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Bitcoin ordinals seem to be a new buzz coming to the Bitcoin blockchain. Let’s discuss why, what is that and understand how they can affect the development of the Bitcoin ecosystem. Moreover, it’s worth investigating how Ordinals on Bitcoin differ from NFT on Ethereum and Solana, for example.
What are Bitcoin Ordinals and how do they work?
Bitcoin ordinals were brought to the public by Casey Rodarmor, when he formulated his Ordinal theory back in January 2023. The main idea behind it is the following.
The smallest fraction of Bitcoin is satoshi, which is equal to 0.00000001 Bitcoin. All satoshi that make up Bitcoin are mined sequentially. That’s why they can be given numbers according to the order they are mined. This number is called an inscription. What Casey came up with is that these inscriptions can not only be numbers, they can be images, short videos, or GIFs. Through such a system of providing satoshi with inscribed graphic data, ordinals can obtain similar NFT functionality. Any number assigned for satoshi in the range between 0 and 2.1 trillion could be adapted for NFT realization.
As an example, let’s have a look at a dollar-quarter coin. One side of it always depicts George Washington. At the same time, the other side may feature various images, based on the year of the coin minting. That’s why we may speak about the same means of payment but with different inscriptions on one of its sides.
Thus, the Bitcoin blockchain which was designed only for financial operations, can grow and resemble a complicated structure obtaining extra functionality enabling the storage and transmission of non-fungible digital assets.
Ordinal NFTs VS Ethereum NFTs
The main difference between NFTs on Ethereum and Ordinals on Bitcoin is the way the data inscribed is stored. NFT on Eetherfum is created and stored on the blockchain with the help of the token standard ERC-721. This helps to find out and recognize an NFT across the Ethereum ecosystem. Together with the NFT, a metadata file is also created. This file has all the information about the NFT. The visual part of NFT only acts as a stamp, connected to the metadata file and identifying it. While a metadata file is embedded into the Ethereum blockchain, the image itself can be stored anywhere offline and that’s why it can be edited.
At the same time, Bitcoin Ordinals NFTs are attached to the piece of currency within the Bitcoin blockchain and this is the key difference from Ethereum NFTs.
Ordinal NFTs don’t need a special metadata file to describe what is that, concerning the artwork type and its value. The artwork itself is inscribed into the blockchain. It means that Bitcoin ordinals can not only store NFTs and help to track them over the blockchain ecosystem but also bring an extra level of security and immutability to Bitcoin NFTs. Such a high level of NFT protection is technically impossible on other blockchains.
Summing Up
With the growth of the Bitcoin blockchain ecosystem, more and more possibilities are opening for users. One of them is to prove the uniqueness and ownership of digital assets through the Ordinals.
Spatium is a crypto wallet that is building DeFi on Bitcoin and is actively investigating new possibilities for improving the Bitcoin blockchain ecosystem including the use of Ordinals to store and exchange NFTs on Bitcoin.
Visit our website for more information about new opportunities to send feeless crypto transactions, perform P2P swaps without the need to store the crypto of the blockchain you are sending to. Stay tuned and follow us on social networks.
Stay protected in web3 with Spatium Feeless Bitcoin Wallet. It’s easy to operate and securely to use. Spatium Feeless Bitcoin wallet is free to download. It’s available on Android and iOS devices. Visit our website to learn more about the wallet. Get it on your phone, test it, and enjoy your financial freedom!
Try Spatium Feeless Bitcoin Wallet and the feature allowing you to pay a network fee in the currency you send instead of native chain tokens (currently available for USDC on Ethereum. More chains and tokens will be added soon).
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Keep a close eye on Spatium Feeless Bitcoin wallet which is building DeFi on Bitcoin and actively working toward the introduction of feeless crypto transactions and cheapest ever peer-to-peer crypto swaps without escrow.
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When talking about Bitcoin and other cryptocurrencies, there is one good question you may ask: how to get crypto? There are several ways to get cryptocurrencies.
One way is to register at a centralized exchange and buy crypto with fiat. Another way is to perform a crypto swap when both users exchange crypto directly. There is not much noise about swaps and the concept is still quite unfamiliar to the majority of web3 users. That’s why we would like to explore swapping in detail and share our findings.
What is a crypto swap?
Crypto swap is an option for web3 users to exchange their crypto with each other without paying extra commissions. Just to give an example, if you want to change BTC into ETH, then you have to go to the centralized or decentralized exchanges and perform multiple operations there. The crypto exchange logic is not straightforward. Firstly, the exchange will change BTC into fiat and take the commission for it. Secondly, it will change fiat into ETH and also take the commission, then it will send it to your account. In such a situation, a crypto swap doesn’t require fiat money as an intermediary, leading to fewer transaction fees applied.
Why consider crypto swapping?
Crypto swap is good while dealing with freshly minted crypto. For example, a new blockchain ecosystem has emerged and its token acts as an entry ticket to various services. Crypto swapping helps to make financially sound decisions and explore the opportunities provided by the new blockchain ecosystem. It’s an ideal option for web3 users who would like to support various projects.
There are thousands of coins and tokens in web3 and more keep emerging constantly as the market expands. Each of them presents a potential investment fortune. Sometimes the crypto is so new that it’s not listed yet at the crypto exchange. Using crypto swap instead of crypto exchange makes a huge difference in such a situation.
Let’s discuss one of the most common use cases for crypto swaps. You purchased crypto you believe will be profitable in the future. After a while, you realize that some other project seems to be more promising. You would like to sell the coins you have and buy new ones.
A conventional method of conversion is to go to the exchange and convert your coins into fiat and then fiat into other coins. Unfortunately, the extra steps you have to take, result in multiple transaction fees.
That’s why one of the most important functions of crypto swapping is to remove additional issues, reduce transaction fees, minimize commissions, and overall provide a more seamless process of getting the coins you require in no time.
How does crypto swap work?
Unlike trading at crypto exchanges, crypto swaps usually take place at crypto swap platforms: Changely, Swapy, Airswap, Shapeshift, etc. They perform the exchange of cryptocurrency assets for another coin or token of the same value. It’s a more convenient procedure for individuals if compared with going to exchanges.
The timing of end-to-end crypto swap differs from platform to platform. Usually, the process takes only a couple of steps and takes a few seconds. You have to choose the cryptocurrency you would like to swap, specify the amount, and proceed to confirmation.
Other than crypto swap platforms, swapping can be featured at crypto payment platforms and even crypto wallet apps.
Pluses and minuses of crypto swaps
Of course, as with any other type of activity on the blockchain, crypto swaps have their benefits and limitations.
Pluses of crypto swaps
- cryptocurrency swapping helps to bring more variety to the crypto you hold already;
- minimizes risks while bringing broader investment opportunities;
- increase crypto market efficiency;
- improve the interoperability among different blockchains;
- opens opportunities for big profits;
- improves market accessibility because crypto swaps eliminate intermediaries.
Minuses of crypto swaps
- crypto swaps are public that’s why there may be privacy concerns;
- blockchain technical bugs can cause crypto pair loss while swapping;
- swapped crypto of unknown origin could cause difficulties with later trade;
- high volatility of the market could bring losses from the swap.
Spatium Feeless Bitcoin Wallet recently released its MPC P2P Swaps (crypto-crypto) without escrow. Spatium P2P Swaps is currently in closed beta but already proved to be the cheapest swaps at the market.
Get the Spatium Wallet App and enjoy how user-friendly and convenient it is. Protect your crypto assets with MPC cryptography and save on fees while sending transactions to blockchains. Moreover, soon Spatium will enable peer-to-peer crypto swaps when you don’t need to go to centralized exchanges to swap cryptocurrencies. Stay tuned!
Spatium Bitcoin MPC wallet is easy to use and free to download. It’s available on Android and iOS devices.
Try Spatium Feeless Bitcoin Wallet and the feature allowing you to pay a network fee in the currency you send instead of native chain tokens (currently available for USDC on Ethereum. More chains and tokens will be added soon).
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Keep a close eye on Spatium Feeless Bitcoin wallet which is building DeFi on Bitcoin and actively working toward the introduction of feeless crypto transactions and cheapest ever peer-to-peer crypto swaps without escrow.
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What is the Ethereum Blockchain?
Ethereum blockchain was introduced to the public in 2014 by Vitalik Buterin. The platform itself was launched in 2015. Ethereum is the first blockchain that went beyond being just a virtual payment means. That’s why it has grown now into a vast ecosystem hosting multiple blockchains and making ETH the second-largest cryptocurrency after Bitcoin.
Ethereum supports smart contracts by default, which makes it possible to launch various decentralized applications (dApps).
What are the Gas Fees on Ethereum?
Similar to the Bitcoin fees, Ethereum fees (gas) are paid for a transaction to be written in the Ethereum blockchain. Fees are paid in gwei, the smallest fraction of ETH, the Ethereum blockchain cryptocurrency. One gwei is 10-9 ETH. The gas fee is calculated based on the network congestion, supply, and demand.
Based on the complexity of the transaction and the amount of work required to be done by the validator gas limit also increases. Gas price is paid for the amount of work performed by validators. That’s why the transaction cost is calculated when the gas limit is multiplied by the gas price. Transaction fees may also include tips from users who would like to have higher priority in the transaction waiting queue.
Also, gas fees protect the Ethereum blockchain from being overloaded with unnecessary spamming transactions.
How Gas Fees are Calculated?
The gas fee or transaction fee is the ‘gas limit’ multiplied by ‘gas price by unit’. As an example, let’s imagine that the gas limit is 10,000 and the price for a unit is 100 gwei, a tiny denomination of ether (ETH). Using the provided formula, the gas fee will be 10,000*100 = 1,000,000 gwei or 0.001 ETH. To find out the average transaction fee, please, visit ycharts. As for May 2024, the average transaction fee fluctuates between $1 to $1.3. At the same time, with the network congestion increasing, the transaction fee will rise.
Why do Ethereum Gas Fees Fluctuate?
If you speak with someone who interacts with Ethereum blockchain the first thing they will say is to be smart about the timing when to send a transaction. Ethereum gas fees change based on the day of the week and the time of the day. The cheapest transactions are available on weekends and early mornings during the weekdays. Also, there are various gas fee calculators and gas fee trackers that you may use to calculate gas fees before sending transactions. Some wallets, like MetaMask, even have an inbuilt gas fee calculator. Other crypto wallets allow the gas fee to be set manually.
Sometimes, gas fees can grow out of proportion when the Ethereum network demand for transactions is higher than the bandwidth capacity of the blockchain. Usually, gas price spikes are connected with the launch of new projects on Ethereum, such as the ICO boom in 2017, the DeFi boom in 2020, or the CryptoKitties NFT project launch.
To get access to the Ethereum blockchain everyone requires a crypto wallet. One of the most secure and easy-to-operate crypto wallets is the Spatium Feeless Wallet. Our wallet is powered by MPC and works with all popular chains including Bitcoin, Ethereum, Solana, Polygon, Litecoin, etc.
It’s secure and easy to operate. Spatium wallet is a perfect match for new users who would like to join web3 and reap its benefits as soon as possible. Also, crypto-savvies will definitely find it convenient and cost-efficient due to our Feeless feature allowing users to pay network fees in the crypto they send, not in the native crypto of the blockchain (currently available for USDC on Ethereum. More chains and tokens will be added soon).
Spatium Feeless MPC wallet is free to download. It’s available on Android and iOS devices
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Every time you make a transaction on any blockchain including Bitcoin you have to pay a set amount of cryptocurrency for the transaction to go through. In Bitcoin it’s a small amount of Bitcoin cryptocurrency. Such parameters like the size of the transaction or network congestion affect the fee amount. Let’s explore what exactly you pay for when you interact with the Bitcoin blockchain?
What is the Bitcoin Transaction Fee?
The origin of fees on Bitcoin stems from protecting the network from overloading, when many users want to send transactions simultaneously. Right now, the Bitcoin fee is mostly used to pay validators or miners for their work, adding transactions to the block.
The fee amount can vary and many crypto wallets add a function of Bitcoin fee customization in the transaction settings.
Why can the Bitcoin Fee Amount Change?
As we have already stated, any Bitcoin transaction includes a small fee, which is transferred to Bitcoin blockchain validators. If you want validators or miners to add your transaction to the nearest block, which means less waiting time, then you attach higher fees to the transaction. If you are not in a hurry, and can wait longer for the transaction to be written into the block and be added to the Bitcoin blockchain, then you can provide a lower fee and save money. Anyway, try not to go below the average sum when you set up the amount for a transaction fee. If the fee is too low, then the transaction might get stuck in the system for hours if not days.
Even if such a scenario happens, don’t worry. Eventually, a transaction with very small fees after a long waiting time, can be either approved or canceled. If the transaction is canceled it means that the sum you want to send will get back to your crypto wallet account.
Also, there is an opportunity to check the status of your Bitcoin transaction. This is possible if you know your transaction ID. Provide your transaction ID here.
How Bitcoin fees are calculated?
Bitcoin fees are measured in satoshis/bytes. A satoshi is the smallest unit of a Bitcoin. One satoshi is 0.00000001 BTC (Bitcoin). The size of the transaction is measured in bytes. The more complicated a transaction is, the more bytes it involves, that’s why it will be more expensive. On average, the standard transaction size is around 230 bytes, which means that the fee for such a transaction will fluctuate from 1,400-2,700 satoshi.
As an example, in August 2022, the average Bitcoin transaction fee was around $1 which is 0.000044 BTC, now, in March 2024, it is around $8 dollars, which is 0.00011 BTC. In April, 2021, the transaction peak rose over $60 per transaction.
Conclusion
Every action on Bitcoin blockchain requires fees. They are charged based on the size of the transaction and how quickly you would like it to be added to the Bitcoin blockchain. Also, there are various service fees, if you interact with Bitcoin cryptocurrency through cryptocurrency exchanges or any other service providers. Each of these services charge you extra fees for handling your transaction.
The Spatium crypto wallet team is building a fee-saving ecosystem around Bitcoin, which is called to minimize the transaction fees and maximize your profit.
Spatium Feeless Bitcoin crypto wallet is a self-custodial wallet powered by MPC technology. It’s secure and easy to operate. Spatium wallet is a perfect match for new users who would like to join web3 and reap its benefits as soon as possible. Also, crypto-savvies will definitely find it convenient and cost-efficient due to our Feeless feature allowing users to pay network fees in the crypto they send, not in the native crypto of the blockchain (currently available for USDC on Ethereum. More chains and tokens will be added soon).
Spatium Bitcoin MPC wallet is free to download. It’s available on Android and iOS devices.
Subscribe to our social network accounts and stay on the curve of all the buzz around Spatium!
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Semi-custodial wallets which make up the subcategory of self-custodial ones, are ideal for web3 newcomers. They manage to combine the security of non-custodial wallets with the user-friendliness of custodial ones. If you would like to start your journeys in web3 and make sure that your funds are securely stored, you should look in the direction of semi-custodial wallets.
Please, check out our previous post to find out what’s the difference between custodial, non-custodial, and semi-custodial crypto wallets.
What are the benefits of self-custodial wallets?
1. Security
Self-custodial crypto wallet providers store on their side only one of the two secrets that are used to activate the private key to operate the wallet. It means that a self-custodial wallet has an extra protection layer because there is a third party to guard the access to the digital assets. Nevertheless, the service alone cannot access the funds or set any limitations on transactions. Any activity has to be confirmed with the help of the shard (secret) stored on the user's device.
2. Convenience
Self-custodial crypto wallets offer a short learning curve to let users easily operate them. They are suitable for different kinds of users. MPC takes off various complexities concerning the wallet operation and makes wallets very convenient.
3. User-friendly interface
Users can easily test how self-custodial wallets operate. Try Spatium crypto wallet for free and witness how intuit and easy to navigate the app’s interface is.
4. Biometric backup
Some self-custodial crypto wallets, like Zengo, use biometric backup to restore access to the wallet. Also, the biometric backup could be applied to install the wallet account on the user's other devices.
5. Cloud backup
Instead of biometric backup, or sometimes, in addition to it, cloud backup is performed. Cloud backup helps to restore access to the wallet account if the device is lost or stolen. Spatium Feeless Bitcoin wallet offers cloud back-up that can be performed through Google, iCloud, or QR code activation. Read more about it in Spatium cloud backup recommendations.
6. Flexibility
Self-custodial crypto wallets allow users to make all important financial decisions independently while covering their backs in terms of safety and protection. As an analogy, we can use the work of a personal assistant who is there to help and even do some work while the full ownership of the wallet is still solely in the hands of a user.
Spatium Feeless Bitcoin crypto wallet is a self-custodial wallet powered by MPC technology. It’s secure and easy to operate. Spatium wallet is a perfect match for new users who would like to join web3 and reap its benefits as soon as possible. Also, crypto-savvies will definitely find it convenient and cost-efficient due to our Feeless feature allowing users to pay network fees in the crypto they send, not in the native crypto of the blockchain (currently available for USDC on Ethereum. More chains and tokens will be added soon).
Spatium Bitcoin MPC wallet is free to download. It’s available on Android and iOS devices.
Subscribe to our social network accounts and stay on the curve of all the buzz around Spatium!
Follow us on social platforms: X, LinkedIn, Discord, and Telegram.
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Probably you already know that web3 hosts different types of crypto wallets. There are cold and hot wallets, mobile and desktop, and external and smart contract wallets. But the most important parameter to classify the wallet is the type of private key storage. Based on who is in charge of the key safety, you will face different financial risks and benefits.
In this post, we would like to discuss custodial and self-custodial wallets. Also, we would like to answer the question of why self-custodial wallets are getting popular.
What are custody and self-custody?
The two big types of wallets based on the ownership of the private key are custodial and self-custodial (which include non-custodial and semi-custodial) wallets. Self-custodial wallets give full control over crypto to users. Either a private key or a part of the private key is stored on the user's device which makes users full custodians of their wallets. Custodial wallets store wallet private keys on third-party servers, users don’t have access to them.
Custodial crypto wallets
Custodial wallets are hosted on a website or come as an app. The most important thing to understand is that the private key is owned by a third party, a provider of crypto wallet services. Whoever owns the key, controls the wallet.
In the majority of cases, crypto wallet service providers are crypto exchanges. If you would like to come to a crypto exchange and get crypto, sell it, trade, or store it, you should have a crypto wallet. Crypto exchanges are happy to provide users with the custodial one.
Of course, such wallets are user-friendly and convenient for users with different technical backgrounds but every operation they want to perform requires approval from the service. There are limits set to the funds to withdraw. Also, the majority of custodial crypto exchanges and wallet providers require you to go through Know Your Customer (KYC) verification.
So, just to be clear: custodial wallet providers hold your private keys and may have access to the wallets for security reasons. They can freeze or limit your access to digital assets. And, most importantly in case of a hack attack, service providers are not responsible for the keys’ loss. If a custodial wallet provider gets compromised, you lose all your assets and this cannot be restored.
Self-custodial crypto wallets
Non-custodial crypto wallets
Non-custodial wallets are a group of wallets, which could be hot or cold, desktop or mobile apps, etc. But the one thing they have in common is that users of such wallets don’t need any third-party approval to perform transactions. If you operate a non-custodial crypto wallet you have full custody over the private key.
At the same time, financial freedom comes with a huge responsibility. You have to protect your private keys. They cannot be stolen, lost, or compromised in any way, because the access to the funds will be lost forever. That’s why private keys are the target of malicious hacker attacks. In addition to all that, non-custodial wallets are usually not convenient to operate, especially for users who are not tech-savvy.
Semi-custodial crypto wallets
A semi-custodial crypto wallet is a wallet that takes the best features out of custodial and non-custodial wallets. The key concept of a semi-custodial crypto wallet is that the authorization for transaction signing is shared among several parties (two or more). At the same time, users of semi-custodial wallets have full ownership over their private keys, which makes them self-custodial.
The good question is how this can be possible. When advanced mathematics and cryptography are in action, everything is possible. Multi-party Computation (MPC) is responsible for splitting a wallet's private key into several secrets (shards) and storing them in different places.
We can describe the process of tackling a wallet's private key as follows: there are two (or more) encrypted pieces of a key. When you would like to sign a transaction these pieces are activated and build a phantom private key. With the help of this phantom key, a transaction is signed.
It means that you don’t have to face the reality of self-protecting your private key and at the same time, if the service gets compromised the hackers will get access only to a part of the key, which is not enough to get access to your digital assets.
Spatium crypto wallet is a self-custodial wallet powered by MPC technology. It’s convenient to use and highly secure. Spatium wallet is ideal for users who are just making their first steps in the crypto world. At the same time, advanced web3 users praise Spatium wallet for its unprecedented level of security and funds protection.
Spatium Feeless Bitcoin MPC wallet is easy to use and free to download. It’s available on Android and iOS devices.
In addition to convenience, it brings a competitive edge by offering feeless transactions.
Try Spatium Feeless Bitcoin Wallet and the feature allowing you to pay a network fee in the currency you send instead of native chain tokens (currently available for USDC on Ethereum. More chains and tokens will be added soon).
Keep a close eye on Spatium Feeless Bitcoin wallet which is building DeFi on Bitcoin and actively working toward the introduction of feeless crypto transactions and cheapest ever peer-to-peer crypto swaps without escrow.
Follow us on social platforms: X, LinkedIn, Discord, and Telegram.
