At the start of 2023, Bitcoin Ordinals became a sensation. Redlion explained the phenomenon, and the tech behind it, in February. Since then, there’s been a huge explosion of Ordinal inscriptions (aka minting of these NFTs). Major web2 brands and web3 power players have entered the Ordinal market. And then, barely more than a month ago, an entirely new BTC NFT entered the arena: Bitcoin Stamps. This new tech claims to be “the most permanent” NFT in the industry… is it? Will Ordinals still be a thing months and years from now? Let’s dive into the state of BTC NFTs.
Ordinals are going strong thanks to big brands. In the two months since we last reported on Ordinals, Yuga Labs dropped Twelve Fold, DeGods created an Ordinal collection, and even Bugatti announced an Ordinal collab with Asprey Studio. These are just a few of the many new projects being hosted on BTC. In fact, there are already well over 900,000 total ordinals in existence! Heavy-hitting branded pieces stand in contrast to the original meta of Ordinal collection. Essentially, early collectors were clamoring to grab low-numbered inscriptions for their perceived rarity. In other words, people didn’t care about the art or anything particular about the Ordinals they were buying; what excited the collectors was getting the 69th or 4,269th Ordinal ever inscribed! Now speculation on these types of assets is based on what the brands can do for the project’s value. While the likes of Yuga’s and DeGods’ BTC NFTs are very likely to retain their value, one of the selling points of Ordinals–that their metadata is all on-chain–has come under fire from a new upstart type of Bitcoin-native NFT: Stamps.
There’s a new protocol in town: Bitcoin Stamps 📮— Trust Machines (@trustmachinesco) April 4, 2023
They’re a new way of storing images directly on Bitcoin, but they’re very different from Ordinals.
Here’s why their transactions look like this 👇
Secure Tradeable Art Maintained Securely, aka Stamps, are the brainchild of Mike in Space!, a pseudonymous developer. The idea behind creating these NFTs was as a response to the misleading claims of Ordinal enthusiasts. Many collectors called inscribed Satoshis as perfectly immutable due to their on-chain metadata. In fact, Ordinals CAN be “pruned” by full nodes from Bitcoin’s blockchain. This is because the data for Ordinals is written in the Witness space of transactions… and full nodes can clip out Witness data. Thus, the on-chain image data for an Ordinal could be removed, or essentially deleted from Bitcoin. This is where the Stamps innovation comes in.
Sometimes people gripe about the constraints of STAMPS. I actually love it!— Mike In Space! (@mikeinspace) April 11, 2023
Constraints fuel creative new approaches to art that you wouldn't otherwise see.
The goal isn't to make STAMPS "larger".
The Medium is the Message. https://t.co/GGbRKFZfky
Using existing technologies, like the Rare Pepe-enabling Counterparty, Stamps create a BTC NFT on Bitcoin's blockspace. The protocol creates a bundle of mini-transactions (several UTXOs if you’ve studied BTC) which point to the Stamp owner’s wallet. The sum of the data within those several transactions is the metadata of the Stamp image. How is this better than an Ordinal? The fragmented Stamp data in written on the blockspace and not the witness space of Bitcoin blocks. This makes it essentially impossible to prune. The fragmenting of data gives a layer of decentralization that also makes it harder to remove the Stamp from blocks.
BTC Stamps are growing faster than Ordinals— trevor.btc @ NYC (@TO) April 4, 2023
Makes most sense for semi-fungible tokens, aka ERC-1155 equivalent on BTC pic.twitter.com/wjeom4nmzj
There are some disadvantages to Stamps, most notably cost. Block data is much more expensive to utilize than witness data. Thus, Stamps are more expensive than Ordinals. This is why many stamps are limited to 8 bit 24x24 pixel pieces–they look even shittier than web3’s beloved CryptoPunks! Another disadvantage is that this new asset class is copying the early Ordinals meta: people are obsessed with getting “early” stamps. This seems like a fad narrative that is likely to bubble up and then burst down. Lastly, and in obvious comparison to Ordinals, Stamps don’t have marketplaces, wallet compatibility, or much in the way of infrastructure at the moment. There is talk of OpenSea gaining Stamp compatibility in the near future… but until then, creating, buying and trading Stamps is sketchy.
9/— Trust Machines (@trustmachinesco) April 4, 2023
Given the much higher cost, Bitcoin Stamps recommend an image size of 24x24px with 8-bit color depth of PNG or GIF, similar to CryptoPunks.
But constraint brings creativity! pic.twitter.com/fGdNPNVOew
Ordinals and Stamps have certainly made Bitcoin interesting again! While Stamps have FUDed the on-chain security of Ordinals, most analysts agree that the mass-pruning of Ordinals is unlikely. Stamps HAVE taken one thing from Ordinals, though–Ordinals are no longer the newest shinest object on the block! Caveat Emptor: If you’re going to ape into Stamps, do some thorough research! Take the time to assess the credibility of anyone with whom you will trade OTC. Stay safe, Anon!