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Ordinals: NFTs on Bitcoin




Non-fungible tokens (NFTs) have gained immense popularity on blockchains like Ethereum, Solana, and BNB Smart Chain. However, the Ordinals project aims to extend the concept of NFTs to the Bitcoin blockchain. While Bitcoin’s decentralized nature and security have historically made it difficult to implement changes to its code, the Ordinals team believes that Bitcoin NFTs have a place in the future of Web3. In this article, we will delve into the concept of Bitcoin Ordinals and explore its potential impact.

Understanding Bitcoin Ordinals

The Ordinals protocol introduces a system for numbering satoshis, the smallest unit of Bitcoin, and tracking them across transactions. By attaching extra data to each satoshi through a process called “inscription,” Ordinals enables the uniqueness of individual satoshis. This means that each satoshi can be treated as a distinct digital asset, similar to an NFT.

Unlike traditional NFTs, which rely on smart contracts and may have the assets they represent hosted elsewhere, Ordinals inscriptions are directly embedded onto individual satoshis within the Bitcoin blockchain. This approach ensures that Ordinals reside fully on the Bitcoin blockchain itself, inheriting its simplicity, immutability, security, and durability.

Ordinal Theory and Inscriptions

Ordinal Theory, in the context of Bitcoin, refers to the proposed methodology for identifying and tracking each satoshi throughout its lifecycle. This theory enables the inscription of digital assets, similar to NFTs, on individual satoshis within the Bitcoin network. The Taproot upgrade, implemented on November 14, 2021, made it possible to create ordinal inscriptions without the need for a separate sidechain or token.

Ordinal inscriptions come with a ranking system based on the rarity of satoshis. These rankings include:

  1. Common: Any satoshi other than the first satoshi of its block (2.1 quadrillion total supply).
  2. Uncommon: The first satoshi of each block (6,929,999 total supply).
  3. Rare: The first satoshi of each difficulty adjustment period (3437 total supply).
  4. Epic: The first satoshi after each halving (32 total supply).
  5. Legendary: The first satoshi of each cycle* (5 total supply).
  6. Mythic: The first satoshi of the genesis block (1 total supply).

Pros and Cons of Ordinals:

Ordinals bring forth new possibilities for the Bitcoin network beyond simple value transfers. However, this protocol has sparked controversy within the Bitcoin community. Some argue that Bitcoin’s simplicity should be preserved, focusing solely on storing and transferring value. Others believe that Bitcoin should evolve to include new features and use cases, with Ordinals being one such innovation.

One concern raised by the introduction of inscribed satoshis is the competition for block space, which can increase network fees. While some view this as a positive incentive for miners to secure the blockchain, others express reservations. As block rewards diminish over time, network fees will become the primary incentive for miners. The Bitcoin community remains divided on the implications of Ordinals, but the project undeniably brings innovation to the Bitcoin space.

Wallets for Bitcoin Ordinals

Previously, there was a lack of designated wallet interfaces for storing and transferring Bitcoin Ordinals Inscriptions. However, the situation has begun to change with the introduction of three wallets that now support Bitcoin Ordinals functionality: Ordinals Wallet, Xverse, and Hiro Wallet.

While the current functionality of these wallets may be limited, their developers have indicated that more features are on the way. These wallets serve as convenient options for users who prefer not to go through the process of setting up a separate Bitcoin wallet. Alternatively, if you seek more customization options, you can set up a Bitcoin wallet like Sparrow, which allows for Ordinal inscriptions.

To make compatible with Ordinals, check this detailed tutorial that provides step-by-step instructions. It’s important to note that this wallet is specifically for receiving Ordinals, and you should avoid sending BTC from this wallet to prevent accidental loss of both BTC and Ordinals.

Sparrow wallet

Exploring Ordinals Marketplaces

With the rise of Bitcoin Ordinals, dedicated marketplaces have emerged to facilitate the buying, trading, and creation of Ordinals. One such marketplace is Gamma, which has introduced a trustless Bitcoin Ordinals marketplace. Gamma aims to provide a remarkable Web3-native experience by combining an open marketplace, creator tools, and integrations with secure third-party wallet extensions. On Gamma, users can not only engage in buying and trading Ordinals but also create their own inscriptions.

Gamma Marketplace

Another noteworthy marketplace is Magic Eden, which has recently launched its Bitcoin NFT Marketplace. This platform offers a space for users to discover, buy, and sell Bitcoin Ordinals and other NFTs. Magic Eden provides a user-friendly interface and a seamless trading experience, attracting enthusiasts looking to engage with the growing Ordinals ecosystem.

Magic Eden Marketplace

Final Thoughts

As the popularity of Bitcoin Ordinals continues to surge, wallets and marketplaces are stepping up to cater to the demand for storing, trading, and creating Ordinals. Wallets like Ordinals Wallet, Xverse, Hiro Wallet, and customizable options like Sparrow offer users convenient solutions for managing their Ordinals. Meanwhile, marketplaces such as Gamma and Magic Eden provide platforms for buying, selling, and exploring the vibrant world of Bitcoin Ordinals and NFTs. With further developments on the horizon, the Bitcoin Ordinals ecosystem is poised to expand, offering exciting opportunities for users in the evolving Web3 landscape.

Professional Trader, Social media scholar and a Crypto expert. If you have any comments, suggestions or questions feel free to contact me at [email protected] and i will get back to you shortly.


Kuwait Authorities Unanimously Ban the Use of Virtual Assets





In a collective effort, the regulatory authorities in Kuwait, represented by the Central Bank of Kuwait, the Capital Markets Authority, the Ministry of Commerce and Industry, and the Insurance Regulation Unit, have issued directives to ban the use cryptocurrencies and other unregulated virtual assets within the country.

The Kuwaiti Capital Markets Authority stated in an announcement released on Tuesday that these recommendations are provided by the Financial Action Task Force (FATF) to combat money laundering and terrorism financing. The issued directives impose an “absolute ban” on most digital currency transactions, including their use for payments or investments, as well as the prohibition of mining activities. Additionally, the regulatory authority restricts local authorities from granting licenses to companies seeking to provide services related to virtual assets as business activities.

The announcement states that the comprehensive ban does not include securities and other financial instruments regulated by the Central Bank of Kuwait and the Capital Markets Authority. The primary objective of these directives is to safeguard users from the risks associated with virtual assets. These proactive measures represent a significant step by the Kuwaiti authorities to mitigate the risks linked to investing in such assets, often used for speculative purposes.

The continuous awareness campaigns launched by regulatory authorities in Kuwait caution cryptocurrency users, especially those dealing with popular digital currencies such as Bitcoin (BTC), Ethereum (ETH), Dogecoin (DOGE), and others, about the potential risks associated with their usage and investment.

Moreover, since 2017, the Central Bank of Kuwait has prohibited commercial banks and other financial institutions from processing any transactions involving Bitcoin. In May 2021, the bank reaffirmed the illegality of digital currencies in the country.

Before the ban, Kuwait did not impose taxes on income derived from digital currencies, leaving the door open for investors in the crypto space.

Mining companies had previously shown interest in establishing a base in Kuwait due to its low electricity costs. However, the recent campaign has closed the door on crypto investments and mining activities within Kuwait.

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Unlocking the Tax Maze: Cryptocurrency Compliance in Australia

June G. Bauer



As tax season approaches, cryptocurrency owners in Australia are being urged to be vigilant and comply with tax regulations. With the Australian Taxation Office (ATO) prioritizing capital gains, including cryptocurrencies, individuals who have omitted crypto transactions from previous tax returns may face scrutiny.

According to Sky news, With millions of Australians estimated to invest in digital currencies, the ATO’s data-matching program monitors crypto transactions to ensure tax law compliance. Experts emphasize the importance of understanding capital gains rules and keeping accurate records to avoid potential penalties.

According to Danny Talwar, head of tax at crypto tax calculator Koinly, many Australian crypto owners mistakenly overlook the country’s capital gains rules and their application to digital currencies. While converting crypto into Australian dollars is commonly known to require reporting, individuals must also report instances where one cryptocurrency is used to purchase another. Talwar highlights the necessity of documenting the purchase price, sale price, and market value of the acquired crypto asset. Neglecting proper record-keeping can have serious consequences during tax time. To streamline the process and ensure compliance, utilizing a crypto tax calculator is highly recommended.

ATO Assistant Commissioner Tim Loh advises consulting with a registered tax agent to ensure compliance with tax regulations. Crypto assets are generally subject to capital gains tax, and activities involving crypto often result in taxable transactions. Even selling or withdrawing crypto at a crypto ATM may not qualify for the “personal use” asset exemption. Taxpayers are required to report gains or losses from disposing of crypto assets in their tax returns. Loh emphasizes the importance of maintaining comprehensive records of crypto dealings to accurately report during tax time.

In addition to the crackdown on crypto transactions, the ATO has identified three other priority areas this tax season. Changes to work-from-home deductions now require taxpayers to use the actual cost or revised fixed-rate method (up to 67 cents per hour) rather than the blanket 80-cents-per-hour rate. Record-keeping requirements have also been updated, with Australians working from home obligated to maintain records of all hours worked throughout the financial year. Rental-property deductions, particularly interest-expense claims, are under scrutiny due to previous errors detected in up to 90 percent of landlords’ returns. Furthermore, the ATO will focus on ensuring accurate reporting of income earned from side-hustles and gig-economy work.

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Texas Emerges as a Cryptocurrency Mining Hub

June G. Bauer



Everything truly is bigger in Texas, and that includes cryptocurrency mining operations. The Lone Star State currently boasts the largest cryptocurrency mining facility in North America, accounting for approximately 15% of global mining operations, according to researchers.

However, along with the massive scale of these mining operations comes an equally large power consumption. Cryptocurrency mining involves running complex computation algorithms to validate transactions, and the more calculations a computer can solve, the higher the chance of receiving cryptocurrency rewards, such as Bitcoin, explains the Texas Comptroller.

“In a nutshell, mining Bitcoin is an extremely energy-intensive process. This is why the computing demands have reached a level where they rival the electricity consumption of entire cities,” explains Le Xie, a professor in the Department of Electrical and Computer Engineering at Texas A&M University.

By 2023, the Texas Comptroller estimates that cryptocurrency mining facilities in the state could demand as much power as Houston, the fourth-largest city in the U.S. Already, these facilities are consuming energy on par with the city of Austin, adds Xie.

Despite the significant energy requirements, Texas political leaders have actively promoted the state as an attractive destination for mining companies, citing the economic benefits they bring to rural areas. However, questions arise regarding the risk these mining operations pose to the Texas energy grid.

Professor Le Xie has conducted extensive research on the impact of mining facilities on the Texas grid. His studies focused on three key areas: grid reliability, carbon dioxide emissions, and wholesale energy market prices.

“Their impact largely depends on how you model them,” explains Xie. If these facilities are modeled as constant demand, there can be a substantial impact on grid reliability, as they require continuous power and may strain the grid during peak periods.

Conversely, if the facilities are flexible and can be turned off during periods of grid instability, they could potentially provide additional energy to support the Texas grid, according to Xie.

The findings from Xie’s team were published in the March issue of the Institute of Electrical and Electronics Engineers Transactions on Energy Markets, Policy, and Regulation, as well as the June issue of Advances in Applied Energy.

“We are pleased to share that the models and data we have utilized can be beneficial not only in Texas but also across the country. They provide decision-makers with insights into the performance of mining facilities during stressful situations,” states Xie.

As the cryptocurrency mining industry continues to expand in Texas, further research and careful consideration of its impact on energy consumption and grid reliability will be crucial to ensure sustainable growth and stability in the state’s energy infrastructure.

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