Bitcoin Ordinals brought something many thought impossible: NFTs native to Bitcoin. No smart contracts, no sidechains — everything etched directly into the Bitcoin blockchain. This guide explains how they work, why they're different, and how to track their prices.
The basics: satoshis and numbering
Each Bitcoin is divisible into 100 million satoshis (sats). The Ordinals protocol, created by Casey Rodarmor in January 2023, assigns a unique ordinal number to every satoshi ever mined. This turns each sat into an identifiable, trackable unit.
Think of it this way: before Ordinals, every satoshi was identical. After Ordinals, each satoshi has an "identity" — a sequential number based on the order it was created. This is Ordinal Theory.
What are Inscriptions?
An inscription is the process of etching data (image, text, audio, video, HTML) directly onto a specific satoshi. That data is stored permanently on the Bitcoin blockchain.
Unlike NFTs on Ethereum or Solana, where the image is usually hosted on external servers (IPFS, Arweave), Bitcoin inscriptions keep everything on-chain. The image, the metadata — it all lives inside a Bitcoin block, forever.
Inscriptions are immutable. Once etched on the Bitcoin blockchain, an inscription cannot be altered, deleted, or censored by anyone. As long as Bitcoin exists, the inscription exists.
How does it work technically?
Ordinals leverage two Bitcoin upgrades:
- SegWit (2017) — separated signature data, freeing extra space in blocks
- Taproot (2021) — allowed arbitrary data to be stored in a transaction's witness field
In practice, the inscription data is placed into the witness field of a Taproot transaction. This allows up to 4MB of data per block (Bitcoin's block weight limit), though most inscriptions are far smaller.
The inscription process
1. Pick a specific satoshi in your wallet
2. Etch the data (e.g., a PNG image) onto that satoshi via a Taproot transaction
3. The transaction is mined and confirmed on the blockchain
4. The satoshi now permanently carries that inscription
5. When you transfer the satoshi, the inscription goes with it
Ordinals vs traditional NFTs
The fundamental difference is where the data lives:
Ordinals (Bitcoin) vs NFTs (Ethereum/Solana)
Storage: Ordinals are 100% on-chain. Traditional NFTs typically store the media off-chain (IPFS, Arweave, centralized servers).
Smart contracts: Ordinals don't use smart contracts. Traditional NFTs depend on contracts (ERC-721, ERC-1155).
Blockchain: Ordinals live on Bitcoin, the most secure and decentralized network in the world. Traditional NFTs live on smaller chains.
Immutability: An inscription on Bitcoin is virtually impossible to censor. NFTs on other chains depend on those networks staying alive.
Cost: Inscriptions can be expensive (Bitcoin fees). NFTs on Solana cost fractions of a cent to mint.
Popular Ordinals collections
The Ordinals ecosystem grew quickly. Some of the best-known collections:
- Bitcoin Punks — the first PFP collection inscribed on Bitcoin, inspired by CryptoPunks
- Quantum Cats — by Taproot Wizards, featuring generative cat art
- NodeMonkes — one of the largest PFP collections in the Ordinals ecosystem
- Bitcoin Frogs — collection of 10,000 frogs that became a market reference
- Ordinal Maxi Biz (OMB) — one of the earliest communities in the ecosystem
- DOG — Ordinals memecoin token that gained massive traction
Most collections trade on Magic Eden, the leading Ordinals marketplace, with floor prices denominated in BTC.
BRC-20: tokens on Bitcoin
Beyond images and media, the inscriptions protocol also enabled fungible tokens on Bitcoin, known as BRC-20. These tokens use JSON-format inscriptions to define deploy, mint, and transfer operations.
Popular BRC-20 examples include ORDI (the first BRC-20), SATS, and MUBI. Despite the name referencing Ethereum's ERC-20, the mechanism is completely different — no smart contracts.
Why Ordinals matter
Ordinals matter for several reasons:
- Maximum security: they live on the world's most secure blockchain
- 100% on-chain: no dependency on external servers
- Permanence: they exist as long as Bitcoin exists
- Miner revenue: inscriptions generate fees, strengthening network security
- Cultural innovation: they brought art, collectibles, and experimentation to Bitcoin
Not everyone in the Bitcoin community supports Ordinals. Critics argue inscriptions "bloat" the blockchain and compete with financial transactions for block space. Supporters say Bitcoin is an open network and any legitimate use should be allowed — and that the extra fees benefit network security.
How to follow Ordinals prices
The Ordinals market is volatile and fast: collections can gain 50% or more in hours — and give it all back the next day. Each collection's floor price is tracked on the marketplaces where it trades, like Magic Eden and OKX, which show the lowest active ask in BTC.
One characteristic of this market is worth understanding: because prices are quoted in BTC, your result in fiat has two layers. A collection can hold a stable floor in BTC and still be worth far less in dollars because Bitcoin itself dropped — and the reverse happens too. For anyone exposed to Ordinals, following the BTC price stops being optional: it's the denominator of everything.
Alarm Crypto does not track Ordinals collections. The app follows cryptocurrency prices across 6 exchanges — including Bitcoin, the currency the entire Ordinals market is quoted in.
The alarm that makes sense if you hold Ordinals
In Alarm Crypto, mark the BTC levels that would change your read: a price where the whole inscriptions market tends to cool off, and one where it tends to heat up. Since the floor is quoted in Bitcoin, that's the variable moving your collection's value even when nobody is trading. The method for choosing those values is in how to set Bitcoin price alerts.
The future of Ordinals
The Ordinals ecosystem keeps evolving. New standards like Runes (a fungible-token protocol from Casey Rodarmor himself) promise to be more efficient than BRC-20. Marketplaces like Magic Eden and OKX expand access, and the community grows daily.
Whatever your view on NFTs, Ordinals represent one of the most significant innovations in Bitcoin since Taproot. They proved Bitcoin can be more than "just" digital money — it can be a platform for art, culture, and permanent experimentation.
Conclusion
Bitcoin Ordinals are NFTs etched directly into the Bitcoin blockchain, with no smart contracts and no dependency on external servers. Using the inscriptions protocol and the ordinal numbering of satoshis, any kind of data can be permanently stored on Bitcoin.
If you're exposed to this market, remember everything in it is quoted in Bitcoin — and it's BTC that decides what your collection is really worth. With Alarm Crypto you mark the Bitcoin levels that matter and get the warning with a loud sound even with the phone locked, monitoring 6 exchanges in parallel.