What are Bitcoin Ordinals? You can read more here.
In our opinion, Bitcoin Ordinals are going to be an important market for NFTs - see the reasons below.
Bitcoin Ordinals are an amazing opportunity for artists, and we are way ahead of the curve in supporting this technology.
We have developed a simple protocol to allow select NFTs in a collection to get transferred to Bitcoin as Ordinals, see below.
The main reason for the strong adoption of Bitcoin Ordinals are many:
- The implementation of Bitcoin Ordinals is briliant. It is shockingly easy to create Bitcoin Ordinals - much easier than creating NFTs on Ethereum.
- Although not strictly designed for NFTs, the design lends itself well to many forms of NFT, and particularly well to generative art.
- The market cap of Bitcoin is 543B (March 21, 2023), and much of this is idle money with nothing to do. Until now.
Considerations
Ordinals work well with generative art under most conditions. This is because the code is shared across all the NFTs in a collection, and this can be optimized with Bitcoin Ordinals.
Asset Size
The main thing to consider if you are planning to enable Bitcoin Ordinals is the size of your assets. If you use small libraries and small or no images, you won't have any problems running as a Bitcoin Ordinal.
Price to Charge
The artist can set a price for a token transfer (see below). This is recommended for at least two reasons.
- No royalties
On chain royalties are not supported for Bitcoin Ordinals. It's similar to Ethereum before royalties were enforced on chain - markets may support them (none do yet), but don't have to. It's unlikely this will change in the short term, so artists should set an appropriate price. See below for details.
- Premium for Art on Bitcoin Ordinals.
There may be a premium for art on Bitcoin Ordinals, see Twelvefold from Yuga. The average price was over $50K at the time of the auction.
Should I Try Bitcoin Ordinals?
Most definitely yes! You should at least enable a few NFTs in your collections. A good way to test the waters is to mint a few NFTs for yourself, transfer them to Bitcoin, and start playing.
How it Works
The artist can enable the transfer of NFTs to Bitcoin Ordinals from the Manage page. A price can and should be attached for this privilege (see above).
The artist can enable one or more ranges of token ids for transfer. A different price can be attached to each range. An example is something like [1, 5, .2], [50, 50, .8]. This would enable token ids 1-5 with a price of .2 ETH, and token id 50 would be .8 ETH.
If the owner of one of the enabled NFTs wants to transfer it to Bitcoin, they can pay the price the artists sets (plus our fees), and we will transfer the NFT to Bitcoin. This is done in two stages.
- Ownership of the NFT is transferred to the contract, so it will no longer be tradeable on Ethereum. This is done on chain in the transfer method.
- Cognitive will create the Ordinal into a Taproot address specified by the owner.
After this process, the NFT is no longer tradeable on Ethereum, and the owner has the Ordinal in a Bitcoin account.
Can I go back to Ethereum?
Theoretically, yes, and it may be supported at some point. The process itself (and the contract code) is trivial, but it's more difficult to do in a trustless way. Whereas the forward process is fully trustless.
More Details
This process is mediated by methods built into our NFT contract and an off chain signing process. The off chain signing process collects all the data and checks everything for validity. It creates a payload that is then passed to the contract method that actually does the transfer.
The signing process is mainly a sanity check to make sure the information required for the transfer is correct, and it could eventually be turned off. For now, we are keeping it because Bitcoin Ordinals are such a new technology.
Not everything is totally automated as far as creating the Bitcoin Ordinal, but the process is efficient enough now that we can offer it. The main criteria is the size and complexity of the assets in a collection. If they are very small and simple, then enabling the collection on Bitcoin is cheap and easy.