In an email dated January 17, 1993, Hal Finney – a developer and early contributor to Bitcoin – shared the concept of “encrypted digital cards,” now known as non-fungible tokens (NFTs).
“As I thought a little more about the idea of buying and selling digital cash, I thought about how to present it,” Finney wrote at the time. “We buy and sell ‘cryptographic trading cards’.”
The most intriguing detail of his email is the fact that by sharing this idea, Finney wanted to make the concept of digital money easier to understand. His vision was a preview of what we saw in 2021 with the NFT boom. Overnight, the crypto space shifted from purely financial decentralization to decentralization of arts, gaming, entertainment, and more.
Hal Finney’s email on encrypted digital cards.
The once theoretical and forcefully promoted narrative has become practical and part of the everyday culture of millions of people who had never thought about buying cryptocurrencies before. And with the introduction of the Ordinals protocol in early 2023, we are witnessing the emergence of such cases.
Related: Bitcoin fragments could become more valuable than full bitcoins
However, this move is not well received by some “red-eyed guards”.
The Wizard-JPEG that started a civil war in Bitcoin
In February 2023, the Taproot Wizards achieved a remarkable feat using the Ordinals protocol. They created what was then the largest block ever recorded in Bitcoin history, reaching almost 4 megabytes in size.
Eric Wall tweets about the largest block in Bitcoin history. Source: Twitter
Their goal was clear: to challenge the existing norms and cultivate an experimental and rebellious mindset within the Bitcoin ecosystem. Since the Wizard Block, more than 14 million entries have spawned something great: a circular digital economy where assets are valued, bought, and sold through Bitcoin (BTC). (Inscriptions label sats with content, thus generating NFTs.)
Freedom, Rare Sats and Brotherhood
To illustrate the rapid pace of experimentation in this ecosystem, traders bought and sold ordinal NFTs via Google Sheets in February due to the lack of available marketplaces.
“We are experimenters in an experimental protocol. And my goal is clear: to engage, educate, entertain, and experiment with the Bitcoin blockchain,” a figure in the Ordinal ecosystem who goes by “BitGod” told me in an interview.
But within a few months, well-known companies and projects emerged and formed a framework for this market. As a result, the market saw over 140,000 unique users and over $220 billion in trading volume.
And among the experiments that have sparked this interest, one narrative has caught the attention of the general public: rare sats.
Many projects use this narrative to symbolize their artworks. For example, CTRL was the first project to annotate a “rare” satoshi.
CTRL’s tweet about the listing of the first “rare” Satoshi. Source: Twitter
“I think the image symbolizes the CTRL movement and its turning point at the time of the Rare Sat discovery,” Jameson Mah told me. “The movement is diverse, humble, cypherpunk, fresh blood and energy. CTRL literally replaces the old $2 bill representing the old, archaic systems and the diamond of the rare SAT inscription peeking out on the back. Then Satoshi Nakamoto’s Genesis Block message that started it all is illuminated by the light of power of the rare sitting at the center. It’s non-violent, but also clearly rebellious.”
Related: Bitcoin ETFs: Even worse for crypto than centralized exchanges
Currently, only eight rare sats have been found that are similar to those used by CTRL in their artwork. And one of them put up a $600,000 bid in an auction. The other is Gansy, the founder of the Rare Satoshi Society. He announced that RSS has already generated over $2.5 million by providing specific attributes for Satoshis to more than 100 Ordinals projects. Aiming to maintain their status as the market’s leading provider of rare sats, his team has already transacted over $3 billion in BTC in search of the gems that make up their current portfolio.
There are several other experiments that are bringing a breath of fresh air to the Bitcoin ecosystem. Use cases of prominent ordinals that deserve exploration include BRC-20, bitmap, and recursive inscriptions.
What to Expect from Bitcoin Season 2?
It is crucial to recognize ordinals as a movement that greatly complements Bitcoin’s success. The success of the ecosystem does not depend on a single solution, but on the combination of different factors that contribute to its prosperity.
In certain cases, such as Argentina, the adoption of Bitcoin will be out of necessity. For others, it will come from their fascination with the underlying principles of Bitcoin. Institutional acceptance from ETFs will contribute a significant portion of the adoption curve. In addition, the advent of ordinals applications will bring a dual benefit to the network, as it fuels both adoption and ecosystem infrastructure development.
“My first expectation is that there will be many projects experimenting with bitcoin,” Mah said, adding, “Next, with this renewed interest, the network will be much more expensive to use. Therefore some of these activities should logically be moved to level 2. For example, many developers are already experimenting with a rollup architecture on top of Bitcoin.”
Concluding, Mah said, “Given the hype, it’s important to always look for true innovation, substance, and creativity — and most importantly, bitcoin-native thinking.”
Lugui Tillier is Chief Commercial Officer of Lumx Studios, a Web3 studio whose investors include BTG Pactual Bank, the largest investment bank in Latin America. Lumx Studios has previous Web3 cases with Coca-Cola, AB InBev, Nestlé and Meta.
This article is provided for general informational purposes and is not intended and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect the views and opinions of Cointelegraph.
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