Ordinals Theory: The Controversial ‘NFTs on Bitcoin’ Phenomenon Challenging Bitcoin Fungibility and Privacy

Casey Rodarmor, a long-time Bitcoiner known for his actual code commits to Bitcoin Core, introduced Ordinals Theory, which has been dubbed “NFTs on Bitcoin” by some due to its similarities with non-fungible tokens. However, Rodarmor prefers to refer to these digital artifacts as “inscriptions” or “digital art objects.” While many Bitcoiners criticize Ordinals as breaking the fungibility of bitcoin, reducing its privacy, and cluttering the chain with frivolous junk, Rodarmor disputes these claims. He believes that everyone can simply ignore ordinal numbers and inscriptions, as the fungibility of these assets is only technically true. Ordinals Theory is essentially just a lens for properly ordering satoshis in order to view inscriptions, and the protocol’s success has generated over 45 million inscriptions and nearly $1 billion in total fees on the Bitcoin network. Rodarmor has received tips in bitcoin for his work, although he’s unsure whether that covered his costs. He has received hate from Bitcoiners critical of Ordinals on social media, but he believes that this is a typical response to an open-source project that anyone can adapt. Before Ordinals, there was no convincing use for Bitcoin that would generate the fees necessary to pay for the network’s security once the subsidy runs out. Rodarmor stepped back from Ordinals this summer due to the unappreciated work and the fundamental unseriousness of the conflict. However, he believes that because Bitcoin is an open-source project, getting angry at Rodarmor is as pointless as getting angry at BlackRock for corrupting the ethos of Bitcoin by applying to launch an ETF. Rodarmor believes that every digital artifact inscribed on-chain means fees going into miners’ pockets, which pays for the specialized chips and electricity that keep Bitcoin humming. Rodarmor plans to continue developing Ordinals, and he has received support from some notable figures in the industry. However, Rodarmor admits that learning to live with the love and hate of launching such an influential and contentious bit of software has been an iterative process for him, and he has learned to be humble. Some Bitcoiners are indifferent to Ordinals, while others love the idea or are hostile towards it only online. Rodarmor believes that being back working on Ordinals makes him happy. Trust the process.