Ordinals NFTs: Bitcoin’s scripting language and the Ordinals protocol

The advent of Bitcoin Ordinals, a method to inscribe arbitrary content directly onto individual satoshis (the smallest unit of bitcoin), has opened up new possibilities for utilizing the Bitcoin blockchain beyond its traditional use as a digital currency. This innovation has paved the way for the creation of non-fungible tokens (NFTs) on Bitcoin, leveraging the security and widespread adoption of the network. Developing a smart contract for Bitcoin Ordinals NFTs, however, requires a nuanced understanding of Bitcoin’s scripting language and the Ordinals protocol. Here’s a guide on how to develop a Bitcoin Ordinals NFT smart contract.

Understanding Bitcoin Script

Before diving into the development of a Bitcoin Ordinals NFT smart contract, it’s crucial to have a solid grasp of Bitcoin Script. Bitcoin Script is a simple, stack-based programming language used to define the conditions under which bitcoins can be spent. While it is intentionally not Turing-complete to avoid loops and ensure predictability in execution time, it is versatile enough to create complex spending conditions.

Grasping the Ordinals Protocol

The Ordinals protocol involves inscribing data onto individual satoshis. This is achieved by creating a transaction that includes extra data in the witness part of a SegWit input, effectively “inscribing” that data onto the satoshi being spent. These inscriptions can include anything from simple text to images, and in the context of NFTs, metadata that represents ownership or attributes of a digital asset.

Step 1: Conceptualize Your NFT

Before coding, clearly define what your NFT will represent, its attributes, and how it will be unique. Decide on the metadata structure and how it will be stored within the Ordinal inscription. Remember, the size of inscriptions is limited, so efficiency is key.

Step 2: Set Up Your Bitcoin Development Environment

Ensure you have a Bitcoin node set up and synced, and familiarize yourself with the tools and libraries available for interacting with the Bitcoin blockchain and creating transactions, such as Bitcoin Core, libwally, or BTCPay Server.

Step 3: Create the Inscription Data

Prepare the data you wish to inscribe onto a satoshi. This will include the NFT metadata and any other relevant information. The data must be serialized in a format that is both compact and retrievable. Common formats include JSON or CBOR (Concise Binary Object Representation).

Step 4: Construct the Inscription Transaction

Using your chosen Bitcoin library, create a transaction that includes your inscription data in the witness part of a SegWit input. This transaction will effectively mint your NFT by inscribing its metadata onto a satoshi. Pay careful attention to transaction fees and ensure that your transaction is properly constructed to avoid errors or loss of funds.

Step 5: Implement Ownership and Transfer Logic

While Bitcoin Script is limited, you can implement basic ownership and transfer logic for your NFT by utilizing Bitcoin’s multisig capabilities or OP_RETURN outputs for simpler cases. For more complex logic, consider leveraging secondary layers or sidechains that are compatible with Bitcoin, such as the Liquid Network or RSK.

Step 6: Test Thoroughly

Before releasing your NFT into the wild, thoroughly test the inscription and transfer processes. Use testnet bitcoins to avoid unnecessary expenses and ensure that your NFT behaves as expected in various scenarios.

Step 7: Launch and Monitor

After testing, launch your NFT by inscribing it onto a mainnet satoshi. Monitor the transaction until it is confirmed and your NFT is officially part of the Bitcoin blockchain. Provide clear instructions for future owners on how to transfer ownership, if applicable.