFT concept, and this article summarizes several benchmark project representatives. VEDAO Research Institute will release a more detailed summary of BTCNFT ecology in the future. Stay tuned.

summary

Although the BTCNFT ecosystem is very prosperous, the current financing situation in the Bitcoin sector is not optimistic. As of February 22nd, according to TheBlock's data, the Bitcoin ecosystem has only $500 million in the past year, which is not in line with Bitcoin's status as a blockchain leader compared to the industry's nearly $30 billion in total financing. In addition to financing issues, BTCNFT currently has many criticisms:

• Firstly, the threshold is exceptionally high:

  • High memory requirements;

  • technological process

  • Gas is expensive and consumes a large amount of funds, making it difficult for small players to afford.

• Secondly, boycotted by BTC fundamentalists:

  • As mentioned above, adding value and meaning to Sats is, to some extent, an act of expanding BTC, which makes many BTC fundamentalists believe that it affects the scarcity of BTC.

  • In addition, endowing Bitcoin with NFT functionality is also seen by BTC fundamentalists as violating the spiritual core advocated in the Bitcoin White Paper.

However, in any case, Ordinals' NFT innovation is to some extent a novel attempt at the future development path of ancient Bitcoin. In addition, with the huge amount of funds in the BTB ecosystem itself, as the Bitcoin ecosystem gradually receives attention, the potential accumulated within Bitcoin will also be further unleashed.

reference

@Jason_ chen998

@CH_ nine hundred and nine

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