Understand the difference between Bitcoin NFT and Ethereum NFT, and grasp the meaning of Bitcoin NFT

php editor Apple today brought you an article about the difference between Bitcoin NFT and Ethereum NFT. In recent years, NFTs (non-fungible tokens) have become a hot topic in the blockchain world. Bitcoin NFT and Ethereum NFT are the two most common types. Although they all belong to the category of NFT, there are some differences in technology and usage. By reading this article, you will be able to understand the core concepts and differences between Bitcoin NFT and Ethereum NFT, helping you better understand these two fields. Come and follow php editor Apple to explore the mysteries of Bitcoin NFT and Ethereum NFT!

What is Bitcoin NFT?

Bitcoin NFTs refer to NFTs (non-fungible tokens) minted on the Bitcoin network.

Bitcoin’s NFT asset issuance process is actually the process of attaching arbitrary data (such as text or pictures) to Bitcoin’s smallest unit “Satoshi”, also known as “engraving/inscription”.

In December 2022, Bitcoin developer Casey Rodarmor released an open source software called ORD that runs on Bitcoin Core software.

ORD allows users to mint Bitcoin NFTs on the Bitcoin blockchain in a two-step process. First, users can enter arbitrary information, such as text or images, also known as inscriptions, on the Bitcoin blockchain. Second, users can connect the uploaded inscription to a specific satoshi (the smallest unit of Bitcoin), which is called an ordinal. The final product is an inscribed satoshi, a Bitcoin NFT. It should be noted that 1 BTC is equal to 100,000,000 satoshi.

The Bitcoin Ordinal Protocol was created by Bitcoin Core contributor Casey Rodamo. He introduced a concept called "inscription" into the blockchain. An inscription can be thought of as a piece of data and is published to the Bitcoin blockchain when a transaction is made.

This protocol was officially released on January 21 this year. By binding the inscription to the smallest unit of Bitcoin "Satoshi" (SAT), users can create unique NFTs on Satoshi. This means that any form of digital artwork, a digital asset like virtual real estate, can be stored on the Bitcoin blockchain and become a non-fungible token.

Satoshi's binding to the blockchain ensures its security, immutability, and ease of transfer, making it unique and valuable. As a result, Bitcoin NFTs quickly gained popularity in the NFT community.

In recent years , information and knowledge related to crypto assets are spreading rapidly in the mass market. Many news media have reported on the collection value of Ethereum NFTs, and some have even become successful models. The general public's interest in digital art has also grown rapidly. This This is also the reason why Bitcoin NFT has risen rapidly in a short period of time.

For artists and collectors, the blockchain technology used to create NFTs offers a level of transparency and security, while the profit potential of high rewards attracts investors to this market.

The difference between Bitcoin NFT and Ethereum NFT

Bitcoin’s NFT essentially attaches arbitrary data to Bitcoin’s smallest unit “Satoshi”, while Ethereum’s NFT No attachment is required, any data itself is an NFT asset.

Bitcoin's NFT must rely on "Satoshi", which is one 100 millionth of a Bitcoin, so even if the attached data (NFT) is worthless, at least this NFT can also be used as a Gas fee , or worth one hundred millionth of the price of a single Bitcoin. However, Ethereum's NFT cannot be used as a gas fee, and if the NFT price returns to zero, it itself will not make much sense.

The maximum supply of Bitcoin is 21 million, which means that in theory there are only 210 trillion "Satoshis" at most, so there is an upper limit on the number of Bitcoin NFTs, and There is no upper limit on the number of Ethereum NFTs or any Token types.

In addition to these, there are many differences between Bitcoin and Ethereum's NFTs. The core reason for these differences is that Bitcoin does not support smart contracts, while Ethereum's programming language Solidity supports smart contracts. write.

Bitcoin NFT explodes in popularity! Why?

Beginning in early 2023, the price of Bitcoin began to rise, and at the same time a protocol called "Bitcoin Ordinals" was released. The new type of collectibles quickly became a craze, and currently more than 200,000 Bitcoin NFTs have been created on the market.

Some experts believe that these two trends are related. The emergence of Bitcoin NFT is likely to be one of the reasons why Bitcoin has soared from US$16,000 this year to more than US$25,000, because Bitcoin NFTs open up huge new growth potential and lead to an increase in online transactions.

Although it may not be good news for Bitcoin purist supporters, according to a new report from Galaxy Research, the Bitcoin NFT market is expected to reach a market size of $4.5 billion by 2025.

This is a quite groundbreaking development, a bit like the Crypto Kitties craze of Ethereum back then. At that time, even due to the congestion of the Ethereum network and high Gas fees (miner fees), Ethereum’s The smart contract community was divided at first.

Everyone knows that starting from 2021, the NFT market will grow rapidly and receive a lot of attention. The NFT bull market that has emerged in recent years is, to a certain extent, driven by the market’s enthusiasm for Ethereum NFTs, because Ethereum NFTs are unique in being able to authenticate the creator’s digital assets, and this mechanism can be copied infinitely. In the world of digital commodities, these digital assets have a scarcity value.

Well-known projects such as CryptoPunks have driven the development of the NFT ecosystem.

NFT has also driven the development of digital art, and popular works such as CryptoPunks and Bored Ape Yacht Club have set amazing transaction records. This year, Bitcoin NFT joined the digital art ecosystem as the latest member.

Bored Ape’s parent company also joins the Bitcoin NFT battle

If you have had a little contact with NFT, then you must have heard of Bored Ape. Yuga Labs, the super-successful Metaverse studio that created Boring Ape, also launched the Bitcoin NFT project "TwelveFold". In early March, it successfully completed an auction of 288 items, with the highest bid reaching 7.1159 Bitcoins (BTC).

Studio Yuga Labs also released the Bitcoin NFT project "TwelveFold".

Although TwelveFold’s auction model is somewhat controversial and has caused dissatisfaction in the community, Yuga Labs’ participation in Bitcoin NFT is still representative and will encourage other artists to mint and sell their own Bitcoin NFT, and may even Attract major NFT platforms such as OpenSea to join the Bitcoin NFT ecosystem, providing more opportunities for artists and collectors.

Two sides of Bitcoin NFT

Technically, Bitcoin NFT is created by extending the token prototype, while Ethereum NFT is built using smart contracts.

Therefore, Ethereum NFT has more functions and flexibility, such as setting permissions, specifying contract logic, etc., while the functions of Bitcoin NFT are relatively simple. However, because the security of the Bitcoin blockchain has been widely verified, it cannot be tampered with and has the highest security.

The original intention of the development of Bitcoin is very simple. It just hopes to conduct transactions as a peer-to-peer electronic cash flow system. It has not thought about storing files on the chain. So when the new technology of Bitcoin NFT appeared, there were actually negative voices in the market, and there were also polarized reactions in the Bitcoin community.

For the existing NFT market, Bitcoin NFT does not use smart contracts, so creators or artists cannot obtain royalties from Bitcoin NFT and can only obtain income from the first auction.

However, compared to Ethereum’s NFTs, the cost of transferring Bitcoin NFTs is relatively low, so investors may be more willing to conduct transactions to make the secondary market activities of Bitcoin NFTs active. In addition, because Bitcoin NFT is created on Satoshi (SAT), the rarity of Satoshi itself may also become one of the important factors affecting the value of Bitcoin NFT.

Opponents believe that Bitcoin NFT violates the original intention of peer-to-peer electronic money flow. Moreover, Bitcoin NFT will rapidly increase the block size on the chain, resulting in higher requirements for node operating equipment, resulting in a smaller number of nodes and a lower degree of decentralization. At the same time, new technologies may also introduce unknown security risks to Bitcoin.

With the evolution of time and technology, the Bitcoin blockchain also has functions other than simple "currency transactions". The emergence of "inscriptions" has given the Bitcoin blockchain new potential, driving new applications and attracting more people's interest, and even having the opportunity to expand the possibility of adoption.

According to Galaxy’s report, the Bitcoin NFT ecosystem will be fully developed in the third quarter of 2023. Considering that Bitcoin NFT has just started at the beginning of this year, it will be very amazing if it can achieve such an achievement.

Currently, crypto wallets such as Ordinals Wallet have appeared in the market, and they have begun to provide Bitcoin NFT-related support to improve user experience. With more and more infrastructure, Bitcoin NFT may have a future booming development.

Although CoolWallet currently does not support Bitcoin NFT, as a cold wallet that has been paying attention to the market and improving continuously since 2016, we are still optimistic about various innovations in the currency circle and will Follow up on developments to provide the best service to our community.

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