# Ordinal Theory

In practice, Ordinals are based on a theory called "Ordinal therory".

First, we must start with understanding 'Ordinal Theory' created by [@rodarmor](https://twitter.com/rodarmor), a way to label/identify individual satoshi's (100,000,000 sats = 1 BTC) on the Bitcoin network. \
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With this theory, each satoshi has a unique number in order of its creation, starting with index 0 and proceeding in the order in which the coins are mined.\
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This numbering is called "ordinal number" or "ordinals", which refers to the mathematical sense of the term that specifies the rank of an object belonging to a set.\
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Now with the ordinal numbering system, there is a way to track data inscribed to individual sats and their owners.

This data is stored permanently on-chain and can not be modified once inscribed.\


_A couple of facts:_

* There are no smart contracts
* Inscriptions are 'wrapped' in sats for 'postage', so some wallets will not charge a transaction fee.
* Taproot (ordinal supported BTC addresses) start with bc1p...
* This is not the first time data has been stored on BTC.



<figure><img src="https://615835444-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FzF6bMqSubDuYVK8WvoOt%2Fuploads%2F9w44ZYsJejTOEzOuyj7A%2Froda.jpg?alt=media&#x26;token=bc621b7b-905f-4b1f-8d34-f5812c94e05e" alt=""><figcaption><p>Casey Rodarmor</p></figcaption></figure>
