Your guide to Bitcoin, Ethereum and Web 3.0

Bitcoin NFTs is the talk of the Web3 world right now, thanks to a new way to “coin” media and assets on the layer-1 blockchain through the Ordinals project. And, as with many previous NFT network launches, cloned versions of Ethereumis early and influential CryptoPunks dominating the early buzz around Ordinals.

Created by Larva Labs in 2017, CryptoPunks is a pioneering NFT project that set the template for the modern profile picture (PFP) trend. The 10,000 Ethereum assets were originally released via a free coin, long before there was a thriving NFT market, but have continued to generate nearly $2.5 billion in trading volume in the years since.

Ordinals only launched on the Bitcoin blockchain at the end of January, but there are already several CryptoPunks-inspired projects gaining momentum on the platform.

The most prominent so far is Ordinal Punksspanning 100-pixel avatars that have been “inscribed” onto Bitcoin through the Ordinals project and can be traded. However, unlike some Punks clones seen in the past, they are not direct clones of the original CryptoPunks collection. Instead, they appear to be based on a derivative Ethereum collection called Mutant Punks – in other words, a derivative of a derivative.

One Ordinal Punk sold for 9.5 BTC late Wednesday, or nearly $215,000. While it is about double the price of entry for a true CryptoPunk—about 64 ETH right now, or almost $106,000—the special Ordinal Punk is based on the very rare alien CryptoPunks, which have sold for as much as ETH worth almost 24 million dollars in the past.

In another example, pseudonymous NFT collector and investor dingaling tweeted that he bought a bundle of seven Ordinal Punks for 15.2 BTC on Wednesday – roughly $349,000 worth at the time.

But because Ordinals were just launched and they work differently than typical NFTs on other platforms (like Ethereum and Solana), there is not much infrastructure to support the buying and selling of the assets once they are described. In other words, there are no Bitcoin NFT marketplaces for Ordinals yet.

In fact, such trades currently take place over the counter (OTC) directly between users or through escrow services, with ask and bid prices tracked via online spreadsheets. It’s all being facilitated through Twitter and Discord as collectors vie for these Punk clones, as some expect these early Bitcoin “inscriptions” to prove more and more valuable over time.

“It is [a] real moment behind Ordinals and things are still very very early. There are opportunities everywhere,” dingaling tweeted. “Order books are currently updated on shared spreadsheets and sales only take place via OTC/escrow. But a lot is being built behind the scenes.”

However, the lack of infrastructure means that the current trading model is exposed to fraudand some Crypto Twitter users have sounded the alarm. A viral thread from the pseudonymous NFT collector TheNorwegian called out various perceived problems with the collection, asking if it is the “biggest NFT scam of all time”.

Another project is Bitcoin Punks, which puts copies of all 10,000 original CryptoPunks on Bitcoin via Ordinals. It’s billed as the first 10,000 piece NFT project to launch through Ordinals, and all of the assets have already been minted for free by collectors.

However, it’s not yet clear how much trading demand there is for the larger Bitcoin Punks collection at this point, and a moderator on the project’s official Discord server warned holders today to “be careful with trading” until a code audit can be completed.

Ordinal use has increased in recent days, with the data platform Dune showing over 17,000 coins on the platform already today—double yesterday’s total, continuing a trend that has exploded over the past week-plus. More than 39,000 assets are now entered as Ordinals, including other knockoffs and a playable clone of the classic video game Doom.

However, the project has proved controversial with some Bitcoin maximalists and enthusiasts, some of whom have argued that it is a waste of network space or that it goes against Bitcoin’s original focus on financial assets. Bitcoin transaction fees have increased in the past week and a half since Ordinals started gaining momentum.

CryptoPunks clones are common on NFT protocols that have emerged after Ethereum, and you can find them everywhere – on Solana, Polygon, Cardano, AlgorandEven Stacksa “layer 1.5” network built on top of Bitcoin.