The Bitcoin ecosystem has emerged as one of the most innovative narratives in this market cycle—thriving through three mini-bull runs even during prolonged bear markets. As we approach the two-year milestone since the launch of the Ordinals protocol, this article traces the evolution of Bitcoin’s on-chain renaissance, highlighting pivotal moments, technological breakthroughs, and community-driven momentum that have shaped its trajectory.
The Birth of On-Chain Innovation: Ordinals Protocol
On December 14, 2022, Casey Rodarmor—creator of the Ordinals protocol—inscribed the first ordinal (Inscription #0), marking the beginning of a new era for Bitcoin. Unlike traditional blockchains limited to value transfer, Bitcoin now gained the ability to store data directly on-chain: images, text, JSON, GIFs, HTML files, and more.
Initially overlooked during the depths of the 2022 bear market, Ordinals slowly gained traction. By early February 2023, inscription numbers had only reached around 10,000 (today surpassing 80 million). Most early inscriptions were experimental—user-created art, small NFT collections ranging from 50 to 200 pieces—but nothing yet signaled a paradigm shift.
That changed with Bitcoin Punks.
Inspired by CryptoPunks, holders began downloading pixel art and inscribing them onto Bitcoin. This grassroots movement introduced two foundational principles that would define the entire ecosystem:
1. First Is First
Since anyone can inscribe identical content, only the earliest inscription—by ordinal number—is recognized. This principle ensures scarcity and authenticity without relying on smart contracts.
2. Fair Launch (Fair Mint)
No pre-mints or team allocations. Users inscribed their own assets, setting a precedent for permissionless innovation. This model later influenced BRC-20 tokens and Runes.
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Bitcoin Punks ignited curiosity across crypto circles. Inscription numbers surged—from 10,000 to 30,000 in under a week. Infrastructure was nearly nonexistent: users needed full nodes and technical know-how. Yet demand was so high that rare Bitcoin Punks sold for over 2 BTC.
First Mini Bull Run: NFT Mania (Feb–Mar 2023)
From February to March 2023, Bitcoin’s NFT market exploded.
- Bitcoin Punks floor jumped from 0.2 ETH (~0.12 BTC) to 2 ETH (~1.2 BTC).
- Sub-10K collections like @Block_Munchers traded OTC for up to 1.2 BTC.
- @InscribedPepe reached a floor of 1.6 BTC.
- @OrdinalPunks (Sub-1K) exceeded 2 BTC.
Trading was difficult—no dedicated marketplaces existed. Buyers scoured Discord servers, paying steep premiums just to secure deals. Early exchanges like ordinals.market and OrdinalWallet filled the gap, fueling price surges.
This period laid the groundwork for a thriving creator economy on Bitcoin—one built on decentralization, user ownership, and organic growth.
A Pause for Reflection: Bear Market Innovation (Mar–May 2023)
As NFT supply outpaced demand, prices corrected. But behind the scenes, builders kept innovating.
Key developments included:
Sats Domains
Launched at inscription #160,000+, sats domains introduced human-readable addresses using JSON-formatted inscriptions. Unlike Ethereum’s ENS, they’re free, permanent, and require no renewal. Supported by Unisat and Xverse wallets, sats domains pioneered structured data on Bitcoin—and inspired BRC-20.
BRC-20 Emerges
Developer @domodata leveraged JSON formatting to create BRC-20—a token standard enabling fungible tokens on Bitcoin. The first deployment was $ORDI at inscription #348,020.
Despite skepticism—critics called it inefficient and redundant—gamblers rushed in. Within two days, all 21,000 ORDI tokens were minted at ~$0.003 per token.
Initially traded OTC in WeChat groups, ORDI quietly appreciated to $0.05 by April—still under the radar.
Second Bull Wave: BRC-20 Takes Center Stage (May–Jun 2023)
Everything changed when Unisat Wallet launched indexing and trading support for BRC-20 in May.
Suddenly, liquidity flowed.
Then came a crisis: a double-spend bug drained user funds. Unisat responded decisively—full reimbursement. While costly, the move built immense trust and attracted mainstream attention.
Gamblers noticed: "There’s a casino on Bitcoin now."
On May 8, Gate.io listed ORDI at $29.58—a 10,000x gain from mint cost. OKX followed days later. BRC-20 mania was in full swing.
Network congestion soared—fees hit 500+ sat/vB. Every new BRC-20 token multiplied in value overnight.
Attention soon shifted back to NFTs:
- @BitcoinFrogs rose from 0.002 BTC to 0.12 BTC—a 60x increase.
- The project became the largest Bitcoin-native NFT collection by market cap.
- Its success revealed a key insight: large (10K+) collections foster stronger communities and are easier to hype than niche Sub-1K sets.
New protocols sprouted: ORC-20 added smart features; SRC-20 emerged via Stamp; ATOMICALS introduced "colored coin" models with 1-token-per-satoshi efficiency.
Even other chains copied the trend: DRC-20 on Doge, ETHS on Ethereum.
But excess followed—over-issuance led to fatigue. By July, activity cooled.
Quiet Progress Amid Downturn (Jun–Oct 2023)
With fees dropping to 1 sat/vB, innovation continued quietly:
- Sats inscription cap approached 21 million.
- Ordinal upgrades: Parent-child inscriptions (for NFT hierarchies), recursive inscriptions (composable assets), and cursed inscriptions (negative IDs) were resolved.
- Bitmap: A metaverse project using Bitcoin blocks as land plots.
- Merlin: Building BRC-420 and a Bitcoin L2 solution.
- ATOMICASL: Gaining traction with efficient transfers.
- Runes Protocol announced: Casey’s vision for a cleaner token standard.
Why Runes? The Flaws of BRC-20
Despite popularity, BRC-20 has major drawbacks:
- Generates excessive UTXOs and abandoned inscriptions ("digital trash").
- Each transfer requires multiple steps—higher fees and slower confirmations.
- Over 95% of Ordinal inscriptions are BRC-20 waste.
Casey aimed to fix this: a lightweight, efficient token protocol with Bitcoin-like simplicity.
Thus began development of Runes—a true native token standard designed for mass adoption.
Third Mini Bull Run: Anticipation Meets Reality (Nov 2023–Apr 2024)
The rally kicked off when Binance listed ORDI and SATS on November 6, 2023.
Market cap ballooned:
- ORDI hit $97 (30,000x from mint).
- SATS peaked at $94 (300x).
- $RATS surged to a $6 billion valuation (200x).
- ATOMICALS assets like $ATOM and $QUARK rallied.
- Even obscure protocols like SRC-20 saw gains.
NFTs rebounded too:
- Bitcoin Frogs: from 0.03 BTC → 0.43 BTC (14x).
NodeMonkes: launched via Dutch auction; floor rose from 0.03 BTC → 0.9 BTC (30x) by March 2024.
- A rare "Alien" NodeMonke sold for 17 BTC (~560 ETH)—the highest recorded NFT sale on Bitcoin.
Merlin’s L2 launched staking for BRC-20, NFTs, and more—ushering in BTCfi, an emerging yield layer for Bitcoin assets.
Meanwhile, pre-mining frenzy took off:
- RSIC pioneered a clever pre-launch mechanism.
- $DOG followed—both achieving **$4–5 billion valuations before Runes went live**.
But when Runes launched in April 2024?
It fizzled.
Why Runes Underperformed Expectations
- Overhype: Valuations priced in unrealistic growth.
- Limited Fair Launches: Only 3–4 of top 100 runes were fairly launched.
- Cumbersome Naming: Minimum 13 characters; reduces by one every four months.
- Casey’s Design Choices: The genesis rune (RUNE) has a 4-year mint schedule—killing short-term speculation appeal.
While technically superior, Runes clashed with market psychology.
Post-Hype Consolidation (May 2024–Present)
After the euphoria:
| Asset | Peak | Low | Drawdown |
|---|---|---|---|
| ORDI | $97 | $20 | ~79% |
| SATS | $94 | $11 | ~88% |
| NodeMonkes | 0.9 BTC | 0.09 BTC | ~90% |
| Bitcoin Frogs | 0.43 BTC | 0.028 BTC | ~93% |
Non-core protocols faded into obscurity.
Yet as broader crypto enters a new bull phase in late 2024—with even dormant altcoins surging—the Bitcoin ecosystem remains subdued.
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Why the Best Is Yet to Come
Despite setbacks, Bitcoin's ecosystem holds unmatched potential:
- Total ecosystem value: < $10 billion (<0.5% of BTC’s market cap).
- Compare to Ethereum: > $300 billion in ecosystem value (~66% of ETH’s cap).
This disparity highlights untapped upside.
Core Keywords
Bitcoin ecosystem, Ordinals protocol, BRC-20 tokens, Runes protocol, Bitcoin NFTs, BTCfi, sats domains, fair launch
Future Catalysts
- BTCfi expansion: Staking, lending, yield opportunities.
- L2 scaling: Projects like Merlin unlocking speed and utility.
- Runes DeFi integrations: If adoption grows, could revive interest.
- New use cases: Identity, social layers, decentralized storage.
The story isn’t over—it’s just entering its next chapter.
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Frequently Asked Questions
Q: What is the Ordinals protocol?
A: Ordinals allow data (like images or code) to be inscribed directly onto individual satoshis—the smallest unit of Bitcoin—enabling NFTs and tokens on Bitcoin without changing its base layer.
Q: How does BRC-20 differ from ERC-20?
A: BRC-20 uses JSON-based inscriptions on Bitcoin and relies on UTXO mechanics, making transfers more complex than Ethereum’s account-based ERC-20 standard. However, it operates natively on Bitcoin without smart contracts.
Q: What is the "First Is First" rule?
A: It means only the earliest inscription of identical content is considered valid—establishing scarcity and authenticity without centralized control.
Q: Why did Runes underperform after launch?
A: High expectations led to inflated pre-launch valuations. Additionally, restrictive naming rules and limited fair launches reduced user engagement compared to earlier speculative cycles.
Q: Can Bitcoin support DeFi like Ethereum?
A: Yes—through innovations like BTCfi, L2 solutions (e.g., Merlin), and token standards (Runes). While still early, these layers are building toward robust financial primitives on Bitcoin.
Q: Are Bitcoin NFTs just hype or do they have long-term value?
A: Early collections like Sub-1K inscriptions and culturally significant projects (e.g., NodeMonkes) show lasting demand as digital artifacts. As infrastructure matures, utility beyond speculation will grow.