KoinlyticsIn January 2023 Casey Rodarmor released the Ordinals protocol, a way to serial-number every individual satoshi in existence and inscribe arbitrary data on them. The result: Bitcoin now permanently hosts millions of images, text files, and audio clips, and it has generated hundreds of millions in transaction fees for miners.
Ordinal theory
Every satoshi in existence has an ordinal number based on the order it was mined. Sat #1 was in the genesis block coinbase. Sat #2100000000000000 was minted years later. The theory assigns identity to each sat without any protocol change to Bitcoin.
Inscriptions
Data is inscribed on a specific sat using the witness section of a Taproot transaction (activated November 2021). The inscription payload (JPEG, text, audio, up to ~4MB) is embedded in an "envelope" script that Bitcoin nodes see but do not execute. The sat carrying the inscription can then be transferred like any other.
Why this matters
- Bitcoin block space demand exploded in 2023-2024 from inscriptions. Some blocks were 100% Ordinals, no monetary transactions.
- Fees for regular payments spiked periodically.
- Miners saw meaningful fee revenue for the first time since 2021.
What got inscribed
Millions of images (mostly PFPs and pixel art), text collections (all of Bitcoin's whitepaper, Wikipedia dumps), audio clips, JavaScript games. Roughly 70M inscriptions have been made cumulatively.
Cultural split in Bitcoin
Some Bitcoiners view Ordinals as spam that clogs blocks and violates Bitcoin's monetary purpose. Others see it as a legitimate fee-market experiment that pays miners as the block subsidy shrinks. The debate has divided long-standing communities.
What Ordinals enable next
BRC-20 tokens are built on Ordinals (inscription-based fungibles). Runes and Taproot Assets provide different, non-Ordinal ways to issue fungibles on Bitcoin. See the Runes chapter for the alternative direction.