Ordinals — Coffee Break Quotes

In one minute

Ordinals = numbering sats: “Ordinal theory” gives each satoshi (the smallest BTC unit) a serial number so you can track a specific sat as it moves.
Inscriptions = data on-chain: An inscription stores a file (text/image/etc.) in a Bitcoin transaction’s witness data and ties it to a particular sat.
Why people care: Collectibles, art, messages, and “rare sats.” It’s Bitcoin-native and doesn’t require separate tokens or smart contracts.

Educational only: Not financial advice. Fees can be high, and mistakes can permanently “burn” an inscription. Start small.

Bitcoin uses the UTXO model (unspent outputs). Each output holds some sats.
An indexing convention assigns a number to each sat as blocks are mined. Wallets/explorers use this to track specific sats.

When you “inscribe,” you include your file’s bytes in a special part of a transaction (witness data enabled by Taproot).
The file becomes part of Bitcoin’s history; the inscription is considered attached to one sat in that transaction.

An inscription travels with its inscribed sat. If you spend that sat in a non-ordinal-aware way, you can accidentally send it away.
Use wallets that support UTXO control or are specifically “ordinal-aware.”

Ordinals rely on widely-used indexing rules to agree which sat holds which inscription.
Think of indexers like “readers” of the chain that follow common conventions to label sats.

Chain & storage: Inscriptions store the file bytes directly on Bitcoin (in witness data). Many NFTs on other chains point to off-chain files.
Smart contracts: Bitcoin inscriptions don’t use rich smart contracts. Rules are simpler; markets rely on wallets, PSBTs, and indexers.
Composability: On-contract logic (royalties, traits) is limited compared to smart-contract NFTs; trading conventions do more of the work.

Block space is scarce: Bigger files cost more in fees. Popular formats are compressed images, text, or small binaries.
Optimize files: Compress images, prefer efficient formats, and keep metadata minimal to lower costs.
Finality & permanence: Once mined, the data is in Bitcoin’s history. (Nodes may prune old data locally, but the chain can still verify it.)

Use an ordinal-aware wallet with a Taproot address (bech32m).
Give the receive address shown by your ordinal wallet (don’t reuse addresses if possible).
Wait for confirmations; then verify the inscription ID in your wallet or an ordinal explorer.

Select the specific UTXO/inscription (not a generic “send BTC” flow).
Confirm the destination address and network fees.
Sign a PSBT (partially signed Bitcoin transaction) if your wallet uses it, and broadcast.
After confirmations, verify the inscription moved to the new address.

Tip: Keep inscribed sats in their own UTXO. Avoid spending them together with regular BTC.

Some collectors value sats by when they were mined (e.g., first sat of a block or epoch).
This is a cultural convention on top of Bitcoin — interesting for collectors, not required for using BTC.

Accidental burns: Spending the wrong UTXO can send your inscription away. Use ordinal-aware wallets and double-check UTXO selection.
High fees: Big files or busy times can be expensive. Optimize and time your transaction.
Phishing: Fake marketplaces/wallets exist. Bookmark official links; never share seed phrases.

Indexing differences: Rare edge cases can be interpreted differently by tools. Stick to well-known indexers and verify before large transfers.
Custody mishaps: Exchanges/wallets that aren’t ordinal-aware might not preserve inscriptions. Use tools that clearly support them.

Educational content only. Do your own research.

Satoshi (sat): Smallest BTC unit (0.00000001 BTC).
Ordinal number: A serial number assigned (by convention) to each sat to track it.
Inscription: Data placed in a Bitcoin transaction’s witness and associated with a specific sat.
UTXO: Unspent transaction output — a “coin” you can spend as a whole in Bitcoin’s model.
Taproot: Bitcoin upgrade enabling efficient scripts and larger witness data uses.
PSBT: Partially Signed Bitcoin Transaction — a standard for safely composing/signing transactions.