The Dawn of a New Era in NFTs: Exploring the Rise of Alternative Layer 1s

As we venture into 2024, the NFT landscape is undergoing a seismic shift, with alternative Layer 1 blockchains like Solana (SOL), Tezos, and SEI emerging as significant players. This shift marks a pivotal moment in the evolution of the NFT ecosystem, diversifying the platforms on which digital art and collectibles thrive.

1. Diversification Beyond Ethereum: A Breath of Fresh Air for NFTs

Historically, Ethereum has been the dominant force in the NFT space. However, alternative Layer 1s like SOL, Tezos, and SEI offer fresh opportunities. Their unique features, such as lower transaction fees and faster processing times, make them attractive to artists and collectors seeking new avenues for NFT creation and trade.

2. Niche Communities and Innovative Use-Cases

These alternative blockchains are carving out niche communities and fostering innovative use-cases. For instance, Tezos has become a hub for eco-conscious artists due to its energy-efficient design, while SEI’s high throughput is appealing for high-frequency trading NFTs.

3. Enhanced Scalability and Performance

Scalability remains a key concern in the NFT space. Alternative Layer 1s address this issue head-on, offering superior scalability and performance compared to older blockchains. This feature is crucial as the NFT market expands and requires more efficient infrastructure.

4. Tailored Solutions for Diverse Needs

Each of these alternative Layer 1s brings tailored solutions to the table. Solana, known for its lightning-fast speeds, is ideal for projects that require quick transactions. Tezos, on the other hand, appeals to those prioritizing eco-friendliness.

5. Growing Ecosystems and Partnerships

The expanding ecosystems and partnerships surrounding these blockchains are a testament to their growing influence. Collaborations with artists, brands, and tech companies are broadening the scope and appeal of NFTs on these platforms.

BTC’s Entry into NFTs: Ordinals and Inscriptions

2024 also witnesses a groundbreaking development in the NFT space with Bitcoin (BTC) introducing ordinals and inscriptions. This new concept involves directly inscribing digital assets onto individual satoshis, the smallest unit of Bitcoin, adding a fresh dimension to the NFT market.

The Significance of Bitcoin’s Ordinals

Bitcoin’s foray into the NFT world is notable for several reasons. Firstly, it leverages the robust security and widespread recognition of the Bitcoin network. Secondly, ordinals introduce a unique way of tokenizing assets, differing from traditional NFT standards. This innovation could attract a new wave of collectors and creators, eager to explore the possibilities within the Bitcoin ecosystem.

Implications for the NFT Landscape

The introduction of Bitcoin ordinals and inscriptions is poised to enrich the NFT landscape. It not only expands the range of blockchain options for NFTs but also brings the credibility and stability of Bitcoin to the forefront of digital art and collectibles.

The Unstoppable Rise of Layer 2s: Ethereum’s Counter

While alternative Layer 1s and Bitcoin’s new venture are making waves, Ethereum’s Layer 2 solutions, particularly Arbitrum, are not to be overlooked, especially in the gaming sector. Arbitrum is poised to extend its lead in 2024, offering a blend of Ethereum’s security with enhanced scalability and lower fees, making it ideal for NFT-based games.

Conclusion: A Balanced NFT Future

2024 promises to be a landmark year for NFTs, with both alternative Layer 1s, Bitcoin’s innovative ordinals, and Ethereum’s Layer 2 solutions like Arbitrum playing critical roles. This balanced growth ensures a vibrant, diverse, and technologically advanced NFT ecosystem.

TLDR: 2024 marks the rise of alternative Layer 1 blockchains like Solana, Tezos, and SEI in the NFT space, alongside Bitcoin’s introduction of ordinals and inscriptions, offering diversification, niche communities, scalability, and tailored solutions. Ethereum’s Layer 2 solutions, especially Arbitrum, continue to be pivotal, particularly in NFT gaming. The year promises a balanced and thriving NFT ecosystem.

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In a recent tweet, Bitcoin educator and developer Udi Wertheimer criticized several prominent figures in the Bitcoin community for their lack of response to a new project announcement by a multibillion-dollar company.

Wertheimer goes on to suggest that these individuals are waiting for someone else to take the fall before publicly supporting the project. While some users came to the defense of those mentioned, pointing out that many are likely working on similar projects behind the scenes, others agreed with Wertheimer’s sentiment.

“MULTIBILLION DOLLAR COMPANY ANNOUNCES BITCOIN ORDINAL PROJECT. bitcoin magazine: 0 tweets. saylor: 0 tweets. maxi podcasters: 0 tweets. what a bunch of clowns lmao I CANNOT.”

The situation raises questions about the relationship between the Bitcoin community and larger corporations, particularly those that have traditionally been viewed as outside of the cryptocurrency space. It also highlights the potential risks associated with public endorsement, particularly in a rapidly changing industry like cryptocurrency.

While it is unclear what the multibillion-dollar company in question is, or what their Bitcoin ordinal project entails, it is clear that there is some hesitation among certain prominent figures in the Bitcoin community to publicly endorse the project.

It is worth noting that the Bitcoin community has historically been wary of corporate involvement in the space, with some seeing it as antithetical to the decentralized ethos of the cryptocurrency. However, as Bitcoin and other cryptocurrencies have grown in popularity, more and more companies have expressed interest in exploring the technology.

As the industry continues to evolve, it will be interesting to see how the relationship between large corporations and the Bitcoin community develops. Will more companies be welcomed into the fold, or will the community continue to prioritize decentralization and independence above all else? Only time will tell.

you can read the entire thread here

MULTIBILLION DOLLAR COMPANY ANNOUNCES BITCOIN ORDINAL PROJECT

bitcoin magazine: 0 tweets

saylor: 0 tweets

maxi podcasters: 0 tweets

what a bunch of clowns lmao I CANNOT

— Udi Wertheimer (@udiWertheimer) February 28, 2023

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An experimental 300-piece collection from Yuga Labs on the Bitcoin blockchain

Exciting news for the world of Bitcoin Ordinals! Yuga Labs, a leading experimental art studio, has announced its entry into the Bitcoin Ordinal movement by launching a new generative art collection called TwelveFold. The collection, which will consist of only 300 pieces, will be inscribed onto satoshis and will live on the Bitcoin blockchain.

TwelveFold is a base 12 art system localized around a 12×12 grid, serving as a visual allegory for the cartography of data on the Bitcoin blockchain. The collection includes highly-rendered 3D elements and hand-drawn features that pay homage to the ordinal inscriptions currently done by hand.

We will be announcing more details about timing and the auction mechanics in the coming week. Good luck to all of the bidders—we’re looking forward to sharing this collection with the world.

The Ordinals movement has gained a lot of attention in recent weeks, with collections like OnChainMonkey, DeGods, and Sappy Seals pushing boundaries and making a leap onto the Bitcoin blockchain. Yuga Labs’ involvement in the Ordinals movement may single-handedly mark that Bitcoin NFTs are here to stay.

While the infrastructure and tooling around inscriptions on Bitcoin are still nascent, much of the foundational principles such as provenance, self-custody, and ownership are already present. Yuga Labs expects the technology and the ecosystem around it to evolve and become more sophisticated over time, but not in the same ways other blockchain NFT ecosystems have.

Yuga Labs will be announcing more details about timing and the auction mechanics in the coming week, and we can’t wait to see what the future holds for digital artifacts on the Bitcoin blockchain. This announcement is an optimistic sign of the growth and potential of Bitcoin Ordinals, and we are excited to see what other innovative collections will emerge in the future. Stay tuned!

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Bitcoin was created in 2009 as a decentralized, peer-to-peer digital currency that operates on a public ledger called the blockchain. Over the years, the Bitcoin network has evolved to include various layers and protocols that allow for additional functionality and features beyond simple payments. One of these protocols is the ability to create non-fungible tokens (NFTs) on the Bitcoin blockchain.

NFTs are unique digital assets that can represent anything from art to collectibles to in-game items. They are “non-fungible” because each token is unique and cannot be exchanged for another token of equal value, unlike fungible tokens like Bitcoin itself. NFTs have become increasingly popular in recent years, with many high-profile sales of digital art and collectibles.

The first NFT standard on the Bitcoin blockchain was called Colored Coins, which was created in 2012. Colored Coins allowed users to attach additional information to Bitcoin transactions, essentially creating a new type of asset that could be traded on the blockchain. However, Colored Coins never gained widespread adoption and was eventually supplanted by other NFT protocols.

One of the most promising NFT protocols on the Bitcoin blockchain today is Ordinals. Ordinals is a simple and elegant protocol that allows users to “inscribe” up to 3.9 MB of data on the Bitcoin blockchain without the use of smart contracts. These inscriptions can represent anything from art to music to text. Because the inscriptions are directly on the Bitcoin blockchain, they are highly secure and tamper-resistant. Ordinals are fully backed by Bitcoin’s hash power and decentralization, making them permanent and as permanent as anything ever known. They can be exchanged like Bitcoin and used as proof of ownership for digital assets.

Stacks vs. Ordinals?

Stacks and Ordinals are two different protocols that utilize the Bitcoin blockchain, each with their unique set of features and use cases.

Stacks is a layer on top of the Bitcoin blockchain that allows developers to build Ethereum-style smart contracts that read, write, and secure data on Bitcoin. It is similar to a sidechain in that it has its own ledger and virtual machine, but it also has properties of a layer-two scaling solution because it inherits security (finality) from Bitcoin L1. Stacks enables developers to create a range of decentralized applications (dApps) that can interact with Bitcoin in a secure and trustless manner. However, Bitcoin itself cannot verify Stacks transactions, so Stacks requires a separate consensus mechanism to secure its ledger.

On the other hand, Ordinals is a protocol on Bitcoin L1 that allows users to “inscribe” data up to 3.9 MB on the Bitcoin blockchain without the use of smart contracts. Ordinals are essentially non-fungible tokens (NFTs) that are fully backed by Bitcoin’s hash power and decentralization. They are permanent and can be exchanged like Bitcoin. Because they are inscribed directly on the Bitcoin blockchain, they are highly secure and tamper-resistant.

In summary, while Stacks and Ordinals both use the Bitcoin blockchain, they have different characteristics and use cases. Stacks allows developers to build complex dApps that can interact with Bitcoin, while Ordinals provide a simple and elegant way to inscribe data on the Bitcoin blockchain without the use of smart contracts. Both protocols have their unique advantages and are being developed by a community of builders who are committed to advancing the Bitcoin ecosystem.

Friend of NFT Culture TO also has a great thread that inspired this post.

Awesome thread

BUT the author may have confused Stacks w/ Ordinals right here

Everyone should know Ordinals is a protocol on Bitcoin L1

Stacks is another layer/ledger w/ Ethereum-style smart contracts that read, write, & secure data on Bitcoin

They can work together https://t.co/n7hpV5SgHj

— trevor.btc (@TO) February 24, 2023

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The creation of Emblem Vault in 2020 has opened up a world of possibilities for Bitcoin NFTs, making it easier to trade and build a strong digital portfolio. In this article, we will explore the benefits of using Emblem Vault and why it is set to revolutionize the world of NFTs.

First, let’s understand what Emblem Vault is. It is a tokenized multi-asset wallet on the Ethereum blockchain that allows you to trade portfolios of NFTs and cryptocurrencies, including assets from different chains, as a single token. The vault is created as a unique ERC-721 token, and each vault contains a series of blockchain addresses generated from a single secret phrase. This means that you can store various digital assets in each address and only the person with the secret phrase can send assets to other wallets.

Benefits of Emblem Vault for BTC NFTs

One of the key benefits of Emblem Vault is the ability to create a value-backed digital vault. This means you can store one or more digital assets, along with some cryptocurrency, in a single vault, making it easier to manage your digital assets. This is especially useful for individuals who want to keep their digital assets safe and secure.

Another benefit of Emblem Vault is the ability to create tradeable portfolios. This allows you to combine multiple assets into a single token, making it easier to trade and manage your portfolio. For example, you can create a portfolio that contains 50% ETH, 40% Bitcoin, and 10% LINK, and trade all these assets as a single ERC-721 NFT. This simplifies the process of managing your digital assets and makes it easier to keep track of your investments.

Emblem Vault also enables you to create portable liquidity pools. This means you can create a vault with multiple pooled tokens to make transferable liquidity pools, as well as transparent funds. You can do this because Emblem Vault enables you to create a vault that is held by a community or other trusted third parties. This can be especially useful for individuals or organizations looking to pool their resources and invest in digital assets together.

In addition, Emblem Vault works by wrapping digital assets to make them modern ERC-721 NFTs, which can be traded on popular NFT marketplaces like OpenSea. This means that you can buy and sell assets that predate the ERC-721 standard, such as Rare Pepe’s. This opens up a world of possibilities for those looking to invest in NFTs and allows you to trade assets that were previously difficult to buy and sell.

Furthermore, Emblem Vault is user-friendly and easy to use. To create your own vault, simply go to Emblem.Finance, select Create, connect the wallet you would like to use, and then add a name and description. You can also buy and sell Emblem Vault NFTs on popular platforms such as OpenSea, LooksRare, and their official website.

Emblem Vault is set to revolutionize the world of NFTs by making it easier to trade and manage digital assets. With its ability to create value-backed digital vaults, tradeable portfolios, and portable liquidity pools, it offers a range of benefits to individuals and organizations looking to invest in digital assets. Its user-friendly interface and the ability to wrap digital assets to make them tradable on popular NFT marketplaces make it a game-changer in the world of NFTs. If you’re looking to invest in NFTs, it’s definitely worth considering Emblem Vault.

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In February 2022, a proposal was sent to the Bitcoin dev mailing list to bring NFTs to the Bitcoin network. The idea is to assign each Satoshi (a unit of Bitcoin) an ordinal number, which would then be linked to extra information such as text, images, videos, and games. This would create digital artifacts, or NFTs, that can be stored on the Bitcoin blockchain.

Key Takeaways on Ordinals and Inscriptions for BTC NFTs

1. What is an Inscription?

   • An Inscription is a type of digital asset stored on the Bitcoin blockchain that allows the creation and transfer of unique digital artifacts.
   • It is different from traditional tokens as it is stored in the OP_RETURN field of a Bitcoin transaction, which can store a small amount of data.
   • Inscriptions allow the creation of unique, non-fungible digital artifacts that can be used for various purposes such as art, collectibles, and more.

2. How does this compare to NFTs on Ethereum?

   • Inscriptions are different from NFTs on Ethereum in that they are stored fully on-chain, making them immutable and fully decentralized.
   • NFTs on Ethereum, on the other hand, use token standards such as ERC721 or ERC1155 to create collections of tokens, each with a unique tokenID.
   • Another difference is that creating or transferring an NFT on Ethereum can result in high transaction costs, while the transaction fee for sending Inscriptions is relatively low due to transaction fee optimizations with Taproot on Bitcoin.
   • A potential disadvantage of Inscriptions is that all content stored on the blockchain is permanent, including any illicit or unsavoury content.

3. Where can I find Inscriptions?

   • You can find all the ordinals by going here

What if I want to make Ordinals and Inscriptions?

Right now the easiest way we have found is a tool called Gamma.  You can see the guide to create Gamma BTC NFTs here.  Please do your own research and assume your own risk. This is a tedious but not complicated process.  Good Luck.

Origin of Ordinals and Bitcoin NFTs

The proposal has received mixed reactions from the crypto community, with some considering it an exciting new use case for Bitcoin, while others believe that Bitcoin should remain as a system for digital cash and not be evolved into something else. There are also concerns about the potential increase in transaction fees and resource demands on nodes.

The process of creating an NFT starts with creating a Bitcoin transaction that stores the extra information, called an “Inscription,” in one of the output addresses. This data could be text, images, SCG, or HTML, and its size is only limited by the block size limit. Unlike traditional Bitcoin transactions that use an OP_RETURN to add extra data, the Ordinal approach stores the metadata within the transaction itself, making use of the 2021 segwit update that allows up to 3MB of witness data to be stored outside of the 1MB block limit.

To transfer an NFT, it is assigned an ordinal number based on the first-in-first-out algorithm and then transferred in a Bitcoin transaction. Not all Ordinals have Inscriptions assigned to them, so not every transaction may involve an NFT.

The proposal to bring NFTs to the Bitcoin network has sparked a debate in the crypto community, with some embracing the idea of digital artifacts on the Bitcoin blockchain and others concerned about the potential consequences. The technical process of creating and transferring NFTs involves creating a Bitcoin transaction with extra data, or an Inscription, and assigning an ordinal number to each Satoshi involved in the transaction.

Thats great so what are Inscriptions?

In the context of Bitcoin Ordinals, an Inscription is the metadata that is attached to a bitcoin (satoshi) in the form of extra data stored within a Bitcoin transaction. This extra data could be anything from text, images, sound files, HTML, or other digital assets, and the size of the Inscription is capped by the block size limit. The idea behind Inscriptions is to create non-fungible properties for bitcoin, allowing each satoshi to have its own unique digital artifact.

The Inscription data is stored within the raw transaction data and is created by creating a Bitcoin transaction that stores the extra data (the Inscription) in one of the output addresses. The Inscription is created through a two-phase process, with the first phase committing the taproot output to a script containing the Inscription content. This content is serialized within the transaction in a form known as an “envelope”. The second phase involves creating another transaction to reveal the Inscription information, where the output created by the commit transaction is spent, revealing the Inscription content on the blockchain.

The Ordinal number assigned to each satoshi is used to identify and link the Inscription to a specific bitcoin, allowing the digital artifact to be transferred along with the bitcoin in a transaction. Not all Ordinals have Inscriptions assigned to them, and it is up to the users to create and attach Inscriptions to their bitcoins as they see fit.

TLDR: Inscriptions are a new concept in the world of Bitcoin that allow users to attach metadata and other digital assets to their bitcoins, creating unique digital artifacts. This opens up new opportunities for Bitcoin to be used in ways that go beyond its original purpose as a digital currency, and has the potential to bring new and exciting use cases to the world of cryptocurrency.

Here is an example inscription and data

So how does this compare to ethereum NFTs?

In comparison to NFTs on Ethereum, the creation and use of Inscriptions on Bitcoin is a distinct approach. On Ethereum, NFTs are created using token standards such as ERC721 and ERC1155 and are given a unique token ID to identify them, in addition to the account for the collection’s smart contract. The complexity of NFTs can lead to high transaction costs to mint or transfer them on Ethereum. However, with the transaction fee optimization of Taproot on Bitcoin, the cost of sending Inscriptions is significantly lower.

Another difference between the two is that all Inscriptions are stored directly on the blockchain, making them immutable and fully decentralized. This differs from NFTs on Ethereum where there have been concerns about the removal of metadata if the centralized storage solution goes offline or if the project manipulates the metadata. Despite the benefits of immutability, this also means that any illegal or undesirable content in Inscriptions will remain on the chain forever. There have already been instances of obscene Inscriptions and it is only a matter of time before illegal imagery is added. Websites that help visualize Ordinal data can block these images, but they will still exist on the blockchain. It’s worth noting that this issue is not unique to Inscriptions and has been a problem with arbitrary data storage on blockchains since their inception.

Well what about Stacks the BTC Layer 2 Solution?

Stacks Layer 2 NFTs and Inscriptions both relate to the creation and use of digital assets in a blockchain context. However, they have differences in terms of their underlying technology, the way they are created, and their features.

Stacks Layer 2 NFTs are built on the Stacks blockchain, which is a Layer 2 scaling solution for the Bitcoin blockchain. This allows for NFTs to be created and stored more efficiently and cost-effectively than on the Bitcoin blockchain. Stacks Layer 2 NFTs can be used for a wide range of applications, including digital collectibles, gaming items, and digital art.

Inscriptions, on the other hand, are digital assets that are stored directly on the Bitcoin blockchain. They use Bitcoin’s scripting language to encode information about the digital artifact, and each Inscription is given a unique token to reference it. Unlike NFTs on smart contract blockchains like Ethereum, Inscriptions are fully on-chain and therefore immutable and decentralized. However, this also means that their data cannot be edited or deleted, and any unsavory or illegal content that is stored as an Inscription will be on the blockchain forever.

TLDR: Inscriptions are like curio cards

Where can I find a technical walkthrough?

Tara Annison has a great medium article that goes into more detail here

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