5 must-knows about ordinals for crypto investors in 2024

Ordinals have carved out their own niche in the crypto market over the last year. So what are they all about?

Though they're relatively new arrivals in the crypto space, tokens like ordinals and runes have attracted significant attention. Here are some of the key things to be across as someone in the crypto space.

1. What ordinals (and other tokens) are

If you're reading this, you're probably familiar with Bitcoin (and if not, here's a primer).

Just like a dollar can be split into cents, so can an individual Bitcoin be divided into smaller amounts.

The smallest unit of all is a satoshi, equivalent to 0.00000001 of a Bitcoin. In turn, these can be used to create an ordinal, rune or BRC-20.

Now, each of these satoshis already has a unique serial number. So when you use one to create an ordinal, you can attach specific digital data, creating a unique digital product. It's similar to an NFT, but not quite the same (more on that in a bit).

Runes, by contrast, function as something of an upgrade to the prior BRC-20 standard. In practical terms – memecoins and community tokens have arrived for Bitcoin, without the system bloat caused by previous iterations.

You can read a more comprehensive rundown about ordinals and runes right here on Finder.

2. How they fit into the crypto ecosystem

One of the key drivers for interest in ordinals, runes and BRC-20 is the fact that they build on existing ideas in the crypto space. The most obvious comparisons are NFTs and the program-hosting capabilities of ETH, though there are others.

What sets ordinals, runes and BRC-20 apart is the fact that they're attached to Bitcoin, which remains the largest cryptocurrency. Investors and the media often view Bitcoin as the standard for cryptocurrencies – so any new development tends to stir up a lot of interest.

Additionally, because they're attached to satoshis (rather than whole Bitcoins), the price of entry can be more attractive.

3. Where you can buy them

Just like other cryptocurrency products, ordinals and other tokens can be bought via a crypto exchange.

However, if you're interested in investing in ordinals or runes, you should check whether an exchange offers them for sale first. You'll also need to confirm that your crypto wallet is compatible with these products; not all of them are.

One exchange that offers ordinals for sale and trade is OKX. OKX also offers a Web3 wallet that's compatible with ordinals, runes, BRC-20 and many other types of cryptocurrency.

To find out more, you can also read a review of OKX right here on Finder. And we've also got some tips on picking a crypto exchange, too.

It is important to remember that cryptocurrency can be a risky investment; it's worth consulting with a financial professional before investing in crypto to determine whether crypto investment is aligned with your financial goals and risk tolerance.

Learn more about investing in ordinals with OKX

4. What you can use them for

Though plenty of crypto enthusiasts are keen to see cryptocurrencies adopted for everyday payments, this isn't necessarily the majority view anymore. Beyond pure investment, many crypto fans are keen to see how the blockchain can help power (or store) future tech.

The discussion that filters out to the wider public has tended to revolve around the potential for smart contracts, storing programs and in-game features. Hasbro even experimented with including them in action figures – albeit to very mixed consumer response.

In practical terms, ordinals and runes build on previous ideas; they can be used to store artwork, data, audio and in-game assets (such as character avatars). There are limits on the data size, but we're likely to see increased innovation in this space as users grow more creative within the constraints.

5. Why they differ from traditional NFTs

At a surface level, ordinals and NFTs are very similar. They both allow for data to be stored in a digital form, which in turn can be bought, sold or exchanged.

However, there are some differences, primarily between the way they are stored and the functionality they offer.

Ordinals are tied to the Bitcoin blockchain itself, with ownership or transactions verified by external consensus (as are other Bitcoin transactions).

NFTs are hosted along a variety of different blockchains and ownership is typically verified by smart contracts instead. They are also often tied to a physical asset, too, which is stored off the chain.

In turn, this means the data attached to ordinals is part of the Bitcoin blockchain, while NFTs typically store the bulk of their associated data offline.

Both offer different advantages. Ordinals are also relatively new, so it's likely that the full potential of the technology hasn't been explored yet.

Crypto exchanges like OKX are also offering both for sale, so it seems they're likely to coexist in the marketplace.

Sign up to OKX and get up 50AUD in BTC