Bitcoin used to be “just” money. Now it’s also a platform for NFTs and token experiments that look, feel, and behave very differently from what people expect on Ethereum. This piece breaks down Ordinals, inscriptions, and the emergent BRC-20 token standard — how they work, why they matter, and what to watch for. No fluff. Clear definitions, practical steps, and realistic caveats.
Start with a quick premise: Ordinals put data directly onto Bitcoin satoshis. That single idea changes the tradeoffs of permanence, cost, and decentralization. The details matter, because they explain why an NFT on Bitcoin isn’t the same animal as an ERC-721 on Ethereum.
Ordinals and Inscriptions — the basics
Ordinals is a system that numbers every satoshi in circulation and permits attaching arbitrary data to specific satoshis. Those attachments are called inscriptions. In short: Ordinals treat satoshis as carriers for data, and inscriptions are what we usually call “NFTs” on Bitcoin.
Technically, inscriptions live inside Bitcoin transactions by encoding data in witness (SegWit) or Taproot fields, which makes them part of the chain’s history and therefore immutable. That permanence is attractive — you get a lot of finality — but it also means block-space usage changes. Expect larger transaction sizes and higher fees when the network is busy.
How BRC-20 fits in
BRC-20 is a speculative, token-like standard inspired by the ERC-20 idea. It uses JSON blobs inscribed via Ordinals to encode minting and transfer logic in a very lightweight way. There’s no smart contract execution on Bitcoin; instead, the standard relies on off-chain interpretation of those inscriptions and coordinated transactions to simulate token behavior.
Important distinction: BRC-20 tokens are not native, stateful on-chain tokens in the way ERC-20 tokens are. Their “state” — who owns what — is determined by reading inscriptions and transaction history through off-chain indexers. That makes wallets, explorers, and indexers critical infrastructure for the system to function coherently.
Practical experience: wallets, minting, and discovery
If you’re experimenting, pick a wallet that understands Ordinals and BRC-20 semantics. Wallets that index inscriptions and present them to users make life a lot easier. For a simple starting point, consider the unisat wallet — it’s widely used in the Ordinals community and supports inscription management and BRC-20 interactions out of the box. You can find it here: unisat wallet.
Minting an inscription is straightforward in concept: include the data payload in a transaction and broadcast it. In practice, it involves encoding the payload correctly, making sure fee calculations cover the larger transaction size, and using a wallet or service that will propagate the transaction. Expect to pay more in busy times; large images and files increase costs linearly with their size.
Why people care — and why some worry
People are attracted to Bitcoin-based NFTs for durability and ecosystem effects. Bitcoin’s security model and large miner base give inscrpitions a kind of permanence that some collectors value highly. There’s also cultural cachet: owning an early or notable inscription on Bitcoin feels different from owning the same thing on a newer chain.
On the flip side, there are tradeoffs. Data-heavy inscriptions bloat the UTXO set and increase resource requirements for nodes if not managed carefully, which leads some in the Bitcoin community to raise legitimate concerns about long-term costs and centralization pressure. Market participants also rely on centralized indexers — a fragile point if one service stops operating or changes policy.
Common workflows and best practices
Here are practical tips for creators, collectors, and developers:
- Keep payloads efficient. Compress images or host large media off-chain and inscribe references instead of full files when appropriate.
- Use established tools. Wallets and indexers that already support Ordinals reduce operational friction and risk.
- Plan fees. Larger inscriptions = larger transactions = higher fees. Queue accordingly if you want lower costs.
- Verify infrastructure assumptions. If a project’s ownership model depends on a particular indexer, consider redundancy or open-source alternatives.
- Understand permanence. Once inscribed, the data is part of Bitcoin history. That’s powerful — and irreversible.
Developer considerations
From a developer’s perspective, building around Ordinals and BRC-20 means embracing an architecture where “on-chain state” is observed rather than executed. Indexers read inscriptions and construct token ledgers; wallets and marketplaces interpret those ledgers to show balances and transfer capabilities. This leads to some architectural patterns:
- Event sourcing mindset — treat inscriptions as immutable events and build state via replayable processing.
- Robust parsing — inscriptions can be malformed or ambiguous; defensive parsing is a must.
- Interoperability focus — standardize how your service talks to popular indexers and wallets to make UX predictable.
FAQ
Are Bitcoin NFTs better than Ethereum NFTs?
“Better” depends on what you value. Bitcoin inscriptions are highly permanent and secure due to Bitcoin’s consensus properties. Ethereum NFTs tend to offer richer programmability and lower friction for certain DeFi integrations. Each has tradeoffs: permanence and simplicity vs. programmability and tooling.
Can BRC-20 tokens be stolen or lost?
Yes. Ownership ultimately depends on controlling the UTXOs carrying inscriptions and on how wallets and marketplaces interpret ownership. If you lose your private keys, you lose access to anything associated with those UTXOs. Also, because BRC-20 relies on off-chain indexers, discrepancies or bugs in indexing can cause perceived ownership errors until reconciled.
Is minting expensive?
Minting cost scales with the size of the inscription and current network fees. Small text inscriptions are cheap; high-resolution images and files cost more. Monitor mempool activity and use batching strategies when appropriate to amortize costs.
The Ordinals and BRC-20 story is still unfolding. Expect experimentation, some flawed projects, and a few genuinely innovative uses that reshape how people think about digital ownership on Bitcoin. Watch the developer tools and indexer landscape closely — they will determine whether these standards grow into durable ecosystems or remain niche curiosities.
For newcomers, start small: explore inscriptions, follow reputable indexers, and use wallets that expose the underlying UTXO data so you can verify ownership yourself. The learning curve is real but manageable, and the fundamental idea — making tiny pieces of Bitcoin carry meaningful data — is a simple one with surprisingly broad consequences.