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Wednesday, June 12, 2024
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Which standard preserves value better?

At first glance NFTs and Ordinals look similar, but some people argue that Ordinals may be better at storing value. Ordinals are also pure data, including images. NFTs are considered a problem because their metadata is often stored offline.

When it comes to risk profile, NFTs and Ordinals look similar. However, their risk profiles are different at the moment. Ordinals are hotter, while the NFT story is older and has accumulated more losses.

As separate items, some Ordinals have achieved valuations close to those of leading NFTs. However, the market for Ordinals is still relatively new and has yet to undergo the same evolution as NFTs in terms of trading, staking, and other use cases.

The big goal for Ordinals is to position themselves as “true digital collectibles,” with transparent, rarity records based on specific blocks. The NFT collection revolves around a utility story. NFT owners are willing to try staking or just use NFTs in games. Rather than just pure rarity, NFTs are sometimes considered trade items or as an initial fee for joining a game or protocol. Some NFTs are also used to gain access to future airdrops.

Ordinals also emerged later than NFTs and hit some important milestones in the release of collectibles. The effect of Ordinals may be to provide rarity as a key feature. For scalability, collectible images can also be attached to Runes and they will be more like NFTs with partial off-chain computation. But Ordinals will always be tied to a specific Satoshi engraved with the data.

Additionally, Ordinals will always have all data available on-chain. In the case of NFT collectibles, publishers may sometimes have to secure their images with long-term storage and storage.

Is the NFT and Ordinals market resurgent?

As of June 2024, the NFT market has turned neutral, with a base trade of $15-30 million per day based on data OKX. The total value of the more than 1 million NFTs tracked is approximately $40 billion. Blue chip collections continue to trade and some have achieved significantly high prices.

New Bitcoin collectors are starting to build a presence and turn into memes. Ordinals is yet to be driven by the same communities that already hold NFT collectibles. According to statisticalthe value of top Bitcoin-based Ordinals collectibles is under $900 million.

Not all Bitcoin collections are tracked, and currently, the number of transactions on the market remains limited. For some users, it is possible to mint Ordinals-based images via the Ordinals (ORDI) protocol. However, the high price of storing data directly on the Bitcoin blockchain may prevent mass minting from being possible through Ethereum, Solana, Polygon, and other scalable blockchains.

Ordinals Value is not guaranteed

Some Ordinals were engraved early for testing. Others created during the 2024 boom are showing similar signs as NFTs for resale.

There have been Ordinals resales where the collectible has lost more than 98% of its value.

Even one of the original Ordinals Punks is down 78% due to limited demand. The original Bitcoin Punks were a very limited collection of 100 Ordinals, held in a total of 82 wallets.

Ordinals also aims for transparency, as collections can be seen before minting. Because the market is illiquid, some buyers may bet on the total rarity of the inscription, willing to hold during times of illiquid market.

Source: Brain Box

For NFT collectibles, the initial reveal and trading is a busy period of price discovery, where bots and traders look for rare characteristics and establish a price floor.

Ordinals are easier to predict because keeping track of rare line order and position is known in advance. The creation of Ordinals turns each Satoshi into a unique inscription, allowing projects to choose attractive numbers. The image itself is added as a payload to regular Bitcoin transactions.

Since the Ordinals theory is already known, the new standard allows existing NFT collectibles to also migrate to Bitcoin. However, Ordinals can also be engraved on other, lower-cost blockchains. Moving Ordinals will require gas payments depending on current conditions on the blockchain and other users’ trading decisions.

Due to their technology, Ordinals can be considered potentially more scarce. Finding space on Bitcoin blocks is also a rare resource. For now, however, there is no clear winner in the battle between Ethereum NFTs and Bitcoin Ordinals, with each side tapping into their social media audiences. Both standards have caused network congestion on their respective blockchains, causing the capital community to target financial and payments use cases first.

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According to Cryptopolitan

Mark Tyson
Mark Tyson
Freelance News Writer. Always interested in the way in which technology can change people's lives, and that is why I also advise individuals and companies when it comes to adopting all the advances in Apple devices and services.
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