NFTs are a type of token that are unique and provably non-fungible, meaning that they cannot be exchanged for something of equal value. NFTs on the Ethereum network are minted, creating a brand new token on the blockchain. However, the Ordinals model is different, as it involves inscribing data on to existing Sats, which are the smallest legible fragment of a bitcoin. This approach has made them a controversial addition to the crypto space, as it makes the inscribed Sats non-fungible, essentially removing them from the interchangeable financial circulation. This concept is abhorrent to many Bitcoin maximalists who see it as a purely financial resource and structure.
While the concept of Ordinals is intriguing and has the potential to revolutionize the way we think about digital assets, it is still too early to say how this will pan out. The technology and infrastructure are exclusive, unestablished, and relatively untested, making it inherently risky. Moreover, at the moment, only Bitcoin node owners can make Ordinals, making the barriers to entry high from both a technical and financial viewpoint.
Additionally, there is little to no infrastructure for buying and selling Ordinals, with one commentator describing the process of purchasing them similar to a ‘post-apocalyptic barter town’. In contrast, other types of NFTs on networks such as Ethereum already have established marketplaces (Opensea and Blur) and user base, making them a less risky investment opportunity.
Despite the potential risks of investing in Ordinals, the emergence of NFTs on the Bitcoin network highlights the versatility and potential of blockchain technology beyond finance. W3S group will be cautious for now and see how the world of NFTs continues to evolve to see how they will transform the ever changing world of tokenization.
At W3S group, we understand the importance of digital diversification and can help you navigate the world of cryptocurrency and NFTs. Our team of experts can provide you with the knowledge and tools you need to build a diversified portfolio that meets your investment goals. To learn more about how we can help you, visit our website at https://w3s.group.