1 Bitcoin = 1 Bitcoin - or does it? With the rise of Ordinals and BRC-20 tokens, we’ve seen an explosion of different projects and tokens being launched. Satoshis can be thought of as the pennies, and Bitcoin as the dollar. They are tiny fractions of a Bitcoin that in total (100 million) make up 1 full Bitcoin. Ordinals and BRC-20 tokens essentially allow you to inscribe new information on those satoshis, as if you were etching each penny with something unique.

Some people think it’s innovative, others think it’s distracting - but one thing is for sure, people are spending a lot of money on them. Regardless of what camp you fall into, consumer demand is ultimately going to be the decision-maker for how this all unfolds. The perceived value of individual satoshis is changing, and it's changing fast.

What are Ordinals

Ordinals are a way to 'stamp' unique pieces of digital content, like an image or text, directly onto individual satoshis, which are the smallest units of Bitcoin. On November 14, 2022, there was an upgrade to the Bitcoin network called “Taproot” that made this technology possible. Basically what this upgrade did was batch together signatures and transactions in a more efficient way so that transactions could be verified faster and easier. Shortly after this update, a developer by the name of Casey Rodarmor started working on Bitcoin Ordinal Theory, which aimed to create an immutable presence of text, video, and art on-chain.

"I've been working on a numbering scheme for satoshis that allows tracking and transferring individual sats. These numbers are called ordinals, and constitute a numeric namespace for Bitcoin." - Casey Rodarmor on Ordinal Theory

Thus, the Bitcoin Ordinals protocol launched in early 2023 and we found ourselves with a whole bunch of on-chain memes, art, information, and whatever else the mind could imagine. Some of these Ordinals have been traded for pretty high prices, just last week an Ordinal from the Bitcoin Rock collection sold for nearly 3 Bitcoin. This person essentially traded 1 satoshi for 3oo million satoshis…sounds like a pretty sweet deal to me.

What are BRC-20 Tokens

Shortly after the rise of Bitcoin Ordinals, a new experimental fungible token standard was created that gave rise to a whole new era of possibilities. The BRC-20 token standard was created by an elusive blockchain analyst by the name of Domo in early March of 2023. With this came a rush of meme coins and tokens, some amassing market caps in the 100s of millions of dollars. Similar to what happened with Ordinals, this made some choice sats very valuable. 

Stats from brc-20.io

This standard was able to use the Ordinals protocol to create and transfer fungible tokens, using inscribed JSON data. Each satoshi essentially has a “serial number” on it that references when it was created. Ordinals allow users to inscribe data onto them, but they are all still unique, or non-fungible, because of that “serial number”. However, with BRC-20 tokens, you can inscribe some JSON data onto the unique sat, and then create a bunch of tokens that are the same, or fungible, to then be traded.

Rare Sats

Amongst the blockchain wanderers there lies a group of elite treasure hunters - the sat hunters. These individuals hunt for rare sats hidden in the on-chain jungle of the Bitcoin protocol. The rarity of these satoshis, as classified by the Rodarmor Rarity Index, depends on factors like their position in the blockchain and historical significance. Rare satoshis include those mined right after significant events like Bitcoin halvings or difficulty adjustments, with categories ranging from uncommon to mythic. 

Below is an example of these classifications:

  • common: Any sat that is not the first sat of its block
  • uncommon: The first sat of each block
  • rare: The first sat of each difficulty adjustment period
  • epic: The first sat of each halving epoch
  • legendary: The first sat of each cycle
  • mythic: The first sat of the genesis block

This rarity not only makes them collectible but also potentially increases their value.

Final Thoughts

While the fundamental principles of Bitcoin still remain the same, the introduction of these innovations has added a layer of complexity and possibility. These developments suggest a shifting landscape in Bitcoin's utility and perception. They are a new kind of liquidity blossom - sprouting from the roots of Bitcoin and powered solely by the energy of consumer perception. We are the energy, the Sun, and we are the ones that will determine whether this blossom turns into a mighty oak tree - or falls withered back from whence it came.

In closing, yes 1 Bitcoin still = 1 Bitcoin, but the perceptual value of the satoshi has taken an interesting turn. People now have the ability to inscribe a piece of themselves onto the Bitcoin blockchain. Inscription #661, titled “I existed”, is inscribed with the voice recording of a man called Dan who speaks philosophically in an autobiographical tone about his existence, in hopes of preserving this information for future civilizations. Could Bitcoin be the next Library of Alexandria, an impenetrable record keeper of information, while still being the best solution to modern peer-to-peer transactions to date? Who knows, but it’s pretty damn cool that we even get to ask that question in the first place. 

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