What Are Bitcoin NFTs? Non-fungible tokens (NFTs) were first introduced on the Bitcoin blockchain ahead of operational smart contract functionality on the network. Indeed, before anyone knew what an “NFT” was, digital collectibles (mostly cards) were tokenized and shared over Counterparty, a protocol built on Bitcoin that records Bitcoin data. This initial effort kicked off in 2016 when the “Rare Pepes” digital collectible cards were first popularized on the Bitcoin blockchain. However, due to Bitcoin’s limitations and Ethereum’s growing popularity, the project migrated to Ethereum and other chains. Even though the concept of NFTs first found its way into the Bitcoin ecosystem, the legacy network has remained mostly disconnected from the flourishing NFT projects, platforms and marketplaces. The reason? It is nearly impossible to deploy smart contracts on Bitcoin’s core protocol. Bitcoin evolved with the Taproot upgrade that added new features and functionalities to the network. However, it still didn’t allow developers to deploy complex smart contracts on the main Bitcoin chain. Stacks claims to solve this by offering fully expressive smart contracts functionality while settling all transactions to the Bitcoin block. Just as developers can use Stacks’ infrastructure to enable Bitcoin-based decentralized finance (DeFi) protocols or decentralized applications (Dapps) without wrapping BTC to use on other chains like Ethereum, the platform’s smart contract functionality can also be used to mint NFTs backed by Bitcoin blockchain’s security and liquidity. Since most of the work happens on the Stacks chain, NFT transactions become faster, cheaper and energy-efficient without compromising the security of final settlement on the Bitcoin network. Based on this, we can say that Bitcoin NFTs are NFTs that are minted on Bitcoin-powered chains. Some Bitcoin NFT platforms are Gamma, Byzantion, and HeyLayer, and Light Night. Author Bio Muneeb Ali is the CEO of Trust Machines, a startup that recently raised $150M to build the largest ecosystem of Bitcoin applications. He is the co-founder of Stacks, a decentralized programming layer for Bitcoin. Muneeb received his Ph.D. in Computer Science from Princeton University. His Ph.D. thesis was nominated for the ACM SIGCOMM dissertation award by Princeton University. Muneeb gives guest lectures on Bitcoin & crypto at Princeton and his research publications have over 1,500 citations. He is one of the main characters in George Gilder’s book Life After Google and was a technical advisor to the HBO show Silicon Valley.
February 27, 2023