Ordinals, Inscriptions & Runes

Ordinals theory, proposed by Casey Rodarmor in late 2022 / early 2023, assigns a unique ordinal number to every satoshi (the smallest bitcoin unit: 1/100,000,000 BTC) in mining order.

That makes each sat individually distinguishable, so arbitrary data (images, text, audio, video, code) can be inscribed on a particular sat.

The important point is that Ordinals changed nothing in the Bitcoin protocol. It reinterpreted capabilities already present in the Taproot upgrade, and no soft fork was required.

Changing nothing has consequences of its own. The numbering and the attribution of inscriptions live in indexer conventions (ord and others), not in the protocol, and Bitcoin nodes do not recognize inscriptions at all. A wallet without Ordinals support may therefore spend an inscribed sat as ordinary funds, paying it out as a fee or as change. The same design is why BRC-20, discussed below, remains an off-chain convention.

In practice this called into question the assumption that "Bitcoin is for money only" and opened up new uses: NFTs, tokens, metadata, and more. Whether that counts as progress or as deviation depends on where you stand; this site reaches neither verdict and sets out both cases in "Community Controversy."

Casey Rodarmor prefers the term "digital artifacts" over "NFTs" because it stresses a sense of physical presence and permanence that the word NFT does not carry.

Taproot (BIP-340, 341, 342), activated in November 2021, introduced Schnorr signatures and MAST trees in a soft fork.

Ordinals uses Taproot's witness script area: a transaction can embed arbitrary data in the witness field. The ceiling is the standardness limit MAX_STANDARD_TX_WEIGHT = 400,000 WU (weight units), which works out to roughly 390KB of witness data.

Witness data counts at 1 WU per byte, one quarter the weight of non-witness data, which makes storing large amounts relatively cheap.

Set against the pre-Taproot OP_RETURN approach (83 bytes of scriptPubKey in total under the standardness rules, of which 80 bytes are data), that is orders of magnitude more capacity. Images, audio, and even full HTML applications can now be inscribed.

Whether this use was anticipated when Taproot was proposed is itself disputed, and it remains a source of controversy.

On December 14, 2022, Casey Rodarmor inscribed Inscription #0. Its content was a black-and-white pixel-art skull, regarded as an homage to the Bitcoin genesis block (the Ordinals software was publicly released in January 2023).

By early February, inscriptions had passed 10,000 and adoption took off. Yuga Labs (Bored Ape Yacht Club) came over from the Ethereum NFT scene with "TwelveFold," and others followed.

By the end of 2023 the inscription count passed 50 million. Total fees reached hundreds of millions of dollars and made a real difference to miner revenue.

Images dominate, but text, SVG, HTML, video, audio, and even games have been inscribed: in practice, any kind of digital asset.

Because the data itself sits on the blockchain, an inscription cannot be lost the way externally hosted content disappears when hosting stops. "Permanent" without qualification overstates it, though. First, pruned nodes and light clients do not retain witness data. Second, which sat a given inscription belongs to is settled by ord-family indexer conventions, outside the consensus rules. Third, if a wallet without Ordinals support spends that sat as a fee or as change, the attribution is effectively gone. The design philosophy does differ sharply from Ethereum NFTs that rely on IPFS or centralized servers, but what changes is where the dependency sits: it moves from hosting to the continued operation of indexers and archives.

March 2023: a developer named "Domo" proposed BRC-20, a token standard built on Ordinals.

The mechanism is simple: deploy, mint, and transfer operations are inscribed as JSON text, and indexers compute the balances off-chain.

BRC-20 is strictly an off-chain convention, not a protocol feature. Bitcoin nodes do not recognize tokens; specialized indexer software tracks balances.

Tokens such as ORDI, SATS, PEPE, and MEME launched, and at their peak BRC-20 tokens reached several billion dollars in combined market cap.

BRC-20 is inefficient: each "transfer" needs its own inscription, which eats a lot of block space.

April 20, 2024 (halving day, block 840,000): Casey Rodarmor launched the Runes protocol.

Runes is a new design for fungible tokens on Bitcoin, aimed at fixing the inefficiencies of BRC-20.

It uses OP_RETURN (under the standardness policy at launch, 83 bytes of scriptPubKey in total, of which 80 bytes are data; Bitcoin Core 30.0 effectively removed that default cap in October 2025) in a UTXO-native design that fits Bitcoin's core model.

Combined with halving-day fee pressure, the Runes launch block (840,000) generated the highest fee revenue to miners recorded at the time: about 37.6 BTC, worth roughly US$2.4 million at prevailing rates.

Thousands of Runes have launched: "UNCOMMON•GOODS," "DOG•GO•TO•THE•MOON," "RSIC•GENESIS•RUNE." The bullet (•) is not a community convention but part of the protocol. Rune names may contain only the letters A through Z; separators are not part of the name at all but are specified by a separate "spacers" bitfield and rendered as • on display (for example, the name AAAA with spacers 0b1 displays as A•AAA).

Through the quiet market of 2022, immediately before Ordinals appeared, Bitcoin fees sat around 1 sat/vB for long stretches. Reading that as "fees were always that low before Ordinals" would be wrong: late 2017 and 2021 both saw spikes into the hundreds of sat/vB for reasons unrelated to Ordinals. The surges from 2023 onward are better read as a new source of demand layered onto that existing cycle.

The share of miner revenue that comes from fees also depends on how the figures are aggregated. On a daily-average basis, high-demand days after the halving (April 2024 onward) reached roughly 30-40%, well above the few percent that was historically typical. Measured per block, some blocks immediately after the halving saw fees exceed the block subsidy (then 3.125 BTC). The first figure is an average and the second an extreme; they do not contradict each other.

This fee premium supports miners over the long run, but it draws criticism from users who face higher transaction costs.

Ordinals-driven fee pressure also feeds into the cost of moving on and off the Lightning Network and other Layer 2 systems.

With the fifth halving approaching in 2028, fees from Ordinals are increasingly seen as a structural support for miner economics over the long run.

Ordinals triggered one of Bitcoin's fiercest debates. Luke Dashjr (a prominent Bitcoin Core developer) called them "spam" and "exploitation of a vulnerability."

The critics' case: Bitcoin was designed as "pure money." NFTs, JPEGs, and the like stray from that purpose, consume a finite supply of block space, and push fees up for ordinary senders.

The defenders' case: Bitcoin is a "permissionless" protocol. As long as valid fees are paid, nobody can block a use, and that is precisely the point. Miners also gain a new source of revenue.

Mining pools such as Ocean (with Luke Dashjr's involvement) deliberately exclude Ordinals transactions. Most major pools, however, mine them without filtering.

In October 2025, Bitcoin Core 30.0 moved the opposite way, effectively removing the default OP_RETURN cap (previously 83 bytes of scriptPubKey, 80 of them data). Node operators opposed to the relaxation have migrated to the filter-focused Bitcoin Knots, and the data-storage debate continues.

One quantitative caveat comes first. Inscriptions are not mostly images: by the end of 2023, more than 80 percent of all inscriptions were reported to be BRC-20-related text. What follows are representative examples drawn from the remainder, not a portrait of Ordinals usage as a whole.

Digital art: NFT artists moving from Ethereum to Ordinals because the data itself lands on-chain (subject to the permanence caveats above).

Domain-like identifiers: .sats (SatsDomains) and other Bitcoin-native naming systems built on Ordinals. These are agreements within indexer conventions, not an authoritative name resolution system like DNS.

Historical data preservation: classic books, open-source code, and well-known speeches inscribed with long-term retention in mind.

Game assets: fully on-chain Bitcoin-native games (small scale).

Established NFT studios: Yuga Labs (Bored Ape Yacht Club), a major Ethereum NFT house, issued the 300-piece "TwelveFold" collection on Ordinals in March 2023. Claims that large consumer brands have released Ordinals collections circulate widely, but this site does not cite them as examples because the available primary sourcing is thin.

Storage: Ethereum NFTs usually store metadata on IPFS or AWS S3 with only the reference URL on-chain. Ordinals are fully on-chain, inscribed into Bitcoin blocks.

Permanence: IPFS risks content loss if pinning fees lapse, and AWS depends on the provider. Ordinals put the data on-chain and so depend on no external host, but pruned nodes do not keep the witness data and attribution still rests on indexers. The dependency moves rather than disappears.

Issuance cost: Ethereum gas is relatively cheap; inscribing on Bitcoin usually costs more in fees.

Royalties: Ethereum NFTs can enforce royalties through smart contracts. Ordinals transfer as plain UTXOs, so royalties cannot be enforced on-chain and rely on a social contract instead.

Maturity of the surrounding market: the Ethereum side (OpenSea and others) has about 10 years of development behind it, while the Ordinals side (Magic Eden, Ordswap, and others) is still finding its feet.

Fee revenue from Ordinals matters more and more to how miners sustain themselves after each halving.

Runes has opened up active experimentation with memecoins, utility tokens, and stablecoins on Bitcoin.

Layer 2 projects such as BitVM and Babylon are developing alongside Ordinals and Runes.

Whether tokens such as Runes and BRC-20 qualify as securities depends on how regulation develops in each jurisdiction. In the United States, the SEC and CFTC issued a joint interpretive release (No. 33-11412) on March 17, 2026, sorting crypto assets into five categories: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. The creation of a digital collectibles category bears directly on this article's subject, though whether any individual token amounts to an investment contract still turns on the facts. This site gives no legal advice.

The long-term possibility is a shift in Bitcoin's identity from "money only" to "money plus digital-asset platform."