Taproot and Ordinals
Bitcoin Taproot upgrade and Ordinals protocol — NFT on Bitcoin.
Taproot is a Bitcoin upgrade from November 2021 that opened the path for Ordinals — "NFT" directly on the Bitcoin blockchain.
Taproot upgrade (BIP340, BIP341, BIP342):
•Schnorr signatures instead of ECDSA
•Advantages: better privacy, efficiency, multisig looks like regular transaction
•Tapscript: more flexible scripting
•Activated block 709,632 (November 2021)
Ordinals protocol (January 2023, Casey Rodarmor):
•Satoshi numbering — each satoshi gets a unique number
•Inscription — embed arbitrary data in witness field of transaction
•Result: "NFT" directly on Bitcoin L1
Ordinal types:
•Text inscriptions
•Image inscriptions (PNG, SVG, WebP)
•JSON (BRC-20 tokens)
•HTML/JavaScript
•Audio and Video (larger blocks)
BRC-20 tokens:
•Fungible tokens on Bitcoin via JSON inscription
•Experimental, inefficient
•ORDI — first BRC-20 token
•"Bitcoin DeFi" discussion
Runes protocol (April 2024, halving block):
•Optimized fungible tokens on BTC
•More efficient than BRC-20
•Casey Rodarmor (same creator as Ordinals)
Controversy in Bitcoin community:
•Maxi criticism: "spam on blockchain"
•Pragmatists: generate high fees for miners
•Debate about original Bitcoin use case intent