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Will Ordinals play a role in reviving interest in Web3?



Last weekend I went to the launch of a new space in San Francisco, CypherPunk Lab. It’s an Ordinals digital art gallery/coworking space/event space on Union Street. For those of you not familiar with Union Street, it used to be a high-end boutique destination in San Francisco which, in its heyday, newly minted millionaires would cruise in their Ferraris and Lamborghinis on the weekend. For the price of a cup of coffee my friends and I would sit on the corner and enjoy the non-stop show of peacocking that passed us by on the street and sidewalk. That was in the Web 1.0 and 2.0 days. Today let’s just say Union Street is not the same. It’s still a decent place to go for food, drink or shopping, but not a top hot spot as is the case in many areas of my beloved San Francisco. 


Ordinals is the cool new kid on the block for NFTs, a means of creating what constitutes Bitcoin “NFTs,” by attaching data such as images, music, videos, and more to an individual Satoshi on the base Bitcoin blockchain. Launched on the Bitcoin mainnet by developer Casey Rodarmor January 20, 2023, ordinals are simply the latest way to create NFTs on Bitcoin. They are extremely controversial within the Bitcoin community due to driving up transaction fees as well as data on blocks on the mainchain of Bitcoin.  However, not everyone is unhappy about ordinals. Bitcoin miners are getting a windfall from the high transaction fees. Note that Bitcoin miners get paid by validating transactions that pay a fee when mining new Bitcoin. 


I had some hopes that this event would at least be fun. After all, I was venturing out on a rainy San Francisco Friday night when I could be home on the couch warm eating popcorn and binge watching Netflix. I’ve been tracking Ordinals since before its official launch when Casey Rodemor talked about it as “this little art project” he was working on. My keen interest is personal and somewhat painful, originating in 2012. I launched a digital comic book and character trading platform that had many of the same fundamentals as Ordinals, including collectability and scarcity. Plus it included a business model where the artist got paid every time the artwork changed hands. In retrospect, failure to leverage the Bitcoin blockchain turned out to be my biggest mistake.


Back to the event: To my pleasant surprise it was packed with people from all over the world, and there was even some peacocking going on, replete with expensive fashion mixed in with the typical traditional tired hacker hoodie and jeans look. (Yes, it's long past time for the community to up their fashion game!) 


I met artists from Italy, both music and visual artists, who are excited to mint their work and get paid on ordinals. The independent music artist told me it gives her independence. Her inscription on ordinals was on a Satoshi that was created 10 years ago the day she started her independent music career.  A comic book artist from New York who toiled anonymously at Marvel Studios for years was excited he now can sign his name to his Mickey Mouse art on ordinals. (Note in 2024, Mickey Mouse is now in the public domain.)  I talked to a game developer who is looking to mint his game goods on ordinals, and finally a wine maker who is moving off the Polka Dot chain in order to mint limited edition art. Coupled with his wine, he hopes to build a luxury brand. 


I even ran into a fellow tech veteran and true Metaverse pioneer who used to run virtual reality meetups in San Francisco where attendees numbered in the hundreds from all over the world. Back then we really thought virtual reality was going to take over the world with companies such as Magic Leap raising $4.1B off of a really good demo. No longer in tech, he has enough bitcoin to never have to work again, but is interested in ordinals as a vehicle for funding the musicals he is composing. 


So what does all this have  to do with Web3? According to WikiPedia, Web3 (also known as Web 3.0) is an idea for a new iteration of the World Wide Web which incorporates concepts such as decentralization, blockchain technologies, and token-based economics. Orindals in a broader sense fits loosely with the spirit of Web3 in its decentralization, and a kind of token on top of Bitcoin that is uncensorable to boot.


Ordinals could be the start of something bigger when combined with other Layer 2 Bitcoin protocols and projects such as Lighting on the order of magnitude of hundreds of billions of transactions over the next 5-10 years. We just don’t know as of yet, but it’s fun to watch and participate in the scene that attracts creatives as well as developers.  What’s more, there’s interest and money hovering around ordinals and Web3. One of the key connections I made was a VC’s scout from Asia who represents a conglomerate of VCs looking to invest in a Web3 collab in the San Francisco Bay Area. 


There’s still a long way to go from “CypherPunks" to more mainstream artists, and consumers embracing Web3. However, I do think the groundwork is being laid and better yet, San Francisco has a chance to be the center of the movement. With ordinals it could be something cooler than dry soulless sociopathic AI, more like the beat poets and comedians who emerged from North Beach in the 1950's. 


Regardless, whether ordinals are around for the long term, I wholeheartedly believe we’re on the cusp of something exciting relative to priming Layer2 for the big time. I’ve been around for 3 major cycles: Web 1.0, Web 2.0, and Mobile. Could Web3 be the next boom? AI has exploded but alas, we have to wait for the next AI chips to arrive for the next leap in capability in my opinion. That will take a few years, in the meantime Web3 built on top of Bitcoin is ready to fill the void. 


All the best,


Jim



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