Recently, Yuga Labs, the parent company of Bored Ape Yacht Club (BAYC), launched a Bitcoin-based NFT series called TwelveFold. A total of 3,246 people participated in the auction, generating 735.7 BTC (approximately $16.5 million) and sparking a new wave of Bitcoin NFT hype.

As we all know, previous NFTs, such as BAYC and CryptoPunks, were mostly based on Ethereum. So what is this Bitcoin-based NFT all about? This all comes down to the Ordinals protocol. Since its launch in this January, Bitcoin NFTs and Ordinals have attracted great attention. Ordinals allows users to write data such as images, text, videos, and audio into satoshis (the smallest unit of Bitcoin, with each representing one hundred millionth of a Bitcoin), enabling people to own NFTs on Bitcoin similar to those on Ethereum.

1. Assign a serial number to each satoshi and track these satoshis when they are spent. These serial numbers are large numbers, such as 804766073970493 mentioned in the whitepaper.

2. Support the attachment of arbitrary content to individual satoshis to create unique Bitcoin-native digital items called inscriptions (also known as NFTs by the public). Thus, it enables the "minting of NFTs" on Bitcoin.

Initially, "minting" Bitcoin NFTs could only be done by people running Bitcoin nodes. Now there are some codeless platforms like Gamma that make it easier for users to mint NFTs. However, overall, tools for minting Bitcoin NFTs are still in a very early stage. In the beginning, most Bitcoin NFT transactions were conducted OTC, such as Bitcoin Punks trading without NFT markets like OpenSea or Blur. Currently, there are also wallets that allow for direct trading, such as Ordinals Wallet and Hiro, making transactions more convenient.

Since the release of Ordinals, more and more people have started "minting" Bitcoin NFTs, such as Bitcoin Punks, which was the first to bring CryptoPunks to Bitcoin, Bitcoin Rocks, Ordinal punks (many of which are more expensive than CryptoPunks) paying homage to CryptoPunks, and TwelveFold recently launched by BAYC. Initially, most of the attention was on new blue-chip projects or copied projects.

We can see on Dune that there are currently over 460,000 NFTs successfully minted on Bitcoin using Ordinals, and the number is growing very rapidly. According to Galaxy Digital's analysis, the Bitcoin NFT market will be worth $4.5 billion in two years.

What is the future development of NFTs? I have summarized three differences:

1. Data storage and modification: all Bitcoin NFTs are stored on the Bitcoin chain and are immutable; whereas, most traditional NFTs are stored off-chain, such as on IPFS and Arweave, or even on traditional centralized cloud servers such as AWS. It is difficult for non-technical users to know where traditional NFTs are stored. Additionally, some traditional NFTs can be modified and deleted by the contract owner. The indivisibility and immutability of NFTs are important factors in their value.

2. NFT transactions and portability: Currently, Bitcoin NFTs only support Bitcoin wallets, and the various ecosystems are in the very early stage, with both trading and minting being somewhat complex, and OTC transactions being the main method of trading, which causes NFT liquidity to be a major challenge (and a perennial challenge for all NFTs).

3. Community pressure faced: Currently, Bitcoin NFTs have faced some controversy within the Bitcoin community. Opponents believe that Bitcoin NFTs will rapidly increase the block size, increase the requirements for node operation equipment, reduce the number of nodes, and thus reduce decentralization. Additionally, Bitcoin NFTs may also pose challenges to some traditional infrastructure. However, positively speaking, this also provides a new catalyst for the future development of the Bitcoin network.

In summary, the birth of the Ordinals protocol has brought new possibilities to the Bitcoin network and propelled its future development. The current Bitcoin NFTs have gathered many high-value NFTs, and compared to the rarity of traditional NFTs, the rarity of satoshis has also brought a new standard reference for the value of NFTs. In the long run, this will promote the development of the Bitcoin layer-two network. From an investment perspective, in the short term, there may be speculative opportunities for some high-value Bitcoin NFTs.

Recently, Yuga Labs, the parent company of Bored Ape Yacht Club (BAYC), launched a Bitcoin-based NFT series called TwelveFold. A total of 3,246 people participated in the auction, generating 735.7 BTC (approximately $16.5 million) and sparking a new wave of Bitcoin NFT hype.

As we all know, previous NFTs, such as BAYC and CryptoPunks, were mostly based on Ethereum. So what is this Bitcoin-based NFT all about? This all comes down to the Ordinals protocol. Since its launch in this January, Bitcoin NFTs and Ordinals have attracted great attention. Ordinals allows users to write data such as images, text, videos, and audio into satoshis (the smallest unit of Bitcoin, with each representing one hundred millionth of a Bitcoin), enabling people to own NFTs on Bitcoin similar to those on Ethereum.

1. Assign a serial number to each satoshi and track these satoshis when they are spent. These serial numbers are large numbers, such as 804766073970493 mentioned in the whitepaper.

2. Support the attachment of arbitrary content to individual satoshis to create unique Bitcoin-native digital items called inscriptions (also known as NFTs by the public). Thus, it enables the "minting of NFTs" on Bitcoin.

Initially, "minting" Bitcoin NFTs could only be done by people running Bitcoin nodes. Now there are some codeless platforms like Gamma that make it easier for users to mint NFTs. However, overall, tools for minting Bitcoin NFTs are still in a very early stage. In the beginning, most Bitcoin NFT transactions were conducted OTC, such as Bitcoin Punks trading without NFT markets like OpenSea or Blur. Currently, there are also wallets that allow for direct trading, such as Ordinals Wallet and Hiro, making transactions more convenient.

Since the release of Ordinals, more and more people have started "minting" Bitcoin NFTs, such as Bitcoin Punks, which was the first to bring CryptoPunks to Bitcoin, Bitcoin Rocks, Ordinal punks (many of which are more expensive than CryptoPunks) paying homage to CryptoPunks, and TwelveFold recently launched by BAYC. Initially, most of the attention was on new blue-chip projects or copied projects.

We can see on Dune that there are currently over 460,000 NFTs successfully minted on Bitcoin using Ordinals, and the number is growing very rapidly. According to Galaxy Digital's analysis, the Bitcoin NFT market will be worth $4.5 billion in two years.

What is the future development of NFTs? I have summarized three differences:

1. Data storage and modification: all Bitcoin NFTs are stored on the Bitcoin chain and are immutable; whereas, most traditional NFTs are stored off-chain, such as on IPFS and Arweave, or even on traditional centralized cloud servers such as AWS. It is difficult for non-technical users to know where traditional NFTs are stored. Additionally, some traditional NFTs can be modified and deleted by the contract owner. The indivisibility and immutability of NFTs are important factors in their value.

2. NFT transactions and portability: Currently, Bitcoin NFTs only support Bitcoin wallets, and the various ecosystems are in the very early stage, with both trading and minting being somewhat complex, and OTC transactions being the main method of trading, which causes NFT liquidity to be a major challenge (and a perennial challenge for all NFTs).

3. Community pressure faced: Currently, Bitcoin NFTs have faced some controversy within the Bitcoin community. Opponents believe that Bitcoin NFTs will rapidly increase the block size, increase the requirements for node operation equipment, reduce the number of nodes, and thus reduce decentralization. Additionally, Bitcoin NFTs may also pose challenges to some traditional infrastructure. However, positively speaking, this also provides a new catalyst for the future development of the Bitcoin network.

In summary, the birth of the Ordinals protocol has brought new possibilities to the Bitcoin network and propelled its future development. The current Bitcoin NFTs have gathered many high-value NFTs, and compared to the rarity of traditional NFTs, the rarity of satoshis has also brought a new standard reference for the value of NFTs. In the long run, this will promote the development of the Bitcoin layer-two network. From an investment perspective, in the short term, there may be speculative opportunities for some high-value Bitcoin NFTs.