Bitcoin NFTs: Yes, they exist!

Twitter has been roasting Mojang’s NFT ban on Minecraft. The announcement shocked the blockchain community: partly for the ban itself, but perhaps moreso for defining NFTs as ‘often purchased with cryptocurrencies like Bitcoin.’ Is it possible to buy NFTs with Bitcoin, or is Minecraft, one of the world’s most popular video games, mistaken in their understanding of NFTs?

What is an NFT?

An NFT (non-fungible token) is unique data on a blockchain that can be linked to digital and physical objects to provide proof of ownership. NFTs were conceptualized by Hal Finney in 1993 and have since grown to become a $40 billion market.

In 2016, the first Bitcoin NFT ‘Rare Pepe’ was mined, though the majority of NFT activity took off on Ethereum since Bitcoin itself doesn’t have the capability to run smart contracts necessary for NFTs. However, Minecraft may be more correct in citing Bitcoin as an NFT-purchasing currency than critics on Twitter imply.

NFTs Are Upgrading to Bitcoin

Recent studies show Bitcoin evolving as a top blockchain for NFTs. The blockchain is attractive to NFT creators for being the most secure, decentralized, and time-tested blockchain, offering lower gas fees, sustainable minting using recycled energy, and scalability.

Bitcoin NFTs do not exist directly on the Bitcoin blockchain like Ethereum ERC721 tokens. Rather, they are secured by Bitcoin via Stacks, the largest and fastest-growing Web3 project on Bitcoin. Stacks is a Bitcoin layer that uses a unique consensus mechanism called proof of transfer (PoX). PoX enables new blocks to be added using proof of work of an existing Bitcoin anchor block. Therefore, Bitcoin NFTs powered by Stacks offer the highest security without making any changes to the Bitcoin anchor block.

Bitcoin Ordinal NFTs

There’s been a lot of buzz in the NFT community around a new form of NFTs: Ordinals. Bitcoin Ordinal NFTs inscribe satoshis with data directly in a transaction on Bitcoin L1. Before, satoshis were treated only as monetary units, though now with a transcation it's possible to inscribe satoshis with data make them unique Bitcoin NFTs.

How is this possible? The Ordinals protocol uses a recent update from Bitcoin called Taproot that went live in November 2021. Taproot updated a few things in the Bitcoin protocol that affects how much data you can store within a transaction. Software engineer Casey Rodarmor found a loophole where to cstore nearly 4MB in a single Bitcoin block. By inscribing a serial number to each satoshi on the Bitcoin network in the order in which it is mined, the satoshi becomes a tracked and transferable NFT. Once the satoshi has been processed just as any other BTC transaction, it is then stored on the blockchain. They are therefore just as secure, decentralized and impossible to destroy as the Bitcoin blockchain itself.

Bitcoin Usernames (BNS)

Bitcoin usernames (BNS) are decentralized identities which are also a kind of Bitcoin NFT. BNS can unlock many web3 use cases. For example, rather than using a long wallet address like ‘2EOrpxRdkupgpY5KDENY2hHhybqyaTrVtK’ or scanning QR codes, soon users can send and receive Bitcoin with a simple username like ‘Satoshi.btc.’

Bitcoin usernames started trending ever since Jack Dorsey’s Web5 announcement, aspiring to create a new ecosystem around Bitcoin Usernames. While the term “web5” is new, the concept of decentralized identities pre-dates Bitcoin by decades and Bitcoin Usernames themselves have been in circulation for some time. Last quarter alone, over 97,000 usernames were registered through the Stacks Bitcoin layer.

An Ecosystem for Bitcoin NFTs

Since launching in January 2021, the Stacks ecosystem has been growing efforts to support Bitcoin NFTs. Decentralized marketplaces like Byzantion, Gamma, and HeyLayer offer a variety of services such as purchasing, selling and minting Bitcoin NFTs including music, collectibles, fine arts & photography.

Additionally, programs like the Mintery are helping creators launch successful Bitcoin-secured NFTs. Recently, the program hosted its inaugural NFT Worldwide event at Soho House in Amsterdam, onboarding artists and brands to the Bitcoin creator economy.

Today some of the most prominent Bitcoin NFT projects include Crashpunks, Megapont, and one-of-one art pieces by This is Number One in collaboration with Cara Delevigne and Chemical X.

It’s possible that many NFT projects will move to the Bitcoin blockchain. In February 2022, Satoshibles became the first NFT collection to bridge between Ethereum and Bitcoin via Stacks. While the bridge only allows projects to be active on one blockchain at a time, the technology provides multichain community aggregation, and the opportunity to leverage the benefits different chains have to offer (for example, Bitcoin’s security and Ethereum’s metaverse platforms).

A Bitcoin Wallet for Bitcoin NFTs

A crypto wallet is required for processing transactions and, therefore, necessary to connect, mint, buy, sell, or transfer NFTs on a marketplace. Xverse, the most advanced web3 Bitcoin wallet available for Android and iOS, offers an in-app browser so you can easily log in to Bitcoin NFT marketplaces and sign any desired transactions. You can also view your Bitcoin NFTs in your Xverse wallet on desktop with the browser extension.

How to setup Xverse Bitcoin wallet:

1. To get started, download Xverse wallet, available on iOS and Android, as well as a Chrome browser extension.
2. Carefully make a note of your seedphrase. You’ll need these to restore your wallet if it gets reset.
3. Go to the dApp browser and insert the URL of the desired dApp
4. In the top right corner, click ‘connect wallet

How to Buy Stacks (STX) for Bitcoin NFTs

If you’re new to Stacks, you will need to take a few steps to buy Stacks (STX) in order to purchase Bitcoin NFTs. Here’s a simple step-by-step guide on how to buy STX tokens using Xverse:

1. Open your Xverse wallet.
2. Click or tap the buy button on your home screen to purchase STX from Binance, MoonPay or Transak.
3. Enter the amount in STX that you wish to purchase and your Xverse wallet address.
4. Verify your email and basic information.
5. You’re now ready to buy STX with a credit card or your preferred payment method and have the purchased tokens deposited directly into your Xverse wallet.

That’s it! You’re ready to purchase or mint your first Bitcoin NFT.

How to Buy a Bitcoin NFT

Once your wallet is funded with STX and connected to an NFT marketplace, you can either mint a recently released collection on gamma.io, purchase NFTs off the secondary marketplace, or create your own NFT. You can even mint collections (priced at more than 50 STX) using Bitcoin lightning payments via LNSwap — all from within your Xverse browser.

Connect your Xverse wallet to your desired NFT marketplace. If you’re already connected to an account, make sure it’s the right one by reviewing the top heading of the mint transaction prompt.

1. Review the mint transaction prompt and click Confirm. If you’d like to adjust network fees, you can do so towards the bottom of this prompt.
2. Your NFT will be minted at the next block, which usually occurs between 5–15 minutes from the time of submission. You can learn more about block confirmation times here.

Xverse: A Home for Your Bitcoin NFTs

To view and send your NFTs, simply navigate to the collectibles tab in your Xverse wallet by tapping on the four-squared icon. To receive a gifted or airdropped NFT, navigate to the same tab and select the ‘receive’ button. You can use the generated QR code or copy and share your wallet address.

Additionally, you can view, sell and trade your purchased NFTs in a Bitcoin marketplace by connecting your wallet to the desired marketplace and selecting your profile icon.

The Future of Bitcoin NFTs

Is it possible to purchase NFTs with Bitcoin? Yes, though the technology is still developing in the Stacks ecosystem. This September, Stacks is launching Hyperchains, enabling Bitcoin NFT activities at Solana-like speeds and further initiatives continue for network bridging to move NFTs from other blockchains to Bitcoin. Additionally, Xverse is working on enabling users to be able to mint, transact, send and receive Bitcoin NFTs with native BTC. In this regard, perhaps Minecraft is ahead of its time.