Bitcoin NFTs Ultimate Beginner Guide – What Ordinals Are, How They Work & Difference Between ETH/SOL

Curated By Ralph

Ralph Chua is a publisher. He is passionate about NFTs and blockchain technology. This website is curated with content from his favorite source of information. He created this website with the intention to stay up to date with the ever-evolving and groundbreaking NFT industry.

[Music] Bitcoin is a hardcore cryptocurrency it Has the biggest market cap it has the Most liquidity it's been around for the Longest but one thing that Bitcoin Doesn't have is nfts well it kind of Does it has layer twos and the ability To have nfts that are based off Bitcoin But on the main layer one chain itself It hasn't had that ability not like Ethereum ethereum nfts have taken off Because smart contracts and ethereum was Built in a way that lent itself to it But that is until recently there is a Very smart person out there that was Able to take Bitcoin and put nfts on Them in this video I'm actually going to Break down Bitcoin nfts what they are How they work how you can actually make A bit of money off them so you are just Well informed so that when it does kick In it'll be crazy now right now it feels Like we're an early 2021 when it comes To bitcoin nfts we have seen crazy sales Forty thousand sixty thousand even two Hundred thousand dollars for these Bitcoin nfts now Bitcoin nfts are called Ordinals now this is what you will see All across crypto Twitter now the reason That they're called ordinals is it comes Back to ordinal Theory now ordinal Theory without getting too in-depth is a Way of naming things so you can kind of Remember what they are now I'm going to

Break it down in its simplest form what An ordinal or a Bitcoin nft is now I'm Going to use some money here just to Kind of make it simpler as a prop now When you think of Bitcoin uh people Would think that it is a fungible token The idea that you can take any Bitcoin And you can swap it with any other Bitcoin it's exactly the same there is No difference and this essentially is a Fungible token because they can be Swapped around and you still have the Exact same thing now when it comes to a Non-fungible token the idea is that they Are individual they are different so if You swap them you are going to know that They are different you're going to have A gold one you're going to have a silver One if you swap them you're going to Have the gold here the silver here you Are going to notice the difference now What happened with Bitcoin is they were Like this now Casey what he did is he Made a slight Improvement to bitcoin VIP Bitcoin Improvement protocol what do you Notice when he zoomed in on each Individual Bitcoin each individual sat Is that there was a unique number and What he found out is that what was Essentially a fungible token could be a Non-fungible token because there was This unique identifier so if you can Imagine that every single 100 million Satoshi which is the smallest smallest

Denomination of Bitcoin has its own Unique identify what this meant is it Meant that you could then Swap this one For this one and keep track of it now What he also found out is that you could Actually attach something to that single Satoshi and what he was was able to do Is let you inscribe something so you Could take this silver jpeg Bitcoin and You could attach it to that Satoshi what It also meant is it meant that this Person right here could then trade their Satoshi for this other Satoshi and Essentially get what they perceived as a Higher value Satoshi being the nft and This is essentially the basis of Bitcoin Nfts now to break it down with ethereum You've got essentially the currency up Top here but then underneath what's Actually kind of bubbling around Underneath here is you've got these fun Little smart contracts and this is where The nfts come from and then what Essentially happens is that you've got This ethereum address which holds a Little bit of ethereum then goes hey I'm Going to create these little images I'm Going to put them on the blockchain then What happens is when you actually want To send them to another address right Here what you then do is you essentially Take your image page you then pay a Little bit of a fee to then have it Mailed over it then goes into this

Wallet this connection here what happens Is essentially this ethereum is Transferred back and forth to help send These here but they're actually not Attached to it so you could actually Send three of them over spend a little Bit and then you've got more of these Nfts in a different wallet now when it Comes to bitcoin nfts you've got the two Addresses and they're all holding some Satoshi's each now what happens is when You actually want to send the nft the Nft isn't in the wallet the nft is the Currency what Bitcoin nfts are is you're Putting the nft that non-fungible token That image whatever you would like into The actual currency itself which means That when you want to send this over You're sending the actual currency when You send a board ape to someone else You're not sending ethereum you're Sending a board ape token you're sending An nft to someone else when you send a Bitcoin nft when you mint Bitcoin and Nft when you buy a Bitcoin nft you're Actually buying some of the Bitcoin You're buying a small fraction one 100 Millionth of a Bitcoin with that image And jpeg attached to it now this also Means that there are limitations to what Can be done on the Bitcoin blockchain at The current point in time when it comes Down to nfts with ethereum you were able To have a collection you were able to

Have multiple different nfts that were a Part of a collection because they Weren't attached to the currency Themselves they were their own currency But with Bitcoin because every single Satoshi is unique you don't really have A way to group all of these satoshi's Together to say that this is a Bitcoin Collection because it is just a series Of very very minute very very small Amount of Bitcoin nfts so this means at This current point in time when we're Not going to see big giant collections Of nfts on bitcoin we're going to Essentially see a series of one of ones That's the best way to describe it Because at this point in time there is No way to group these together on the Blockchain unlike ethereum nfts where That one wallet then makes those three Nfts and then it has that wallet that Addressed that smart contract as the Parent now there are some limitations Right now because it is a currency that Is being traded back and forth there is No metadata because there is no smart Contract integration there's no way to Scrape the data on each of each Individual Satoshi to then work out the Rarity work out the uh Work out the different traits the ID is You're essentially taking something very Flat say an image and you're inscribing It onto the currency itself you take

Another piece of currency you then put Another image you take another piece of Currency you put on an image and even Though we have two similar looking nfts And one different one to the blockchain To the people that are looking at it They all look the same now this doesn't Mean that this won't be improved on and Changed on in the future this could Happen now look we are very much in the Infancy of this to set up a wallet you Need to get a Bitcoin node uh set up and Running you need to download the odd Wallet you have to run things with Command line it is hard it's not easy It's not seamless like metamask and to Mint them you need to do the same thing You need to run some programs run some Command lines it is very hard at the Moment there are some tools that are Coming out if you want to easily mint Something you can then go to ordinals Bot which is good there are marketplaces Underway there are wallets underway at The moment there's almost no real way to Surf the images of ordinals it's very Hard there are some explorers just like This one but it's not like Open Sea Where you can type in a collection and Find things out the technology hasn't Caught up yet and there are people Working on this day and night because It's such a Cutting Edge groundbreaking Thing now one thing that I will say with

Wallets is I actually set up a sparrow Wallet now the reason that I set up a Sparrow wallet for any ordinals is when You actually have a look on this page of The ordinals handbook you can see here That a sparrow wallet can be set up but It can't be transferred from the wallet But it is a great wallet to receive in Now an interesting Dynamic with ordinals Is unlike ethereum nfts where you have The Creator that deploys the contract Spends a little bit of gas to make the Contract and then every single mint that Comes along comes long spend some money And gets their item they come along Spend some money then it goes onto the Blockchain Spend some money goes on with the Blockchain now we have a series of nfts Out there in the wild with ordinals it's The other way around the person Themselves has to actually mint it to The blockchain because each of these is A piece of currency so so it has to Actually be created before it can be Kind of sold so what happens is if we Want three nfts on the Bitcoin Blockchain the person that mints them That wants to sell them has to actually Mint them so they spend money they spend Money they spend money they're then Holding them right here this person Comes along they can then spend two Monies and get that ordinal so what

Happens is there is a higher cost Because it's not like one deployment and Then everyone pays gas to get it the Idea is that the person that actually Creates the nft needs to spend the Transaction to actually get it onto the Blockchain now these aren't cheap things To do because it depends on the size of The image because a block can go up to Four megabytes you may be competing with Other people within that block so it can Get quite expensive so we aren't going To be seeing games we aren't going to be Seeing videos we're not really going to Be seeing gifs you're basically going to Be seeing jpegs and things that are Quite small now one of the best things About ordinals is the fact that these Items and artifacts are actually on the Blockchain they're not on ipfs they're Not hidden somewhere else on the Internet we don't have a link that Points to an image we have the image That's on the blockchain because what Can happen is this board ape or this Doodle they're actually sitting on a Server somewhere so if that server goes Down if that server is destroyed if Someone doesn't pay the upkeep what can Happen is that image can disappear you Still have ownership of it but you don't Have the image because it's not pointing To anything with ordinals all of these Items are on the blockchain itself so it

Means that it is going to last a Substantially longer time time than Something like ipfs because the Blockchain has been around and has Continued to be around people are Securing the network because they are Rewarded monetarily for it so this is Another advantage and this is where I Think we will end up with bigger uh Smaller collections but bigger artists Because if someone is spending money to Deploy these images onto the blockchain They're going to be there forever They're spending money to put that Content up there so you're more likely To get a better quality and because There is a higher barrier to entry to Get it on there and currently to Actually kind of buy sell trade I think This also leaves that opportunity for Upside because those that are Technically Savvy that actually have the Liquidity didn't move around will Actually be able to collect by trade and I believe there's more upside in that Way so how are trades currently being Made in ordinals if there is no Marketplace and you need to download Different wallets to actually set this Up well what's happening is it's OTC Over the the counter essentially you Have someone that has this Bitcoin nft And ordinal and you have someone over Here that wants this nft what they then

Do is they strike up a deal usually over Discord and then what happens is they Will then pay an exorbitant amount of Money for this nft and because this nft Essentially is currency it's then Transferred over now if you actually Have the nft because it is a currency if You haven't set up your wallet correctly What can actually happen if you want to Send your Bitcoin nft across to another Wallet you actually need to specify Which specific Satoshi you would like to Send and what specific Satoshi you would Like to use as gas essentially as a Transaction because unlike ethereum nfts Where you're choosing an nft in your Wallet you actually need to choose that Specific Satoshi to send what can happen If you actually spend money from the Wallet that you you receive your ordinal In if you haven't set it up correctly is You can actually just spend some money On something else you could transfer Someone uh that Satoshi but you could Actually spend that Satoshi because You're not sending an nft you're sending A piece of currency that has the nft Attached into it which can mean that These can easily be lost and spent if People aren't careful about how they're Using it so this isn't something you Should just jump into Um a half-heartedly you should do some Research you should put in the hours you

Should watch videos like this watch Plenty of videos there's a great video By John Carlo I'll link it up here you Have to watch it he's got some great Information and the idea is it's it's Very new it's very chaotic but this is Where the opportunity lies those people That moved in early on ordinal punks Were able to make big flips big gains They were able to take a singular jpeg Attach it to a Satoshi and then it has Been worth tens of thousands of dollars So that is a breakdown of ordinals and How nfts are actually on the main Bitcoin blockchain now I'm excited for This and this is something that I'm Going to be paying close attention to And I think you should too Bitcoin has The largest market cap it has old money It has Heritage it has a lot of wealthy People within it because it has been Around for so long now with these Ordinals I think it's very easy for uh Big whales to actually want to collect Certain pieces now I think there will be At some point in time the Blue Chip the Grails that will be minted on to the Bitcoin blockchain and they will become Collectors items people will flock to Them we will have the art blocks of Ordinals we will have the crypto punks Of ordinals even though we've kind of Got ordinal punks but an original one we Will have the board ape of ordinals we

Will have something that will come out That will take over that will be true Generational wealth and if you are Across it and able to use the technology Early when other people can't you're Able to take advantage of it and turn That into your advantage and get that Generational wealth now if you've found Valiant's video hopefully you enjoyed This little demonstration with some Money with some coins to hopefully give You a visual representation about how This all works just so you've got a Better understanding about ordinals if You found value in this video please Scroll down there hit up that subscribe Button and while you're down there also Hit up the like button as always it's Been a pleasure having you with me I Look forward to seeing you in the next One Foreign [Music]

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