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NFTs are often associated with Ethereum and Solana since they're the most popular blockchain networks for the decentralized activities of organizations and individuals. However, Bitcoin hopped on the trend too, innovating its platform to allow the creation of NFTs. Despite their long existence, they have gained popularity in the past few years. Even if the BTC blockchain doesn't have a straightforward tokenization process, developers, investors, and collectors find great opportunities to create a new income from the ordinals. The algorithm behind the technology is not as complicated as other programmable platforms, but BTC still provides high-security levels. In this article, explore the NFTs world and find out what's their purpose in the digital market:
How do NFTs work?
NFTs (Non-Fungible Tokens) have been on the market for a while, but as we've mentioned before, the most popular blockchains for tokens are Ethereum and Solana. Bitcoin's NFTs work a bit differently. The ordinals protocol was launched in January 2023 and relies on a numeric scheme, meaning that every Satoshi (The smallest denomination of Bitcoin) has its own code that allows the verification and tracking of the activities and mint the NFTs on the blockchain. Each Satoshi is then inscribed with data like text, videos, or pictures, which will remain permanently part of the BTC blockchain. Furthermore, this theory gives each and every one of them an individual identity, providing them with a unique meaning depending on their use cases. Lately, BTC has offered a layered solution that allows the execution of smart contracts, also making NFTs sustainable and scalable. The token's functionalities include the overall liquidity of the network and stacks. Also, they can be traded, bought, or sold in the marketplace to gain potential profit or hold the digital items as collectibles. Still, the Bitcoin's blockchain base layer has limited programmability, making the tokenization more difficult, but yet, not impossible, since the innovations are continuously surprising traders this year.
NFTs marketplace
NFTs can be sold, bought, and traded on a dedicated marketplace. Ordinals can be a great way to diversify your portfolio since they are available in a wide range of NFTs, including collectibles, digital art, and even real estate. The marketplace relies on the decentralization principles of blockchain technology, ensuring a secure framework for users' activities. NFT markets transcend geographical boundaries and have global accessibility. Creators can tokenize NFTs like digital art pieces or photography and sell them on the digital market, where they can gain a wide audience from which investors and traders can buy the tokens for partial ownership. The unique nature of NFTs is what makes them so popular, as the numeric code attests to their originality, and their value might increase over time thanks to this feature. However, before entering the market in the search for opportunities, make sure you choose a trustworthy source, taking into consideration the reviews and past history of the platform to evaluate its security and opt for a user-friendly interface to conduct your activities easily and quickly.
Stacks on Bitcoin Blockchain
Bitcoin's layered system aims for improvements to allow unlimited activities in the near future, like the competitors Ethereum and Solana, which have a fully programmable blockchain. Stacks is an open-source layer two that introduces some considerable improvements, like the introduction of smart contracts, decentralized apps (dApps), and digital assets (NFTs). It was launched in 2018, but the latest update in the network came after two years with Stacks 2.0. The integration of stacks with NFTs is the solution to the challenges that regular NFT platforms face. The computing network secures the digital assets on the BTC blockchain, increasing security and immutability. Also, this aspect can enhance their liquidity and provide an overall safe ecosystem for any practice. Stacks can also simplify the access to NFTs and their adoption because by anchoring them to the existing blockchain, the system votes on the validity of the assets and ensures compatibility with the Bitcoin wallets and infrastructure. To store and manage NFTs efficiently, you need to choose a compatible wallet for Stacks and buy them directly.
Use cases of ordinals
Bitcoin ordinals present multiple unique use cases. For instance, these are some popular examples:
Digital art: Bitcoin's technology offers artists and creators the opportunity to inscribe their work to a Satoshi to enter the digital market to reach a wider audience and ensure the security and originality of their art thanks to the immutable system and unique numeric codes.
Collectibles: Since Bitcoin's NFTs can be found as rare and uncommon, many crypto-enthusiasts start collecting the original assets and holding them for their value, with the potential of being resold once the market explodes.
Gaming: Bitcoin's ordinals can be used as in-game items on blockchain-based videogames because, unlike traditional gaming, where the investments for accessories remain in the custody of the developers, with NFTs, players have full control over their assets.
Data storage: Ordinals can minimize disputes over copyrights, as the party involved can track the history of ownership of the digital assets and assure customers that they will buy an original item.
BTC vs. ETH NFTs
The core difference between Bitcoin ordinals and Ethereum NFTs is that BTC stacks store the assets directly on the blockchain, making them immutable and more secure, while ETH relies mainly on smart contracts to allow the creation of NFTs depending on their purpose, providing a clear regulatory framework. Still, even if Bitcoin embraces digital contracts too, the opportunities are more limited, but the leader of the market aims for innovation, so we wait to see what happens next; for now, we can say that the experts' sentiment promises a positive outcome.
The bottom line
One thing is for sure, Bitcoin is here to stay, and eventually to transform the digital market with considerable innovations that offer crypto-enthusiasts new opportunities to win their financial freedom and let go of conventional finance.
