[Investing in cryptocurrency is risky. Do your due diligence before making any financial decisions.]
NFTs bloomed during the pandemic, and investors made these assets demanded and popular by buying digital land or investing in unique artwork. NFTs are highly regarded in the crypto market for offering non-transferable identities for assets, which helps artists prove the authenticity of their work.
However, Ethereum-based NFTs are not perfect because they expose users to counterfeiting risks and money laundering, as the NFT may not exist upon purchase. At the same time, the legal issues concerning copyright and intellectual property rights have yet to be established.
So, a new and different version of NFTs began in 2023, when Bitcoin-based assets called Ordinals started to be in demand in the crypto market. Compared to NFTs, Ordinals are safer and of more value, influencing even BTC prediction on how to buy Bitcoin, as the Ordinal protocol makes these assets profitable.
Let’s see where their value comes from and if you should choose them instead of NFTs!
How did the Ordinals appear?
Until now, investing in additional Bitcoin-related assets was close to impossible, but things changed in 2023 when Casey Rodarmor created the Ordinal Theory. The concept revolved around the idea that every Satoshi is mined in a particular order, so it can be linked with a number, also called an inscription. Here comes the interesting part: inscriptions are not limited to numbers and can be anything from images, texts, or GIFs resembling the NFTs we know today.
Therefore, the protocol transforms each Satoshi into a unique entity with a unique name. Ordinals can be categorized into common, uncommon, and mythic models, the rarity of which is given by the creation time and related value. Therefore, some Ordinals are simply better than others.
How are Ordinals better than NFTs?
NFTs have been on the market for some time now and have established ownership, authenticity, and transferability features that no other asset could reach. However, the cost of popularity and uniqueness came with challenging regulatory implications, as finding some barriers for these assets is close to impossible, especially when tied to cryptocurrencies like Ethereum.
On the other hand, Ordinals are more well-established. Because of their cryptographic properties, they’re stored on the Bitcoin blockchain, so they’re used within a decentralized and highly secure environment. Conversely, users store their NFTs on decentralized applications through smart contracts.
Another great thing about Ordinals is that they ensure greater liquidity than NFTs, allowing users to connect their art pieces with Bitcoin’s high liquidity, providing more value over time. Ordinals also receive bonus points for borrowing Bitcoin’s immutability and security, but their best feature is a rarity. Compared to NFTs, which have no quantity limit, Ordinals benefit from Bitcoin’s maximum supply of 21 million coins that help users preserve an Ordinals’ value.
Still, Ordinals are not perfect
Like any emerging crypto asset, Ordinals are heavily challenged by their newness. A prominent issue is the low wallet coverage, which requires investors to search for and use specific wallets that accept both Bitcoin and Ordinals, which are scarce at the moment. At the same time, complex on-chain operations make it difficult for beginners to approach Ordinals, as they’re not as straightforward as NFTs.
Ordinal projects are still figuring out the best way to market their features and break the market, even if they’re supported by Bitcoin investors. Therefore, until they reach the mainstream and become easier to use and invest in, Ordinals will not be as profitable as NFTs.
Ordinals have changed the crypto market
Despite challenges and struggles, creating Ordinals brought something new to the market that was already consumed with ETFs, updates, and the halving. Ordinals also offered investors a new diversification tool that can help them mitigate market volatility, which, in Bitcoin’s case, can be pretty insane.
The development of Ordinals showed us that anything could be possible with crypto, and blockchains offer endless possibilities for improving this ecosystem and addressing concerns regarding the traditional financial system. Considering that Bitcoin is deflationary, people could use it to fight inflation, which is currently hitting the entire world. At the same time, leveraging Bitcoin could be best to navigate the fiat devaluation that challenges countries like Indonesia, Venezuela, and Uzbekistan.
Should you invest in Ordinals?
While they’re new to the market, Ordinals can be a great addition to one’s portfolio because they bring in a lot of liquidity and stability. However, building a portfolio only out of Ordinals is a mistake because investors should pair them with something more valuable.
A balanced crypto portfolio contains, among Bitcoin Ordinals, the following:
- Payment coins;
- Decentralized Finance projects;
- Gaming coins;
- Smart contract blockchains;
- Stablecoins;
Researching various industries to invest in is best because each sector offers unique benefits. At the same time, balancing them creates a safety net in case of a bearish market, in which case it’s best to have a stuffed portfolio.
Some interesting Ordinals projects
Like NFTs, Ordinals are interesting and unique, so you should eye a few before their value slows down. For example, Bitcoin Bandits is a cyberpunk collection on the Bitcoin blockchain with a unique lore that fits into the resurging pop culture.
Another promising project is Ordinal Maxi Biz, which also offers utility because it leverages a unique platform through which companies can tokenize assets on the Bitcoin network and sell them to the audience. The platform is one of the most secure at the moment, with innovative transparency and trust, and will help companies grow their brand image and profit.
Finally, BTC DeGods is a project that combines art and gaming. The collection leverages deity-inspired artifacts that users can access within a gaming universe, building a solid community over interactive features.
What do you think about Ordinals?
While the world focused on NFTs, Ordinals appeared to ensure stability, safety, and uniqueness in an unprecedented class asset. Ordinals are Bitcoin-backed assets with similar features as NFTs, but they’re superior from many perspectives, including security and liquidity, making them in demand. However, their newness and lack of legal framework make them unsuitable independently for investors for now, but their future is bright.