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Bitcoin NFTs … Again ✌️

Tracking the explosion of activity around Bitcoin NFTs!
William M. Peaster William M. Peaster Feb 9, 20237 min read
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Bitcoin NFTs … Again ✌️

Dear Bankless Nation,

As you may recall, a week ago I wrote a primer on the rise of Bitcoin NFTs titled, you guessed it, Bitcoin NFTs.

I wrote that guide because I saw interest and activity around Bitcoin NFTs starting to go parabolic.

Since then, activity levels have only continued to pick up steam, leading to an astonishing burst of mint events:

In today’s post, I wanted to follow up on my previous 101 guide by showing you some more important things to keep an eye on as Bitcoin NFTs keep booming! Let’s dive in.

-WMP


The Bitcoin NFT Craze Continues


📈 A refresher on Bitcoin NFTs

A 101 recap on last week’s article:

  • The Bitcoin community is grappling with the rise in Bitcoin NFT mints after the launch of Ordinals, a protocol that converts individual satoshis into non-fungible digital artifacts.
  • Ordinals has been met with criticism from some hardliner Bitcoiners, but is hailed by others as potentially revolutionary for the future of Bitcoin's NFT scene.
  • New NFTs are driving up transaction fee revenues for Bitcoin miners, potentially indicating a future where cultural activity supports the network.
  • Ordinals is centered around a new mechanism called Inscriptions, which are digital artifacts native to the Bitcoin blockchain and can be traded, bought, and sold.
  • Inscriptions are stored entirely on the Bitcoin blockchain, making them forever retrievable and x7 cheaper to mint than onchain Ethereum NFTs.
  • Onchain Bitcoin NFTs are becoming more popular in the Bitcoin ecosystem, driven by the need for a teeming blockspace market to secure the network as the BTC block subsidy decreases.
  • Ordinals is seen as a step in the direction of a teeming blockspace market on Bitcoin, despite opposition from some hardliners.

👛 Your first Bitcoin NFT wallet: yay or nay?

Admittedly, the Ordinals Bitcoin NFT scene is super early on, so the UX to actually collect Bitcoin NFTs is understandably primordial and not very friendly right now.

With the raging activity we’ve seen in this new albeit primitive Bitcoin NFT surge, I fully expect a handful of practical “Bitcoin NFT wallets” and “Bitcoin NFT marketplaces” to pop up in short order.

Until then, though, any of us who are interested have to deal with the early frontier realities of collecting the first Ordinals. I’m personally sitting back until UIs get slicker, but if you’re more of a vanguard type and are keen to dive in asap, check out this guide to start collecting Bitcoin NFTs in the here and now from my friend Gökhan (who’s not far from the recent earthquake disaster zones in Turkey, so please consider donating some crypto to the ongoing relief efforts there).


🤯 These BTC fees are no joke

In my previous Bitcoin NFTs article, I noted how Bitcoin’s decreasing block subsidy would eventually pose an existential crisis for Bitcoin if a thriving, organic blockspace market didn’t take hold on the chain.

Funnily enough, the rise of Bitcoin Ordinals NFTs is the first such indication in recent memory that such an organic blockspace market may actually come to be, and it’s entirely through the newest Bitcoin-native version of NFTs.

Additionally, since my last post on the topic the amount of NFT-driven fees Bitcoin miners are earning has only continued to uptrend, to the point that now Bitcoin NFTs are not only an interesting curiosity but a non-trivial economic reality for the contemporary Bitcoin chain.

Personally, I think Bitcoin should move to Proof-of-Stake (PoS) consensus like Ethereum for it’s environmental-friendliness, and until then I personally think Bitcoin and Bitcoin NFTs will remain “off course,” so to speak.

But if anything I can certainly appreciate the irony of NFT tech revitalizing Bitcoin in 2023. And I do support these experimentations because they represent the boldest opportunities yet to break Bitcoin out and evolve it from the grips of the “old guard” hardliner Bitcoin OGs, many of whom think Bitcoin NFTs are spam and have been anti-progress presences in the cryptoeconomy for years now.

Maybe, just maybe, if this new wave of more experimental Bitcoiners can break through we can see a PoS Bitcoin chain one day, and so on and so forth. With culture comes evolution and progress, who would’ve thought?


🚨 Be careful with Emblem Vault Bitcoin NFTs

As NFT archeologist Adam McBride notes in the thread above, Emblem Vault is a decentralized solution for locking assets on one chain in order to trade them as NFTs on another.

In practice, this means we’ve seen Emblem Vault come to be the early solution of choice for trading non-Ethereum NFTs on Ethereum, e.g. Rare Pepes. If you don’t want to trade over-the-counter through spreadsheets right now, then Emblem is an onchain alternative.

All that said, we’re now starting to see the first Ordinals Bitcoin NFTs appearing in Emblem Vault, so before you YOLO in with your ETH make sure you know exactly what you’re doing and what you’re dealing with.

For example, McBride warns that someone could use a totally bogus “Bitcoin NFT” to underpin an Emblem Vault, so you have to be vigilant and be meticulous if you are trying to trade these tokens right now in these early days. If you don’t have a trusted intermediary or escrow system, just wait or you could get burned.


🧙 Collection of note: Taproot Wizards

Spearheaded by Bitcoin OG and renowned crypto troll Udi Wertheimer, Taproot Wizards is a new Bitcoin NFT collection that is fostering and rallying the first lively Bitcoin NFT community around.

Again, maybe UX right now is still too primitive for some of us to jump into the Bitcoin NFT scene, but regardless Taproot Wizards is a community experiment worth tracking as it’s one of the first cultural hubs we’ve seen sprout up around Ordinals.


🏆 The first Bitcoin NFT grails?

Dotta, the CEO of the Forgotten Runes Wizard’s Cult NFT collection on Ethereum, has been diving deep into Bitcoin NFTs in recent days. In the thread above, he lists out some of the “NFT grails” he thinks exists within the first 1,000 Bitcoin NFT inscriptions.

Of course, these are just Dotta’s subjective views. At the same time, though, sometimes to some collectors earliest is what matters most, so it’s definitely worth going through this thread to learn more about the most notable early Bitcoin Ordinals NFTs. These indeed may come to be increasingly iconic over time.


💥 CryptoPunks have been migrated over

Someone has already released Bitcoin Punks, a 10k ‘Punks-inspired PFP collection created via Ordinals Bitcoin NFTs.

Again, I want to stress that trading these is best suited for advanced users right now, but nevertheless the activity is currently booming. For instance, renowned NFT collector dingaling.eth has already acquired over 200 ETH worth of these ‘Punks. If dingaling.eth and others like them are in, chances are this collection can have some considerable staying power.


🧠 The big picture

If we’re zooming out, Bitcoin NFTs are likely just a taste of what’s to come. Soon we may see Litecoin NFTs, Dogecoin NFTs, Bitcoin Cash NFTs, and so forth created in similar ways.

As this widening NFT scene unfurls, I expect “liquidity plugin” resources like Emblem Vault will become increasingly popular solutions for defragmenting the non-Ethereum NFT trading scene.

In the meantime, it’s going to be interesting to track what happens with Bitcoin NFTs. At this point I think they’ve reached cultural escape velocity and there’s nothing the hardliner Bitcoin OGs can do to stop this great NFT turn!

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William M. Peaster

Written by William M. Peaster

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William M. Peaster, Senior Writer, has been with Bankless since January 2021. Immersed in Ethereum since 2017, he writes the Metaversal newsletter on the onchain frontier, covering everything from AI projects to crypto games, as the team’s lead NFT analyst. With a background in creative writing, he writes fiction and publishes art on Ethereum in his free time. He lives in Washington.

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