Based on RelayX’s Order Lock, which had essentially the same functionality for RUN tokens, Ordinal Lock allows sellers to lock their token in a Bitcoin script on the blockchain, where the only way to unlock the token is to pay the seller a fixed amount of Bitcoin SV to their specified address. Sellers can cancel this on-chain listing any time they wish.
Double spending is not possible, as the script’s security is enforced by miners, natively on Layer 1. Any second attempts to unlock the script would fail, therefore is much more secure than sending coins separately from the token in two transactions, or dealing with OTC custodians, thus introducing counterparty risk. Previously I wrote about how on-chain, trustless peer-to-peer trading is ideal for commerce, but from a technical perspective that covered PSBTs.
PSBTs (Partially Signed Bitcoin Transactions) are private by nature. Those definitely have use depending on how the seller wants to deal with customers. However, dealing publicly has great benefits.
Completed sale data recorded publicly gives the market confidence. If everyone knows when and how much a trade took place, every participant can move forward, acting with the same information base.
Confidence and security in markets attract liquidity. Additionally, sellers feel more comfortable listing assets for sale when they know previous sales prices. Contrary to centralized exchanges where the trade data is stored on private servers, giving opportunities for market manipulation such as withholding certain trades, spoofing, as well as incentives to front run their own customers.
The Ordinals markets on BTC are screaming for something like a global order book, yet do not even realize what they are asking for is not only possible with unhampered Bitcoin Script but already implemented.
I really wish BTC liquidity could be unified in a decentralized way
— Holland Cedar Capital Management (@hollandcedarcap) June 3, 2023
The user experience on BTC is clearly headed towards this goal, with interoperable wallets implemented across marketplaces such as Ordinals Wallet, Unisat, and Ordswap. For example, with a Unisat wallet, I can log in to all three marketplaces and list the same asset on each exchange.
However, this is a poor user experience as they must perform the same action for each exchange they want to list. On the technical side, if the asset is purchased on one marketplace, the listing becomes invalid on all the others where the asset was listed, which would give errors and more poor user experience on those marketplaces. Moreover, if a new exchange comes online with new features or attracting liquidity for that type of asset listed, the user can miss out on a potential sale if they are not able to manually list there quickly.
The global order book does not have these issues. Listings would sync to all markets immediately, and new exchanges start immediately with orders and sales data. Optionally, markets can curate what they show for sale, but everyone can observe the public ledger and come to the same conclusions.
Imagine listing your home for sale but only on Zillow (not on Redfin, MLS, Realtor.com, etc.) Note that because the MLS is private, and while efficient, does have syncing issues with information. Stale listings may persist on certain sites even though price cuts or sales have indeed occurred. With Bitcoin, information propagates instantly, notifying all parties of the completed sale. Thus, the market can react to that information instantly as well. This is what a Hyperbitcoinized economy will look like.
Watch: Kurt Answers Viewer’s Questions about Ordinals in BTC and BSV + BTC Conference 2023
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