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Bitcoin Ordinals Custody Solution Gets Better with Bitcoiner Values

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Casey Rodamor’s Ordinal project has grown from a niche interest to an accelerating technology that attracts the attention of collectors and developers inside and outside the Bitcoin world. Love it or hate it, at least at the time of writing, the Ordinal grows like a hockey stick.

This project is just getting started. The market has yet to pick a credible word between Bitcoin NFTs, inscriptions and ordinal numbers, although I personally prefer ordinal numbers, there are signs that we are getting closer to adoption.

Johann Sheafson is a fundamentally oriented crypto analyst and commentator. You can follow him on Twitter. @0xsheafsonThis article is from CoinDesk “Culture Week”.

Case in point: Yuga Labs, which owns Bored Apes Yacht Club, CryptoPunks and Meebits, recently won 735 BTC (~!$16.5 million) in an Ordinals-based ‘Twelvefold’ auction. Cultural judgments aside as to whether this is Bitcoin’s big boon or an example of a sell-out, it’s a meaningful risk-aversion event for Ordinal and a test of the category’s future growth potential.

However, Bitcoin’s product stack (including infrastructure, tools, and platforms) that enables ordinals to be collected and traded is the product stack of alternative ecosystems with mature non-fungible token (NFT) markets such as Ethereum and Solana. much later than

Example: Custody. For Ordinals collectors who haven’t spent time in the existing NFT ecosystem, below is an early Ordinals collector’s take on the custody products currently available and how they’ll hold up over the coming weeks and months. Shows how to evolve.

Storing Bitcoin NFTs Today

Today’s ordinal collector has several key management options.

  1. Hot open source local wallet (Ord code and full node on Github, Sparrow)
  2. Closed-source web wallets for storage (Ordswap.io, Ordinalswallet)
  3. Open Source Cold Wallet (Ledger + Sparrow)

The first option is suboptimal for the average ordinal collector. For the same reason, it is the next best thing for the average Bitcoin (BTC) holder. Most users don’t want to run a full node and the Sparrow wallet (a great open-source bitcoin wallet that gives power users fine-grained control and visibility) is too complicated for mass adoption. not.

The third option – using a hardware wallet with Sparrow – offers the best “security sans trust”, but along with the first option is too difficult and accident prone to be adopted by inexperienced users. There is a problem.

See also Bored Ape-Parent Yuga Labs’ Next NFT Will Run on the Bitcoin Blockchain / Web3

As is the case with NFT users on other chains, the average Bitcoin Ordinals collector will gravitate toward option 2 as it trades security for convenience. Self-managing core bitcoin value.

Aside from custody, the two big problems with wallets today are the lack of an easy and secure user experience (UX) for the two most commonly expected user behaviors: money transfers and transactions. That’s it.

Problem 1: Ordinal Transfer

Current wallets (outside of Ord that require full node execution, Github knowledge, and interaction via command line) offer no or only half-hearted support for Ordinal. Many users accidentally send or burn their precious Ordinals by mixing them with BTC in Ord-incompatible wallets.

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ordinal ux transfer status today

Problem 2: Ordinal handling

To date, most Ordinals buying and selling have required expensive and trusted intermediaries such as third-party escrow services. Trustless transactions are the table stakes UX of smart contract based chains and should be in Bitcoin too.

But why cater to left-curve degens from alternative chains? Most of Ordinals’ growth comes from existing NFT users or first-time Bitcoin or crypto users. I don’t think Ordinals (or Bitcoin) will grow out of just existing Bitcoin users.

Ordinal Solutions Should Accept Bitcoin Value

As the adoption of Ordinals (and the adoption of Bitcoin and Bitcoin applications) grows, peripheral users increasingly resemble the average NFT user in communities based on Ethereum or Solana. In my opinion, products designed for this user profile should promote three main goals: friendliness, self-sovereignty, and lack of trust.

friendliness

If you believe that all products should maximize control and customization at the expense of ease of use and perceived friction, or that user safety and protection are for bearish plebs who don’t deserve coins/chains If you think about it, we disagree. A good custody product for the mass market should be designed for the lowest common denominator user. This means maximizing convenience and ease of use and minimizing user error and cognitive friction.

self-sovereignty

That said, I do stand apart in not compromising our movement’s prescriptive maxim, “It’s not your coin, it’s not your key.” Self-management is certainly difficult. People forget or lose passwords, seed phrases, and private keys. But products that give self-control instigate the sanctioned institutions we seek to disrupt and perpetuate the problematic patterns of behavior we seek to reform.

Sense of distrust

Finally, we need to evolve beyond trading through trusted intermediaries such as escrow services and OTC. [over-the-counter] broker. Fortunately, widely adopted standards like partially signed Bitcoin transactions (PSBT for BIP 174) are already being implemented by upcoming wallets and exchanges to achieve this goal. increase.

Gold Standard Custody and Interactive UX

In my opinion, the ideal Ordinals protection and interaction experience should possess the following characteristics:

  1. Cold hardware wallets that hold keys (e.g. Ledger) – bonus if air-gapped from the web (e.g. Foundation Devices)
  2. An open-source browser wallet for interacting with apps such as exchanges
  3. Ordinal compatibility between (1) and (2) means the average user doesn’t need to run Ord
  4. Ability to import surveillance-only wallets from (1) to (2):
  5. An interaction flow (1) that allows users to sign transactions (e.g. PSBT) using a hardware wallet without exposing the keys

This is, in theory, how to use an air-gapped hardware wallet.

  1. The browser wallet is triggered when the user wants to send or interact.
  2. Your browser wallet will generate a PSBT in the form of a QR code.
  3. Users scan this QR code with their air-gapped hardware wallet. A hardware wallet generates a new QR code for signed transactions.
  4. The user scans the new QR code in their browser wallet. That browser her wallet confirms the transaction is valid and broadcasts it to the Bitcoin network.

To be widely adopted, the above should be wrapped in an easy-to-use UX that minimizes user mistakes. (Thanks to @bitcoinbeezy for helping me think about this flow. )

mass adoption

We believe the ordinal (and the technology and social consensus that makes it possible) represents a historical inflection point for Bitcoin and will catalyze the next phase of mass adoption of the network by a multitude of new users and applications. .

See also Bitcoin Ordinal Could Lift Entire Crypto Ecosystem / opinion

As of this writing, the team shipping the “next generation” consumer wallets includes Hiro (supports PSBT, but not transferable), Unisat (supports PSBT, but poor UX and untransferable), and Oyl (not yet released). In the advanced user and enterprise markets, Casa currently supports Ordinals transfers, but the UX is clunky and Trident Wallet will support Ordinals soon.

We want to support the team that promotes the “gold standard UX” mentioned above.

The views and opinions expressed herein are those of the authors and do not necessarily reflect those of Nasdaq, Inc.



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    Bitcoin Ordinals Custody Solution Gets Better with Bitcoiner Values