People who enjoy collecting special things are always on the lookout for unique items to add to their collections. Just like some collectors consider CryptoPunks to be the ultimate treasures in the world of digital art, there are also highly valued artworks called Chromie Squiggles that are admired by generative art collectors. When it comes to collecting Bitcoin Ordinals, a fascinating type of collectible are the rare satoshis, also known as "sats," which I personally find to be incredibly appealing.

These rare sats are becoming highly sought after by collectors, some of these sats that are uninscribed trade for minimally $1,500 USD (at the time of writing this article) while ordinals inscribed on rare sats trade for even more. Now, let's explore the different levels of rarity that exist among these collectibles.

Common Sats

First, we have the Common Sats. These are any sats that aren't the very first sat of their block. There are quite a lot of them, with a current supply of 1.9 quadrillion, and a total supply of 2.1 quadrillion.

Pizza Sats

Next, we have Pizza Sats. These are sats from the first ever commercial Bitcoin transaction on May 22, 2010 where Laszlo Hanyecz bought two supreme pizzas from Papa John's for a whopping 10,000 BTC. This day is known and celebrated as “Bitcoin Pizza Day”.

Uncommon Sats

Moving on, we have the Uncommon Sats. These are the very first sats of each block. They're significantly more special than the Commons, and still affordable, for now. Right now, there are 745,855 of them in existence, and the total supply is 6,929,999. However, due to the fact that many wallets that hold uncommon sats have been inactive for years, its safe to assume that there are only about 30,000 uncommon sats in circulation. With so few in circulation and literally quadrillions of total satoshi’s uncommon sats are insanely rare.

Rare Sats

Now, we have the Rare Sats (yes “rare” is also a tier of rarity). These are the first sats of each difficulty adjustment period. They're even rarer and more sought after. At the moment, there are only 369 of them, and the total supply is 3,437. These trade for around 3 BTC at the time of writing this article.

Epic Sats

Then, we come to the Epic Sats. These are the first sats of each halving epoch. They're extremely rare and highly prized by collectors. Currently, there are only 3 of them, and the total supply is 32.

Legendary Sats

Following that, we have the Legendary Sats. These are the first sats of each cycle. They're exceptionally rare and hold immense value. There are currently none in existence, and there will only be a total supply of 5.

Mythic Sats

Finally, we reach the most extraordinary of them all, the Mythic Sats. These are the first sats of the very first block, called the genesis block. They're one-of-a-kind and truly mythical. There is only one of them, and there will ever be only one.

So, as you can see, rare sats come in different levels of rarity, each more unique and special than the last. Collecting them is like embarking on a thrilling adventure through the history of the blockchain!

Where can I find rare sats?

As the Bitcoin Ordinal ecosystem has begun to mature developers have done what they do best, build, here are a couple of websites which are incredibly useful for detecting if you have a rare sats in your wallet.

https://ordinalhub.com/sat-scanner

https://sating.io

How do I acquire a rare sat for myself?

Currently there is no infrastructure built for buying and selling rare sats (for now), all trading is done OTC (over the counter) the same way Bitcoin Ordinals were sold OTC prior to marketplaces like Magic Eden came to market. If you are interested in inscribing an ordinal on various types of rare sats, services like SatScribe offer the ability to select from multiple types of sats to inscribe on!

Before we get into what PSBTs are, let's refresh ourselves on how a traditional transaction works on the Bitcoin network.

Generally, when sending Bitcoin from one person to another, a message is digitally, cryptographically signed, and then broadcasted to the Bitcoin network. The broadcasted signed message is then validated by network nodes and recorded on the blockchain. Once the transaction is confirmed by the network, it is included in a block.

A Partially Signed Bitcoin Transaction (PSBT) is a Bitcoin standard that allows multiple people to pass around a single unsigned transaction and sign it before broadcasting it to the Bitcoin network. PSBTs separate the creation and signing of a transaction, enabling different people to execute different parts of the transaction to be broadcasted to the Bitcoin network.

In simple terms, PSBTs allow you to virtually shake hands with someone to execute a transaction.

If you are coming from the Ethereum ecosystem, you're most likely used to interacting with a smart contract, which acts as a decentralized, trustless, 'middleman' when "virtually shaking hands" or transacting with two or more people. Since smart contracts don't exist on Bitcoin, utilizing PSBTs is a great way to transact in a trustless fashion on the Bitcoin network.

However, as is often the case when interacting with cryptocurrencies, the UX for exchanging satoshis using PSBTs is poor.

• You need to copy an unsigned PSBT into a wallet.

• Cryptographically sign it.

• Copy the signed PSBT and paste/send it to the person you are transacting with.

• They copy the PSBT into their wallet, sign the other side of the transaction, and broadcast it to the Bitcoin network.

How are PSBTs used in Ordinal Marketplaces?

Bitcoin Ordinal marketplaces like OpenOrdex take advantage of PSBTs to enable users to buy, sell, and trade ordinals. You can learn more about Bitcoin Ordinal marketplaces and how they work by checking out my post here.

Marketplaces can significantly benefit the Bitcoin Ordinal ecosystem by providing a more accessible, efficient, and transparent trading environment for collectors and flippers. By facilitating peer-to-peer (p2p) transactions and enabling price discovery, marketplaces can increase liquidity and reduce volatility in the market. Additionally, marketplaces can help to break down barriers to entry and promote innovation in the space by creating more opportunities for developers, investors, and bitcoin enthusiasts alike, to participate in the ordinals ecosystem.

Unlike Ethereum, there are no smart contracts on the Bitcoin network.

So, how do Bitcoin Ordinal marketplaces work?

When you list an ordinal for sale, on a marketplace like OpenOrdex, what you are actually doing behind the scenes is posting a Partially Signed Bitcoin Transaction (PSBT) and waiting for a buyer to meet the listed price. Once the transaction parameters are met, the listed price is sent to the seller’s wallet, while the ordinal goes to the buyer’s. With a marketplace like OpenOrdex, your ordinal never leaves your wallet until the transaction is finalized, broadcasted, and mined into a block.

Marketplaces

Open Source

https://openordex.org/

Closed Source

https://magiceden.io/ordinals

https://ordinalswallet.com/collections

https://ordswap.io/

https://ordina.ls/

https://beta.ordx.io/

• Hot wallets are online wallets that are connected to the internet and can be accessed through various devices, including smartphones and laptops. They are more convenient and easier to use, but are also more vulnerable to hacking attempts.

• Cold wallets are offline wallets that provide a higher level of security, as they are not connected to the internet. They are typically hardware devices, like USB sticks, that store private keys, making them a popular choice for long-term storage of large amounts of Bitcoin.

Here are some popular Bitcoin wallets, both hot and cold, that people can use to manage their Bitcoin Ordinals holdings.

Cold Wallet (most secure)

• Ledger

Hot Wallet (open-sourced)

• Sparrow

• Unisat.io

Hot Wallet (closed-source with slick UI)

• Ordinals Wallet

• Xverse

• Ordswap

• Generative.xyz

1 Bitcoin = 100 million satoshis 1 ETH = 1 billion gwei 1 USD = 100 cents 1 Bitcoin = $23,600 1 Satoshi = $0.000236

What are “sats”?

“Sats” is shorthand for “satoshis”. When you see people say “stack sats” that means “stack satoshis” aka, buy more Bitcoin, as 100 million sats equals 1 Bitcoin.

What is an ordinal?

According to the official documentation definition, an ordinal is a way of assigning individual identities to each satoshi. This means that each satoshi can be tracked, transferred, and given meaning.

To put it simply, ordinals make it possible to track and distinguish between each satoshi, like a unique NFT.

Who invented them?

Casey Rodarmor, a developer in the Bitcoin community, invented the concept of Bitcoin ordinals.

https://twitter.com/rodarmor/status/1593162864340369408?s=20

https://github.com/casey/ord

Here's how it works:

When you create a Bitcoin transaction, there are several pieces of data that make up that transaction. Ordinals assume that a transaction takes funds from multiple inputs (sources of funds), and directs them towards multiple outputs (destinations of funds). Funds go into the transaction on a first-in, first-out basis.

For example, if a transaction has inputs of [2, 3] satoshis and outputs of [1, 2], the first satoshi of the first input would be presumed to go to the first output, and so on.

There are different types of transaction outputs, which are spendable using different mechanisms.

• pay-to-public-key (p2pk, never used these days)

• pay-to-public-key-hash (p2pkh)

• pay-to-script-hash (p2sh)

• pay-to-witness-script-hash

• pay-to-taproot… (and some others)

It’s worth noting that Bitcoin transactions are just a collection of inputs and outputs. Because of that, in a single transaction, you can have multiple senders and multiple receivers in a Bitcoin transaction.

Okay, lets dumb that down…

When you want to send money using Bitcoin, you create something called a "transaction". A transaction is made up of different pieces of information that tell the Bitcoin network where to take the money from and where to send it to.

Let's say you want to send some Bitcoin to two different people. To do this, you need to give the Bitcoin network some money to work with. This money comes from "inputs", which are like buckets that hold your money. You might have one input bucket with 2 coins in it, and another input bucket with 3 coins in it.

When you create the transaction, you also tell the network where to send the money to, which are called "outputs". For example, you might want to send 1 coin to your friend Alice, and 2 coins to your friend Bob.

Now here's the important part: when the Bitcoin network creates the transaction, it takes the money out of your input buckets one coin at a time, in the order that you received them. So the first coin that went into your input bucket with 2 coins would be the first coin that comes out of it.

In our example, the Bitcoin network would take the first coin from your first input bucket (with 2 coins) and send it to Alice (the first output). Then it would take the second coin from your first input bucket and send it to Bob (the second output). Finally, it would take the third coin from your second input bucket (with 3 coins) and send it to Bob (the second output).

Let’s get a little technical…

Ordinals introduce a new concept of storing arbitrary data in the blockchain. Unlike using OP_Return outputs, people are using data stored in taproot scripts because it's cheaper to pay the fees for it, thanks to the vbyte discount.

Well… what is a vByte?

vBytes, also known as vsize, v meaning “virtual,” are used to decide how much block weight needs to be allocated to confirm a transaction on the Bitcoin network.

So, what is Taproot?

Taproot is an upgrade to Bitcoin that introduced several new features. It integrated the Schnorr digital signature scheme into Bitcoin, upgrading Bitcoin's core cryptography, and built on the Segwit upgrade to improve Bitcoin's privacy and lower transaction fees.

1 Bitcoin Block = 1mb 1 Bitcoin Block After Taproot Upgrade = 4mb

And, what is Segwit?

Segregated Witness (Segwit) is a change in Bitcoin's transaction format where the witness information was removed from the input field of the block. This was done through a “soft fork” on the Bitcoin network. The main purpose of it was to allow for more transactions to be stored in 1 block.

Back to inscribing sats…

The content model of an inscription is akin to how html renders content on a website. An inscription consists of a content type (like jpg, png, gif) and the content itself, which is a byte string. When you inscribe a satoshi, the inscription content is stored completely on-chain. NFT enthusiasts from the Ethereum ecosystem are enticed by the novel native on-chain nature of Bitcoin as many NFTs on Ethereum are just tokens that point to a URL of an image stored in decentralized storage like IPFS or Arweave.

Inscription content is entirely on-chain, stored in taproot script-path spend scripts. These scripts have very few restrictions on their content and receive the witness discount, making inscription content storage relatively economical.

Using ordinals, you can inscribe data into satoshis, which some consider to be like creating a Bitcoin NFT.

These inscribed sats can be transferred from one wallet to another using regular Bitcoin transactions. Ordinals are held in Bitcoin UTXOs. Transactions, addresses, and UTXOs are normal Bitcoin transactions, with the exception that in order to send individual sats, transactions must control the order and value of inputs and outputs according to ordinal theory.

Um, what’s a UTXO?

A UTXO is an unspent transaction output, essentially a Bitcoin that was spent by one person and sent to another, meaning that the same UTXO cannot be spent multiple times.

Technically, you could add as many inscriptions to the same satoshi as you’d like because every transaction that "moves" it could be using an inscription. However, due to the dust limit, you're pretty much adding the inscription to at least 5,600 (or something like that) satoshis at a time.

However, the standard at the moment on what is considered to be a Bitcoin NFT, or a “legit ordinal”, is that the ordinal must be the genesis inscription in a satoshi. Some collectors value lower inscription numbers over later inscription numbers.

For instance inscription #8,575 may be deemed more valuable than inscription number #68,467. Owning an ordinal with an inscription number in the <100, <1,000, <10,000, <100,000 clubs may have different values based on “rarity”. The rules around what is valuable, and what is not, is very much subjective.

In conclusion…

Ordinals are just a way of pretending that satoshis are discrete and non-fungible, but if people agree that they are, and have some sort of value, then they do.

At the end of the day, it’s just folks having fun.

I hope this helps!

Follow me on Twitter @NFTSupply

Collect your first ordinal Checks - Bitcoin Ordinal Edition