In the blockchain, the term "inscription" mostly refers to the transaction data of Bitcoin on the chain and the information contained in Bitcoin blocks.
Each Bitcoin block contains a batch of transactions, and the information of these transactions, after being processed by encryption algorithms, is embedded in the Bitcoin block as a hash value. This hash value is akin to the "inscription" of the block, a unique identifier formed through a special algorithm.
The generation of this hash value uses encryption algorithms such as SHA-256, ensuring the uniqueness and irreversibility of each Bitcoin block.
Therefore, once a block is formed, the "inscription" within it becomes the unique identifier for that block, ensuring the security and tamper-proof nature of the Bitcoin blockchain.
The term "inscription" first originated in the Bitcoin ecosystem.
The Ordinals NFT protocol, based on Bitcoin, records data, images, audio, video, and even software information in transaction details.
The Ordinals protocol is a system numbered for satoshis, assigning a sequence number to each satoshi and tracking them in transactions. In short, users can attach additional data through Ordinals and conduct transactions, a process referred to as "recording".
Ordinals are directly recorded on individual satoshis, which are then included in Bitcoin blockchain blocks. Ordinals reside entirely on the blockchain, without the need for side chains or separate tokens. In this sense, Ordinals' recording inherits the simplicity, immutability, security, and durability of Bitcoin itself.
Ordinals allow users to create unique NFTs by attaching additional data, meaning that besides JPEG, PDF, movies, and audio files can also be used to create Ordinals, making individual Satoshis unique NFTs.
Due to the limited total supply of Bitcoin, only 21 million, the total number of inscriptions that can be engraved is also limited. In the NFT space, uniqueness and scarcity add higher value to NFTs, and early Bitcoin NFT inscriptions may become increasingly precious.
According to data, the total number of Bitcoin inscriptions has reached 35 million, with a total cost of 2119.8 BTC. Looking at the growth in quantity, it has been steadily increasing since the inception of inscriptions.
Predictive data from March this year shows that by 2025, the total market value of Bitcoin inscriptions will reach $5 billion. Meanwhile, the recent market values of two inscription projects ORDI and SATS, launched on exchanges, are $1.15 billion and $12.94 billion, respectively. This indicates that predictions for the entire inscription market are significantly underestimated.
Due to the continued popularity of inscriptions, inscription projects have also started to migrate from the Bitcoin network to other public chains, including ETH, Solana, EOS, TON, and even IOST, Conflux, etc. With the emergence of more inscription projects, the scarcity and uniqueness of early inscription projects are being diluted by more newcomers.
Along with the rising FOMO sentiment around inscriptions, including Bitcoin, miners from various public chains have also gained substantial profits. According to media interviews with Bitcoin miners, compared to the time before the inscription frenzy, Bitcoin mining profits have increased by 60-100%, achieving a direct doubling of income.
The eruption of the inscription trend has sparked competition among exchanges and wallets, indicating that inscriptions are not only popular among investors but also attracting attention from platforms such as exchanges. These platforms and individuals contribute to the promotion of inscriptions.
In summary, inscriptions are the bold pioneers in the current blockchain market, driving market sentiment amid slight improvement. However, with the emergence of more projects riding on the trend, investors still need to stay vigilant to prevent asset losses.