While Ethereum’s ERC-721 standard has been the go-to for NFTs, the desire to expand to other blockchains, such as Bitcoin, has been a topic of interest. And Ordinals protocol was born out of that desire. What that gave users is the option to mint NFTs on the Bitcoin blockchain in the form of inscriptions.
Now, there is a new token standard in the market called BRC-721E which allows us to bring Ethereum NFTs to the Bitcoin blockchain. Yes, you can migrate your cartoon pictures to a different blockchain now.
What Are Bitcoin Ordinals?
Ordinals is the protocol through which NFTs exist on the Bitcoin blockchain. Unlike Ethereum NFTs, which are minted on the Ethereum blockchain, Ordinals aka Bitcoin NFTs are inscribed on the Bitcoin blockchain.
The Inscription process is responsible for writing or inscribing the data of the content into the witness of a Bitcoin transaction. This witness feature was introduced as part of the Segregated Witness (SegWit) upgrade to the Bitcoin network in 2017.
This protocol enabled the decentralized storage of digital art on the Bitcoin blockchain.
The basic idea behind Ordinals is that it allows content like videos and images to be assigned to individual satoshis—the smallest unit that Bitcoin can be divided into—where they permanently exist on Bitcoin’s network as Inscriptions.
What is BRC-721?
BRC-721 is a simple protocol that allows ERC-721 NFTs to migrate to Bitcoin on their own schedule, without the need to inscribe an entire collection beforehand.
It introduces BRC-721E, which encodes data directly into the burn transaction (TX) that nominates a Bitcoin address to receive an inscription. This innovative approach enables users to migrate their NFTs seamlessly and claim airdrops using BRC-721.
How Does BRC-721E Work?
Remember when Bored Ape #1626 was burned? Ok, you don’t. Let me explain.
NFTs can be permanently removed from circulation through a process called burning, which involves sending an asset to a location where it cannot be retrieved.
So, Jason Williams, the owner of BAYC #1626 burned his NFT worth 108 $ETH and moved to the Bitcoin blockchain.
It now exists on the Bitcoin Blockchain because the location to which BAYC #1626 was burned is linked to an Inscription made through Ordinals.
Anyways, how did he do it? The burn took place using a newly developed feature for Ordinals named Teleburn.
So, instead of sending his NFT to a burn address, Williams utilized a burn address associated with a new Ordinal inscription on the Bitcoin blockchain. And that made the NFT disappear on the Ethereum blockchain and made it appear on the Bitcoin blockchain.
BRC-721 sets itself apart from existing solutions like Teleburn by enabling the burn to take place before inscribing. Unlike Teleburn, which requires the knowledge of the inscription ID in advance, BRC-721E leverages the burn TX as an on-chain inscription request. This method provides users with greater flexibility and simplifies the migration process for ERC-721 NFTs to Bitcoin.
Here is what happens behind the scenes when you migrate an NFT:
The migration process involves burning the ERC-721 NFT with an ETH call function, initiating an irreversible process that acts as an on-chain inscription method.
To claim the ETH burn on Bitcoin, users must inscribe valid BRC-721E data. Once completed, the bridged NFT appears on a custom Ordinals market collection page with complete metadata. Indexers play a crucial role in checking the burned NFT data inscriptions, ensuring that each token has only one valid inscription and verifying that the genesis address matches the burn transaction call data.
The Ownership Dilemma
Now, the big question when transferring assets from one blockchain to another is…. Is it really the same asset once transferred?
Coming back to the point of William’s ape transfer to Bitcoin…
The founder of the Bored Apes, Greg Solano, doesn’t agree that the Ape is really transferred:
It’s not “gone from ETH forever.” It’s basically the same as any other transfer: If you transfer your ape to an address you no longer control (even if it’s the ‘burn’ address), you have effectively given up your license.
The big question is will it still be worth 108 ETH or whatever the current market value of Bored Apes is, as it exists now on Bitcoin? Maybe. Maybe not!
Can this NFT have all the token-gated access that other Bored Ape NFTs that exist on the Ethereum blockchain have? No.
The launch of the BRC-721E standard, in collaboration with the Ordinals market and the Bitcoin Miladys NFT collection, expands the possibilities for migrating Ethereum ERC-721-based NFTs to Bitcoin. But how useful is this feature? Is there actually a need to do this? I don’t know..