Bitcoin is trying out non-fungible tokens (NFT) again.
First there were colored coins in 2012, which were aimed at representing all types of non-bitcoin assets on Bitcoin.
Then came Counterparty in 2014, which was built as a derivative of Bitcoin and allowed the creation, buying and selling of digital assets powered by its XCP token. Counterparty is where “Rare Pepes” – NFTs inspired by the Pepe the Frog meme – were born in 2016, which far predate the NFTs of Ethereum we know today.
This profile is part of CoinDesk’s “BUIDL Week.”
This time around, it’s Ordinal NFTs and inscriptions, which are made possible by the Ordinal protocol developed by Casey Rodarmor.
I interviewed him for BUIDL Week.
Rodarmor has worked in technology since 2010. He spent time working for Google before a brief stint at Chaincode Labs doing some nominal work on Bitcoin Core, the protocol’s main code implementation. He now acts as a co-host of SF Bitcoin BitDevs in San Francisco after taking over from River Financial founder Alexander Leishman last year.
Bitcoin BitDevs, which started in New York City, is a community that hosts monthly meetups to discuss some of the more technical aspects of Bitcoin. Rodarmor’s place at the helm in San Francisco is an indication of his commitment to testing out new Bitcoin ideas. Bitcoin BitDevs is a critical piece of Bitcoin’s grassroots culture.
He now works on Ordinals full time, he said during our interview. The project now has paid interns (Liam Scalzulli and RaphJaph) and paid Discord moderators.
Rodarmor is a Bitcoiner, and no one can tell him otherwise. He got into Bitcoin because he “hate[s] the government” and is in the “sound money camp” when it comes to Bitcoin, he told the “Stephan Livera” podcast earlier this month. He likes Bitcoin because it is better, nonstate money with a predictable, sound monetary policy; it’s not because it can enable NFTs.
Still, he’s now best known as the guy who enabled the most recent iteration of NFTs on Bitcoin.
Rodarmor started working on Ordinals in 2022. During the conversation Erin, his personal assistant and podcast co-host of Rodarmor’s podcast “Hell Money”, was sitting on a couch in the background. I also noticed a trap bar deadlift barbell to Rodarmor’s right when he adjusted his camera.
“Do you lift?” I asked. “Yeah!” he responds, but laments that lifting in his apartment proved pretty loud. He adds that he thinks he has some “pretty juicy traps.”
He does. Rodarmor looks relatively fit for someone who develops software full time.
He originally learned about NFTs in 2017 and wasn’t particularly interested in the type of digital art that was being created, bought and sold. He toyed with the idea for an auction house for digital art at the time, but only briefly. Then came Art Blocks, an influential generative digital art project on Ethereum founded by Erick Calderon. Its new aesthetic caught Rodarmor’s eye.
Rodarmor was inspired to work on a Ethereum smart contract using Solidity but became frustrated with Ethereum, which he describes as a “Rube Goldberg machine.” He didn’t like the idea of building NFTs on Ethereum so he gave up that idea. Then, in early 2022, he picked up the idea for NFTs again and wanted to figure out how to do it on Bitcoin.
When he started working on Ordinals, he told me he drew inspiration directly from Bitcoin’s pseudonymous founder Satoshi Nakamoto. Satoshi included references to something called “atoms” in the original Bitcoin codebase and it was from there that Ordinal theory was born. (For the technically inclined or generally interested, check out Jeremy Rubin’s annotation of the original Bitcoin codebase.)
Part of Rodarmor’s motivation is to make Bitcoin fun again (as he tweeted earlier this year about Bitcoin NFTs). It is a bear market after all. He certainly seemed to be enjoying himself during our interview.
Ordinals are hilariously simple, at least in theory. The Ordinal protocol outlines a way in which to sequentially number satoshis – the smallest unit of bitcoin, which represents 1/100,000,000 of a bitcoin. And once satoshis are given a serial number, users can inscribe data onto those satoshis to make digital artifacts, which is Rodarmor’s preferred term over NFTs.
Not because these aren’t NFTs, but because these NFTs are a touch better, in his view. Inscriptions are always immutable: the art, text or whatever inscribed data is put directly on the blockchain. This differs from most other types of NFTs that tend to store the actual JPG or text file somewhere else and then put a link to that data on the blockchain. Whether you care about NFTs or not, this is a clear upgrade to the immutability of NFTs.
Somehow, this seemingly simple technology update has come with quite a bit of embedded seriousness. Some OGs in the space have described Ordinals as an attack on Bitcoin’s founding mission to conduct unfettered financial transactions. People who support Bitcoin want Bitcoin to survive. They also tend to own bitcoin and they want their bitcoin to be safe. Anything that could be construed as a threat to the Bitcoin protocol is a threat to the sovereignty of bitcoin users and holders.
And so Rodarmor has found himself as the main character of this season’s Bitcoin Crisis.
I asked how he felt about being on the receiving end of much criticism.
He thought that the “vibe was now very good once [he] got to know where his critics were coming from.” He was initially very defensive, but once he started taking the time to engage with the more thoughtful, careful critics through some one-on-one conversations there was substantial common ground. Rodarmor feels that the Bitcoin community is mostly filled with these types of thoughtful critics. Those who are “yelling for the sake of yelling” are in the minority (even though they are loud on Twitter).
Of these thoughtful critics, Rodarmor referenced conversations with Blockstream’s Warren Togami. Togami founded Fedora Linux, a distribution of the open-source computer operating system Linux, so his understanding of open-source projects is credibly good.
Togami says that if the Bitcoin community decides different fee rates are appropriate for different classes of traffic on the Bitcoin network (read: regular financial Bitcoin transactions vs. Ordinal NFT Bitcoin transactions), that’s up to them. As a community project, isn’t it up to Bitcoiners to decide and then consequently run code that can add quality of service information like priority to transactions? (Here’s a somewhat technical tweet thread that touches on this topic.)
Rodarmor thinks that approach won’t work. But hopefully that’s the type of criticism and discourse that is good for Bitcoin in the long run.
From the other loud Ordinals critics there are valid concerns that Ordinal NFTs will lead to irreversible chain bloat. Because inscriptions have led to an influx of large blocks, it might become more difficult for new node participants to start up due to the immense amount of data that will accumulate over time. New node participants are critical to maintain Bitcoin as a decentralized, permissionless and robust monetary network – where those without economic majority can still have input in how Bitcoin should be run.
In theory, Ordinal NFTs could increase transaction fees which will incentivize miners to stick around in the future once the block subsidy ends. The block subsidy is the new bitcoins which are awarded to miners for successfully mining a block. It is the main way miners are financially compensated now.
Miners help secure the Bitcoin network so when that subsidy goes away, transaction fees may need to increase so that miners don’t leave the network en masse.
Projects like Ordinals could improve Bitcoin’s economics, helping to solve its growing security budget problem.
I’m not sure where I land on whether Ordinal NFTs will fix Bitcoin’s security budget problem. But I asked Rodarmor what he thought.
His response? “YOLO. Let’s find out.”