When NFTs appeared on the market, no one was really interested in these digital assets with no apparent value. It only took a few years for them to gain the popularity deserved when developers used the Ethereum blockchain to program, store, and trade NFTs. It all started with
CryptoPunks and CryptoKitties, and it went on with the Bored Ape Yacht Club collection.
However, NFTs were trending only for a short time because they were suspected of being used for counterfeiting, fraud, and money laundering. At the same time, some investors discovered that the NFT they bought was either nonexistent or duplicated, which should’ve been impossible with these assets.
So, recently, a new type of NFT appeared on the market called Ordinal, and it’s based on the Bitcoin blockchain. The technology behind it totally revolutionized the crypto market and proved that Bitcoin has the potential to expand beyond its store-of-value condition.
Both assets are similar and different at the same time ―but what’s the best choice for investors?
Bitcoin Ordinals and their unique technology
Bitcoin Ordinals are quite new to the market, having been first minted in 2023. However, the timeline starts ten years back in 2012, when the concept was put in place, followed by further blockchain improvements that led to this moment.
Bitcoin Ordinals are based on Satoshi, the smallest part of a Bitcoin, which is accompanied by a media attachment that makes it similar to an NFT. Magic Eden Ordinals borrow Bitcoin’s security, decentralization and immutability, which offer them more trust compared to similar digital assets.
Bitcoin Ordinals can be mined from most blockchains, such as Ethereum or Solana, even if Bitcoin uses the PoW consensus mechanism. When it comes to trading, you need to seek specialized wallets compatible with the Ordinals protocol because not all are fit for the technology. Regardless, Bitcoin Ordinals are not that complex to handle.
Ethereum NFTs and their boom on social media
Ethereum NFTs were the first to gain popularity on the internet around the pandemic when they attracted a lot of attention due to their trade of digital land. This feature opened numerous opportunities for real estate entrepreneurs since every NFT was unique on the market and could establish ownership of real-life assets.
NFTs were enhanced by Ethereum’s smart contracts that allowed specific establishments for these nonfungible assets to make them more functional. Ethereum NFTs were designated by standards on protocol specifications and programming interfaces so these assets could be created on a specific set of rules.
Use cases of NFTs are expanded since they can be more than just digital collectibles. Investors can leverage them to collect fine art, buy property or get insurance, even if these situations are still less encountered in the business world.
What do Ordinals have that NFTs don’t?
There are a few things about Ordinals that NFTs don’t provide, which is what makes them unique. For example, Ordinals are permanently stored on the Bitcoin blockchain for enhanced decentralization and security, while NFTs are instead stored on various decentralized applications through smart contract functions.
Moreover, Ordinals ensure better liquidity compared to NFTs since they’re tied to the Bitcoin cryptocurrency, a highly liquid digital asset, whereas NFTs are limited in terms of liquidity due to their market value and security.
Ordinals NFTs are also more immutable and secure as blocks in the Bitcoin blockchain are packed with the hash from the previous block, so it easily becomes permanently recorded on the distributed public ledger.
Finally, Ordinals are rarer than NFTs, which enhances their value on the market. This happens due to the supply restrictions of the Bitcoin network, but that’s not necessarily a bad thing because it helps preserve the Ordinals’ value.
Still, NFTs are more famous
Fame on the crypto market matters from some perspectives because it drives prices up and increases investors’ interest in new assets, which is why NFTs are still the preferred option for trading over Ordinals.
The NFT craze started with CryptoKitties in 2017, a game in which users could adopt, breed and trade digital cats. The game was based on the Ethereum network, and the creator of CryptoKitties continued launching several projects that also sparked investors’ interest. The creation represented a new era for future developers and artists because it was an accessible way to share and monetize their artwork, so the spike in popularity was massive a few years later, around the time of the pandemic.
NFTs can be used in several ways besides the art industry, such as infrastructure, the gaming sector, sports and research, so their use cases make them more appealing to the public. They also don’t have the problem of scarcity since the market has grown considerably in the past years.
At the end of the day, diversification matters
If you can’t decide whether Ordinals or NFTs can elevate your portfolio, you can choose to invest in both and advance diversification in order to manage volatility and receive enough exposure to the market without risking your assets.
Hence, you should start by researching the projects that appeal the most to you and are safe enough for long-term investment because not all NFT projects will provide value, which is why you must take the time to read everything about projects before diving in. At the same time, make sure always to consider your risk level because, depending on your current portfolio case, you might be more or less prone to experience dangerous volatility spikes. It’s significantly helpful to participate in communities to stay up-to-date with the latest project updates and also find support.
So, what do you think about Ordinals and NFTs?
NFTs were the first assets of their kind, created on the Ethereum market, and their value was given by uniqueness and ownership that propelled them on the market. But since technology continue developing, Bitcoin also created its own kind of NFTs called Ordinals, sharing various similarities. However, they’re considerably different and serve diverse purposes, especially since their timeline doesn’t overlap.
The post Should you Choose Business Ordinals over Ethereum NFTs? appeared first on The Right Messages.