BRC-721E: Bringing Ethereum NFTs to Bitcoin Blockchain in '24
Cem DilmeganiBitcoin ordinals/ordinal inscriptions brought NFTs to the Bitcoin network in early 2023. Prior to that, users could only store digital artifacts on other blockchains, like Ethereum, Stacks and more. But the Ordinals protocol now enables users to create Bitcoin ordinals and store it on the Bitcoin blockchain.
This development has made the Bitcoin network the second1 blockchain for most NFT sales, behind Ethereum (Figure 1). This fact becomes more impressive when we consider that Ordinals protocol has only been around for 6 months, yet it’s already challenging Ethereum’s supremacy in the NFT space.
Now, the gap between Bitcoin and Ethereum can be narrowed down even further, thanks to the BRC-721E standard released this week. This new token standard creates a “bridge” that lets users transfer their Ethereum NFTs to Bitcoin.
In this article, we will explain the BRC-721E protocol in more detail and discuss its impact on the Ordinals market and the wider Bitcoin network in general.
What is BRC-721E?
The BRC-721E token standard was jointly introduced by Ordinals Market and Bitcoin Miladys NFT Collection. Its purpose is to turn an ERC-721 Ethereum NFT into a BRC-721E Bitcoin NFT.
According to its creators2 :
- The migration from Ethereum NFT to Bitcoin Ordinals will be immutable and verifiable
- Your NFTs will burn via an ETH call function, transfer to Bitcoin, and automatically appear on the Ordinals marketplace (Figure 2)
- There’s no possibility of double-counting across the two blockchains thanks to verification of the burn transaction call data
- Your Ethereum NFT content, such as a raw image data, can be as small as 100 bytes but yet be turned into a custom Ordinal
Perhaps the biggest caveat with BRC-721E is that the complete metadata going from Ethereum to Bitcoin will not be stored on chain, but off of it, like on the custom Ordinals Market collection page. Nevertheless, the protocol allows a lower quality preview image of the NFT to be present on chain, wallets, and marketplaces.
Lastly, note that the “bridge” is only one-way. So once you turn your Ethereum NFT into a satoshi in Bitcoin, you can’t undo it.
How will BRC-721E affect Bitcoin Ordinals?
The effect of the BRC-721E token standard on Bitcoin Ordinals will be to increase their popularity and adoption rate, in addition to getting more people involved with Bitcoin. That is best illustrated by the numbers gathered by Dune Analytics: the total number of unique inscriptions has quickly jumped to 10M3 (Figure 3), and we can partially attribute that to the conversion process that’s bringing inscriptions from Ethereum to Bitcoin.
How will BRC-721E affect the Bitcoin network?
We cannot expect the BRC-721E token standard to impact the Bitcoin network and the amount stored on it, more than the Ordinals protocol already has. Since their introduction, Bitcoin NFTs have increased:
- Network congestion4
- Transaction fees (Figure 4)
- Transaction confirmation times (Figure 5)
- Bitcoin block space (Figure 6)
So once each transferred NFT from Ethereum makes its way to Bitcoin, it will exacerbate these impacts.
However, ordinals also have numerous benefits, which arguably outweigh their downsides. So more inscriptions will be, in the long run, beneficial to Bitcoin.
We shouldn’t overlook the fact that although the total number of inscriptions has reached 10M, the daily amount has been decreasing since early May, hinting at a possible stabilization of the hype. And recently, Casey Rodarmour, the creator of the protocol himself stepped down5 from leading the team.
This new development from Ordinals Marketplace and Bitcoin Miladys has the potential to put Ordinals back at the forefront.
For more on Ordinal Inscriptions
To learn more about Ordinal Inscriptions, read:
- What are NFT Royalties & How Bitcoin Ordinals Can Help
- Ordinal Inscriptions History: How Bitcoin NFTs Came to Be
External Links
- 1. “NFT by Sales Volume.” Crypto Slam!. Retrieved on June 6, 2023.
- 2. “Bridge any NFT to Ordinals” Ordinals Market. Retrieved on June 6, 2023.
- 3. “Bitcoin Ordinals Inscriptions Analysis.” Dune. Retrieved on June 6, 2023.
- 4. “Bitcoin NFTs Level Up: Introducing BRC-721E Token Standard for Ethereum Migration.” NFT Evening. June 1, 2023. Retrieved on June 6, 2023.
- 5. “Casey Rodarmour’s Twitter.” Twitter. May 28, 2023. Retrieved on June 9, 2023.
Cem is the principal analyst at AIMultiple since 2017. AIMultiple informs hundreds of thousands of businesses (as per Similarweb) including 60% of Fortune 500 every month.
Cem's work has been cited by leading global publications including Business Insider, Forbes, Washington Post, global firms like Deloitte, HPE, NGOs like World Economic Forum and supranational organizations like European Commission. You can see more reputable companies and media that referenced AIMultiple.
Throughout his career, Cem served as a tech consultant, tech buyer and tech entrepreneur. He advised enterprises on their technology decisions at McKinsey & Company and Altman Solon for more than a decade. He also published a McKinsey report on digitalization.
He led technology strategy and procurement of a telco while reporting to the CEO. He has also led commercial growth of deep tech company Hypatos that reached a 7 digit annual recurring revenue and a 9 digit valuation from 0 within 2 years. Cem's work in Hypatos was covered by leading technology publications like TechCrunch and Business Insider.
Cem regularly speaks at international technology conferences. He graduated from Bogazici University as a computer engineer and holds an MBA from Columbia Business School.
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Why Microsoft, IBM, and Google Are Ramping up Efforts on AI Ethics, Business Insider.
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Hypatos gets $11.8M for a deep learning approach to document processing, TechCrunch.
We got an exclusive look at the pitch deck AI startup Hypatos used to raise $11 million, Business Insider.
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