​‘Bitcoin NFTs’ Aren’t New, But Blockchain Purists Are Now on | CoinQuest

​‘Bitcoin NFTs’ Aren’t New, But Blockchain Purists Are Now on the Defensive

For nearly a decade, creators have enlisted sidechain or layer-2 solutions to link digital art to the Bitcoin blockchain. But how this is accomplished—or whether it should even be done—has Crypto Twitter up in arms after new project Ordinals developed a way to add digital items to on-chain Bitcoin transactions.

NFT are blockchain tokens that can serve as a proof of ownership for assets, including digital goods like artwork, videos, music files, and memberships. While blockchains like Ethereum and Solana are synonymous with NFTs and digital collectibles, many Bitcoin developers have sought ways to bring them to the quintessential blockchain.

One issue hampering the development of NFTs on Bitcoin is the need for smart contracts. In the minting process, NFTs use smart contracts to assign ownership of the digital asset in the NFT. The smart contract updates the ownership when the NFT is bought or sold.

Bitcoin has only limited smart contract support.

To address this, earlier projects like Counterparty and Stacks developed alternative solutions that use a native token for the contract piece but ultimately settle their transactions back on the Bitcoin blockchain.