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Bitcoin ordinals might end up being the weirdest to teach people not your keys not your crypto, and encourage self-custody

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by COINS NEWS 122 Views

As a small overview on ordinals, Ordinals exist on the Bitcoin Network and are a way of inscribing information into individual satoshis(the small unit for a Bitcoin currency). You can "inscribe" anything you want into a satoshi be it a word, block of text, media etc. It is somewhat analogous to NFT's such that you can inscribe photos into a satoshi. And all of this data is completely stored on-chain.

Now, unlike NFT's, the data of an ordinal is stored on the individual satoshi itself, rather than an NFT and a ether(Ethereum currency) being completely separate. This means that to "own" your ordinal, you must also own the individual satoshi(s). This then means a a number of things:

  1. If you want to make a new ordinal, you must hold some Bitcoin in your own wallet.
  2. If you want to receive/hold an ordinal, you must also have your own wallet.
  3. You can't send the satoshis(Bitcoin) to an exchange because that means transferring ownership of the ordinal to the exchange, which is obvious not desired.

All of this point to users needing to learn how to take custody of their own funds as well as simply pushing users to engage in self-custody and Defi trading in general.

What goes even further into encouraging self-custody is the fact that ordinals have been clogging up the Bitcoin network, and this has been exposing exchanges for questionable decisions. Binance had frozen Bitcoin withdrawals due to the congestion and later implemented the Lightning network. Coinbase has also et failed to implement the Lightning network. Kraken seemed to be the only exchange with LN support before congestion issue, meaning their withdrawals were much less affected.

All of these things pushed even more using to self-custody.

submitted by /u/OneThatNoseOne
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