11 February 2023 09:12, UTC
Reading time: ~3 m
Anonymous Twitter account TheNorwegian expressed concerns about Ordinal Punks NFTs, asking, “[is this] the biggest NFT scam of all time?”
On Feb. 9, Crypto reported on the rising popularity of Ordinal Punks, covering the sale of three NFTs according to social media posts, including #94, which reportedly sold for 9.5 Bitcoins ($215,800).
The novelty of NFTs on the Bitcoin chain and the chain’s provenance seems to be driving demand for these NFTs. However, some are questioning the collection’s legitimacy.
What are the concerns with Ordinal Punks?
Given that the Bitcoin chain was not originally designed to accommodate NFT functionality, there is no infrastructure to verify information such as sales or even to accommodate sales in a click-and-buy process.
Details about Ordinal Punks are restricted to people’s accounts of what happened rather than openly accessible data derived from on-chain information.
Citing the Director of Research at PROOF Collective, who got this information from a “Google doc,” TheNorweigan said Ordinal Punks have a current price floor of 55.4 ETH ($85,500). He added that this is the ballpark figure for a blue chip NFT collection but then questioned whether Ordinal Punks are worthy of being classed as blue chip.
Supporting this point, TheNorweigan pointed out the following, which leads him to think they are “sketchy”:
- Everything is happening OTC
- There are a lot of scams
- There’s low to none transparency
- You need to run a Bitcoin node to mint
- Extreme information asymmetry
Demand for Bitcoin NFTs is going crazy
@seanbonner tweeted that Bitcoin Punks, a clone of Ethereum’s CryptoPunks, is taking off right now.
Bitcoin Punks suffer the same drawbacks as Ordinal Punks due to using the same inappropriate, undeveloped NFT infrastructure on Bitcoin.
Nonetheless, according to @seanbonner, despite the lack of smart contracts and the “square peg, round hole” approach, people are going crazy in Discord, trying to snap one up a Bitcoin Punk. He advised against falling for the FOMO due to the following:
“A. There’s no market so you have to rely on trust and scammers are everywhere B. Fomo is insane and people are asking stupid prices C. Receiving is hard, transferring is harder. Again this isn’t like eth in the way that we’re all used to.”
Bonner also pointed out that Bitcoin Punks are not “official,” adding they are just a copy of cryptopunks on any chain. The same could be said for Ordinal Punks, which TheNorwegian pointed out are nearly identical to Ethereum’s MutantPunks.
“I think Bitcoin NFTs could be great for the space and bring new people into it. What I am bearish on, however, is orchestrated hypes, and influencers selling you gold-disguised rocks.“
What is happening on the Ordinal Punks Discord?
Accessing the Ordinal Punks Discord, the buy and sell activity is not as “crazy” as that described by Bonner in the Bitcoin Punks Discord, perhaps because there are just 100 of the former versus 10,000 of the latter.
However, the general channel is highly active and appears to be a place to discuss Bitcoin NFTs, not just Ordinal Punks. Upon browsing, a Google Doc on Bitcoin NFTs was discovered. It showed 43 NFT projects with Discord links and information such as supply and notes for potential buyers.
According to admin FlowStay, as of the evening of Feb. 9, 17 Ordinal Punks were still available to buy.
Also, a review of the sales shows Ordinal Punks were changing hands for a lot less in the early days. The first sale occurred on Feb. 2, when #69 was sold for 0.07 BTC. Scrolling down into the present shows a steady price increase over time.
The sale of #94 was confirmed at 9.5 BTC and was the most expensive noted in the channel.