Magic Eden Unveils Bitcoin Ordinal NFT Marketplace
In early April, Magic Eden announced the introduction of Bitcoin ordinal NFTs to their marketplace. The trend has been growing since the concept became popular earlier in the year, and it appears that Magic Eden wants to be the first to offer the new asset to users on their marketplace.
Ordinal NFTs on Magic Eden
Ordinal NFTs are a new form of non-fungible token that exists on the Bitcoin network by inscribing Satoshis (the atomic unit of bitcoin) with data such as artwork or messages. Although messages have already been observed on the Bitcoin blockchain, ordinal NFTs take the concept further by directly placing data onto bitcoins.
This novel experiment is causing a lot of intrigue within the NFT community, which has struggled in recent months due to the decline in demand for non-fungible tokens across all networks. While ordinal NFTs won’t solve the issues that currently plague the NFT market, they do provide an interesting new way to invest in artwork on the most popular network available.
Originally, NFTs were only available on networks like Ethereum and Solana because their blockchains allowed smart contracts to be deployed on them. Bitcoin, however, does not have this ability and only offers users basic features like sending transactions and recording data.
What wallet is needed for ordinal NFTs?
In order to interact with ordinal NFTs, users are required to create a new private key from wallet providers that include Xverse, Hiro Wallet, and Unistat. Unlike regular Bitcoin wallets, these providers offer taproot address technology within the wallets that can separate fungible bitcoin tokens from satoshis that carry inscribed data on them.
Basically, users will need a wallet that hosts two private keys - one for their regular bitcoin holdings and the second for the ordinal NFTs. It is important to also note that sending bitcoin to the address meant for ordinal NFTs will result in lost funds because the ordinal address is expecting to receive individual satoshis with data inscriptions.
Are ordinal NFTs fungible?
The primary concern with ordinal NFTs is whether or not they are truly non-fungible. Inscribing data onto satoshis is no different from drawing on a fiat dollar with a marker which can cause issues for investors who may not see the value in money that is essentially just decorated.
Within the NFT community, there are still many investors that are particular about the technology behind their tokens. Art Blocks, for example, is a community of artists and collectors that value how much data is stored on-chain versus off-chain in protocols like IPFS.
In the case of ordinal NFTs, there is likely to be a strong backlash from NFT collectors that don’t see the point in etching artwork onto fungible tokens. Further, because the Bitcoin network does not utilize smart contracts, there is no utility of any sort that can back up the value for ordinal NFTs which has become a strong point for consideration among traders and collectors that only want to purchase NFTs with utilities.
However, that is not to say that ordinal NFTs are worthless, they’re simply new and it will take some time before the market can accurately judge their value. Until then, Magic Eden appears to be the best place to start browsing for ordinal NFTs.
