By What Are Bitcoin Ordinals and BRC-20 Tokens?
Bitcoin spent over a decade doing one thing, moving money, and doing it deliberately narrowly on purpose. Then in January 2023 a developer named Casey Rodarmor released a protocol called Ordinals, and within weeks people were putting JPEGs, video clips, and even full copies of the Bitcoin whitepaper directly into Bitcoin blocks. Some of the community thinks it's a clever, harmless use of unused block space. Others think it's junk clogging up the world's most important monetary network. Both sides have a real case.
The technical trick that made it possible
Ordinals runs entirely on top of Taproot, the Bitcoin upgrade activated in November 2021 that bundled Schnorr signatures and a new scripting language into the protocol, covered in full in what Taproot actually is and how it works. One side effect of Taproot's design, not really its original purpose, was quietly removing the strict size cap on individual scripts. That opened the door to stuffing kilobytes, eventually megabytes, of arbitrary data into a transaction's witness section, the part that holds signature data. Ordinals theory assigns every individual satoshi, the smallest unit of Bitcoin at one hundred millionth of a whole coin, a permanent serial number based on the order it was mined. An "inscription" attaches content, an image, text, even a small audio or video file, to one specific numbered satoshi, and that content lives on Bitcoin's blockchain permanently, replicated on every full node the same as any transaction.
How you'd actually create one
Inscribing something takes two transactions. The first, a commit transaction, locks coins to a Taproot output containing a script with the inscription's content hidden inside it. The second, a reveal transaction, spends that output and exposes the script, publishing the content into the witness data where indexing software, most commonly a tool called ord, can read and catalog it. Wallets built for this, Xverse and Leather among the most used, track which specific satoshi carries which inscription as it moves between owners, the same way an NFT marketplace tracks which wallet owns which token, except the artwork itself sits directly on Bitcoin rather than a link pointing somewhere else. That's actually the biggest practical difference from a typical Ethereum NFT: most NFT platforms only store a pointer to off-chain artwork, while an inscription's content is the transaction data itself.
What people have actually inscribed
The range of content sitting inside Bitcoin blocks now is broad. Pixel art collections modeled on Ethereum's CryptoPunks were among the earliest and remain some of the most traded. The Bitcoin whitepaper itself has been inscribed multiple times over by different people, a small piece of trivia the Ordinals community treats as something close to a tribute. Full source code, short video clips compressed to fit within block weight limits, entire public domain books, and recursive inscriptions, ones that reference and build on top of earlier inscriptions rather than duplicating their data, have all shown up on chain. Recursive inscriptions in particular solved a real technical problem: instead of re-embedding the same background or trait art in every single item of a collection, later inscriptions can just point back to art that's already stored on chain, cutting typical collection costs significantly compared to the early, wasteful days of the protocol.
BRC-20: turning the same trick into tokens
A couple months after Ordinals launched, a pseudonymous developer known as Domo published BRC-20, borrowing its name from Ethereum's ERC-20 token standard. Instead of inscribing a picture, a BRC-20 inscription contains a small JSON document describing a token action, deploying a new token, minting some, or transferring a balance. There's no actual smart contract enforcing any of it, off-chain indexers just read every inscription on the chain, pick out the ones with valid BRC-20 formatting, and calculate balances from that. It's a bit of a hack, using a system built for one-off inscriptions to simulate fungible tokens, and it turned Bitcoin into something close to a meme-coin platform almost overnight. Casey Rodarmor himself later released a cleaner alternative, Runes, in April 2024, built directly on Bitcoin's native UTXO structure instead of piggybacking on inscriptions, specifically to fix BRC-20's inefficiency.
The private key for every Bitcoin wallet on Earth is on this website, even Satoshi's. But even if you try for a million years, you'll never find a funded one.
Try the key collider nowThe actual argument, from both sides
The case against Ordinals is straightforward: Bitcoin has limited block space, and every byte spent on an image or a meme token is a byte not available for an actual payment, which pushes fees up for everyone during busy periods. Critics also argue it runs against Bitcoin's original purpose as described in Satoshi's own whitepaper, a peer-to-peer electronic cash system, not a data storage layer or a token platform. The case for it is less about whether Ordinals is a good idea and more about what Bitcoin's rules actually allow: these transactions are fully valid under Bitcoin's consensus rules, nodes can choose not to relay them as a matter of local policy, but any miner willing to include them can mine them regardless, and several proposals to filter or restrict inscriptions at the protocol level have failed to gain enough consensus to actually merge into Bitcoin Core. As long as even one miner is willing to include the transaction, it gets into a block. Higher fees, some argue, aren't purely a downside either, they help fund network security as the mining subsidy keeps shrinking with each halving, and they reinforce the case for the Lightning Network as the actual answer for cheap, everyday Bitcoin payments rather than the base chain itself. For how that fee mechanism works day to day, see how Bitcoin transaction fees actually work, and for the Taproot-adjacent scaling layer this debate keeps pointing back to, see what the Lightning Network actually is.
The most expensive minutes in Bitcoin fee history
Ordinals mania has produced some strange moments for Bitcoin's fee market. During peak demand periods in 2023, average transaction fees spiked well above what a typical payment would have cost only weeks earlier, purely from the volume of inscription and BRC-20 activity competing for block space. Miners, for their part, generally welcomed it, since transaction fees flow directly to whoever mines the block, and a busier fee market means more revenue per block regardless of what the transactions actually contain. That created a real tension inside the mining and node-operator community itself: miners had a financial incentive to include inscription transactions, while a chunk of the node-operating and developer community wanted to see them filtered or restricted, a disagreement that hasn't fully resolved either way.
The mempool fight that never quite settled anything
Several developers proposed changes to Bitcoin Core's default relay policy specifically aimed at inscriptions, treating large witness-data transactions differently from ordinary payments to discourage the practice without an outright protocol-level ban. None of these proposals gathered enough support to actually ship as Bitcoin Core's default behavior. Part of the resistance was philosophical, plenty of long-time contributors are uncomfortable with Bitcoin Core making judgment calls about what counts as a "legitimate" use of block space versus "spam," since Bitcoin's whole design point is not needing anyone's permission to use it. Part of it was simply practical: even a successful default-policy change wouldn't actually stop inscriptions, since any node or mining pool could run different software and relay them anyway, meaning a filtering fight fought entirely at the relay-policy layer was always going to be more symbolic than actually effective at eliminating the practice.
Where it actually stands now
By 2026, Taproot transactions account for roughly a fifth of all Bitcoin activity by most measures, and tens of millions of inscriptions sit permanently in the blockchain, everything from pixel art collections to full books and source code. Trading volume and prices for individual inscriptions have been considerably more volatile than the broader Bitcoin market, following the same speculative boom-and-bust rhythm NFT collections on other chains went through a few years earlier. What hasn't changed is the underlying disagreement: Bitcoin's consensus rules make no distinction between a transaction moving money and one embedding a cat picture, and unless that changes at the protocol level, which would require the kind of broad developer and miner agreement that's proven hard to reach so far, Ordinals and whatever comes after it will keep being valid, minable, and controversial all at the same time. It's a fitting outcome for a network whose entire security model rests on nobody being able to unilaterally decide what counts as an acceptable transaction, the same property that makes Bitcoin resistant to censorship also means it's resistant to a filtering campaign against inscriptions, whether or not any individual node operator or developer actually likes what's ending up in the blocks. Whatever Bitcoin becomes over the next decade, it will carry every inscription made during this period along with it, permanently, the same way it carries the record of every transaction back to the genesis block, whether that ends up looking like a quirky footnote in Bitcoin's history or an early chapter of something bigger. For a deeper look at both sides of that fight, including the specific developers and numbers involved, see whether Ordinals are the best or worst thing to happen to Bitcoin's block space, and for how the broader digital-collectibles market these inscriptions get compared to has actually performed, see are NFTs still worth anything in 2026.