Ordinals are cryptographic “inscriptions” on individual satoshis that have been part of the Bitcoin blockchain since the Taproot upgrade. They allow the embedding of metadata, thereby enabling NFT-like functionality directly on Bitcoin.
In 2025, Ordinals have regained relevance and raise central questions about usability, costs, and Bitcoin’s relationship with digital assets. Data from 2025 shows that Ordinals inscriptions and the associated trading volume are increasing. Individual days with volumes exceeding USD 11.5 million demonstrate heightened activity. At the same time, according to recent reports, there are over 75 to 80 million total inscriptions and network fees in the millions. Critics warn that rising fees, network congestion, and ideological conflicts could reduce the usefulness of Ordinals for certain user groups.
Subscribe to our newsletter
The best articles of the week, directly delivered into your mailbox.
Bitcoin Taproot upgrade lays the foundation for Ordinals
The Bitcoin Taproot upgrade in November 2021 introduced the idea of embedding metadata into Bitcoin denominations. Unlike traditional NFTs, the so-called “inscriptions” involve a process that embeds data into the record of a Bitcoin transaction. This is made possible through the use of satoshis or “sats,” the smallest unit of Bitcoin. Each satoshi is assigned a serial number - an ordinal - that can be inscribed with data. The serial number is based on its mining order, i.e. when the satoshi was mined during the proof-of-work process for transaction validation.
The rarity and value of an ordinal do not depend solely on its inscription or supply scarcity. The value of certain ordinals is tied to the time of their creation or, in other words, their specific serial number. Sats inscribed early or whose serial numbers mark significant moments in Bitcoin’s history are more valuable than others.
The difference between Ordinals and NFTs
Although both are non-fungible, Bitcoin Ordinals differ from traditional NFTs in how metadata is stored. Traditional NFTs typically store data off-chain, with URL references that point to an image or video file. Ordinals use inscriptions to store content directly on the blockchain. This design increases decentralization and censorship resistance. However, it comes with higher creation and transaction costs as well as size limitations for inscriptions.
Another notable difference lies in the method by which these NFTs are added to their respective blockchain networks. Bitcoin Ordinals use proof of work (PoW) in the mining process, contributing to the Bitcoin network’s significant energy requirements. By contrast, NFTs on smart contract blockchains use proof of stake (PoS) and generally offer faster transactions.
Criticism, costs & technical debates
A noticeable consequence of the trend was the increase in Bitcoin fees and persistent congestion in the mempool due to unconfirmed transactions. In early December 2023, the average transaction fee was USD 30. Before that, the average fee was around 1-2 dollars. Since the initial hype, transaction fees have flattened again. Some Bitcoin purists are therefore concerned that Ordinals could undermine Bitcoin’s original purpose - as digital money and a store of value.
On the other hand, supporters praise the fact that miners benefit from the additional fees and that new innovations become possible, such as protocols like Runes, which enable fungible token pathways via Ordinals. These token standards are driving part of the current demand for inscriptions.
