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What is Bitcoin NFT, how is it implemented, and what is its value?

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How Bitcoin NFT should be implemented and its value.

原文标题：《铁树开花？聊聊比特币 NFT 是什么，怎么实现，有什么价值？》

jason chen, do you understand the world a little better today

Recently, the bitcoin iron tree has come into a second spring, because of the ancient technical architecture design limitations of bitcoin, coupled with the status of the industry, so it is called digital gold, hoarding is right, and no one wants to improve its availability, the result of the recent unforced bitcoin NFT

Before we talk about Bitcoin NFT, I need to explain the common ethereum ERC721NFT and try to figure out how to implement Bitcoin NFT and its value

NFT tokens are non-homogeneous, so they must be unique and indivisible. These two features can be solved using integers, namely the TokenID of the NFT. Each ID is mapped to a URL that holds the metadata of the NFT, including name, description, image address, etc. With the contract as the collection boundary, a specific NFT can be retrieved layer by layer through the contract address TokenIDmetadata

FT, also known as ERC20Token, has a contract as the boundary and can set the total amount, but it is divisible and can reach the minimum of 18 decimal places. First of all, this feature is not satisfied. Of course, it can also be set to 0 decimal places or integer in the contract, which is indivisible. But the problem is homogenization, not uniqueness, because you can't control "which part" of the token I want to transfer to someone else

You give me one token, but which one is it? ERC20 doesn't care because in its eyes they are all the same, just like a dollar bill is a whole number, but it doesn't matter which dollar I pay when I pay, so ERC20 doesn't have the ability to locate the token

And I want you to continue to follow me, and this is a very important thought process, the process of trying to solve the problem and ultimately finding the answer, rather than just looking at the answer

To implement the NFT as I said, you need to have it.

1. Minimum atomization, indivisible

2. Have non-homogeneity and uniqueness, that is, can locate and specify the transfer

3. You can map metadata to describe the NFT content.

So there is a solution to the inseparability of tokens, but what about the other two?

Casey Rodarmor developed the Ordinals protocol on Bitcoin, here is a link to it:

https://docs.ordinals.com/introduction.html

Let's see how it solves these three problems so as to realize the bitcoin NFT. First of all, he also starts from how to solve the smallest atom and uniqueness, and puts forward the ordinal number (that is, the order of numbers) theory. He cleverly uses the smallest unit of bitcoin "Satoshis"

Ordinal number theory gives individual identities and allows them to be tracked, transferred, and given meaning. Satoshi is the smallest unit of bitcoin, 100 million satoshi is equal to 1 bitcoin. As for why it is called Satoshi Nakamoto, the smallest unit of EOS is Larimer, because the founder's surname is Larimer. The smallest unit of Ethereum is wei, which is a tribute to a Chinese cryptography pioneer Dai Wei. So visible his position in crypto, the Chinese light, interested in their own search to understand the deeds of Dai Wei

Therefore, it is the smallest unit that cannot be divided. How to solve the problem of uniqueness? The ordinal number is numbered from 0 according to the order in which the cong is mined. The serial number of the first cong in the first block is 0, the serial number of the second Cong is 1, and the serial number of the last Cong is 4999999999, so that each Cong has the ID attribute. Then the Cong in the transaction input is transferred to the output sats in a first-in first-out order. To achieve a directed transfer

编号方案和转账方案都依赖于顺序，编号方案依赖于挖矿的顺序，而转账方案依赖于交易输入和输出的顺序，因此整套比特币 NFT 方案叫 ordinals ordinals 包括 4 部分

1. BIP for describing ordinal schemes;

2. An index that communicates with the Bitcoin core node to track its location.

3. Wallets that allow ordinal-aware transactions.

4. A block browse for interactive blockchain exploration

This is the ordinal BIP documentation, interested can see in detail:

https://github.com/casey/ord/blob/master/bip.mediawiki

The first two problems are solved. The third metadata is how to give a numbered Cong the name, picture, and description that NFT should have.

The Inscriptions are the metadata concept of the bitcoin NFT. The contents of the inscriptions are completely in the chain and stored in the taproot script. The data format of the inscriptions is as shown in the following figure

Because the inscription is on the chain, it cannot refer to the content under the chain, so it cannot be modified, unlike Ethereum NFT which is de-indexed by IPFS or AWS under the chain, but also because there are no smart contracts and other problems, the inscription cannot support on-chain royalties. Each NFT's Cong, block, inscription and other information can be viewed in the Ordinals protocol's exclusive blockchain browser, as shown below

Crypto punks was first released in currency network of NFT project, website link: https://bitcoinpunks.com/

At present, BAYC is also considering issuing NFT in Bitcoin, regardless of the value of Bitcoin NFT. However, the digital gold status of Bitcoin is placed here, and the money-making effect is strong enough, the issuance of blue chip NFT will certainly not worry about selling

You can see the peak of Bitcoin NFT in February

The dune address of the Bitcoin NFT is as follows:

https://dune.com/dataalways/ordinals

In my opinion, due to technical limitations, the scalability and playability of Bitcoin NFT is very low. In addition, due to the high price of bitcoin, such as gas and other costs, and the small number of bitcoin owners, Bitcoin NFT does not have the scale. I am not optimistic about the development space of Bitcoin NFT

To say the least, bitcoin NFT is strange technology funny haha, blue chip NFT migration in the past to buy and collection value, but really expect to be able to come out of the original NFT issued in Bitcoin and be recognized by the public, it is extremely difficult, currently does not have the scale, and in fact, the Bitcoin community also has a polarized view on this matter, Even bitcoin fundamentalists consider the Bitcoin NFT to be evil, arguing that it completely contradicts the teachings of the Bitcoin Bible (i.e., Satoshi Nakamoto's paper) : A peer-to-peer electronic cash system and evil NFT consume the already precious bitcoin resources. I am not a fundamentalist, but I just stand on the technical and market perspective, I don't think Bitcoin NFT has imagination space. Of course, it may also be my lack of narrow cognition, only personal judgment

Finally, I think the threshold of mastering and understanding Bitcoin NFT is still very high. I read the document all morning and there are many details did not understand, although this article is not long but made me a whole 4 hours, is one of the most tired I write, according to the practice of the end of the article put a reward code, if you read the harvest, can be rewarded according to their own mood, research and writing is not easy, thank you for your support

Due to my limited knowledge and experience, the above content may have shortcomings or mistakes, please comment and discuss, do not comment if you do not like, please note that this article does not have any investment advice, all DYOR.