## What Are Inscriptions? An In-Depth Analysis of Bitcoin Inscriptions Minting and Track Prospects

### Understanding Bitcoin Inscriptions and Minting Mechanisms from Zero

To grasp the concept of **Bitcoin inscriptions**, you need to understand two key points: Bitcoin's basic architecture and the role of the Ordinals protocol.

Bitcoin's total supply is fixed at 21 million, and each Bitcoin is interchangeable (homogeneous feature), similar to traditional accounting systems. But this also introduces a fundamental limitation—Bitcoin itself does not support smart contract functions and cannot directly issue tokens or NFTs like Ethereum.

To break this bottleneck, in December 2022, Bitcoin core developer Cassie Rudolph launched the Ordinals protocol. The cleverness of this protocol lies in: each Bitcoin is made up of 100 million "satoshis," and Ordinals assigns a unique number to each satoshi. When users write images, text, or code (limited to under 4MB) onto a specific satoshi, that satoshi gains a unique identity—**these written data are called inscriptions, and the process of writing is called inscription minting**.

In simple analogy: imagine a regular banknote and a signed banknote by a famous artist. Although they have the same face value, the latter's unique mark makes it worth much more. The principle of inscriptions is similar—by giving originally homogeneous Bitcoins unique attributes, it is essentially issuing NFTs on Bitcoin.

### The Three Main Drivers Behind the Explosion of Bitcoin Inscriptions

After reaching a high of $64,400 in November 2021, Bitcoin's price fell over 70% throughout 2022. Before the launch of the Ordinals protocol, Bitcoin's price had already declined significantly. But after the protocol's emergence, the situation changed dramatically.

**First Driver: Taproot Upgrade (November 2022)**

The Taproot upgrade brought large-scale scalability to Bitcoin, creating a technical foundation for developers to access the Bitcoin blockchain. Previously, many developers flocked to Ethereum because it supported smart contracts, enabling the development of tokens, DeFi, NFTs, and other complex applications. The Taproot upgrade broke this one-way flow, allowing Bitcoin to also support similar development possibilities.

**Second Driver: Ordinals Protocol (December 2022)**

The appearance of the Ordinals protocol turned the theoretical concept of non-homogeneous applications on Bitcoin into reality, laying the foundation for inscription technology.

**Third Driver: BRC-20 Protocol (March 2023)**

On March 8, 2023, Twitter user domodata launched the BRC-20 protocol based on Ordinals. If you compare Ordinals to a machine tool capable of processing parts, BRC-20 is like a complete production line that can directly provide packaged applications to users. Since then, Bitcoin inscriptions development has truly entered a rapid growth phase.

| Key Event | Date | Core Role |
|--------|------|--------|
| Taproot Upgrade | November 2022 | Attracts developers |
| Ordinals Protocol Launch | December 2022 | Implements inscriptions |
| BRC-20 Protocol Launch | March 2023 | Accelerates ecosystem development |

Compared to Ethereum's long history and mature technology in application development, Bitcoin has an unmatched advantage—**brand recognition**. In the blockchain space, a sense of recognition directly translates into value, and Bitcoin's market position far exceeds other cryptocurrencies. This "brand effect" injects continuous momentum into the development of inscription applications.

### The Current State of the Inscriptions Ecosystem: Exchange Support Changes the Game

In early 2023, Bitcoin inscriptions experienced their first wave of popularity. The turning point came in May when a major crypto exchange announced the listing of Bitcoin tokens, changing the market landscape.

**Why is exchange support so critical?**

Before entering exchanges, inscription creators and investors could only trade via decentralized exchanges (DEX), which involved high network fees and long processing times. The entry of mainstream exchanges significantly lowered trading costs and increased speed, making the inscription market truly liquid and operable.

**Market Size Data (as of December 29, 2023)**

According to cryptoslam, the NFT trading volume based on Bitcoin technology has reached **$1.84 billion**, ranking fourth among blockchains, behind Ethereum ($74.69 billion), Solana ($4.79 billion), and Ronin ($4.26 billion).

Since November 2023, Bitcoin inscription creation has seen explosive growth, with project numbers surging compared to early in the year. However, as participation increases, competition for block space intensifies, and transaction fees continue to rise—posing a challenge to market sustainability.

### How Can Retail Investors Participate in Inscription Minting?

If you want to try inscription minting, here are the specific steps:

**Step 1: Prepare a Wallet**

Creating a crypto wallet (such as a Web3 wallet) is a basic requirement.

**Step 2: Obtain BTC**

Purchase BTC within your wallet or transfer BTC into it. Currently, BTC is about **$87.46K**, with a 24-hour change of **-0.26%**.

**Step 3: Execute Minting**

In your wallet's Ordinals feature, select "Mint," and choose BRC-20, images, or text as needed. For BRC-20, you need to fill in a four-character token code, amount, and recipient address.

**Understanding the Difference Between NFTs and Tokens**

| Feature | NFT | Token |
|-----|-----|-------|
| Homogeneity | Non-homogeneous | Homogeneous |
| Divisibility | Indivisible | Divisible into smaller units |
| Main Use | Represent unique digital or physical assets | Practical tokens, stablecoins, etc. |

To mint assets that will be traded extensively on exchanges in the future, choose tokens. To create blockchain units representing unique assets, create NFTs.

### The Future and Investment Advice for the Inscriptions Track

**Objective Analysis of the Current Situation**

From the beginning of 2023 to now, Bitcoin inscriptions have entered a "hot period," and cheap token projects are increasingly rare. As data-heavy inscriptions like images and audio increase, unit transaction fees have risen sharply. How long the market enthusiasm can sustain under high costs remains uncertain.

Bitcoin is currently at a critical development stage, achieving a delicate balance among innovation, decentralization, and security. This balance allows Bitcoin to generate new technologies while maintaining its core position in the blockchain field.

**Investor Recommendations**

We advise investors to remain cautious and avoid large investments in inscription tokens or NFT products. For high-risk-tolerance investors wanting to try, they should:

- Invest limited funds rather than full bets
- Set stop-loss and take-profit points in advance
- Closely monitor changes in transaction costs

For short-term traders, other Bitcoin derivative trading methods can be considered, allowing trading on price fluctuations without actual asset ownership.

### Summary

**What is Bitcoin inscription?** Essentially, it is an emerging application built on the Ordinals protocol, enabling NFT issuance by assigning unique marks to Bitcoin. Driven by the Taproot upgrade, BRC-20 protocol launch, and support from mainstream exchanges, the inscription ecosystem is ushering in significant development opportunities.

However, retail participation requires full awareness of risks. Although the token and NFT markets are expanding, rising transaction fees and uncertain market sustainability are factors to watch. **Bitcoin inscriptions are at a critical juncture, and investors should remain calm, make cautious allocations, and judge prudently.**