In a groundbreaking development, Bitcoin - often dubbed 'digital gold' - is set to integrate the trading of physical gold on its blockchain, courtesy of the Ordinals protocol. This innovation allows for the encoding of physical gold ownership into non-fungible tokens (NFTs) on the Bitcoin network.
Swarm Markets, a real-world assets platform licensed by the German financial regulator BaFin, has partnered with OrdinalsBot to offer investments in gold bars on the Bitcoin network. This move marks the first time real-world assets will be available on Trio, a marketplace developed by OrdinalsBot, which is slated to launch by the end of the year. The Ordinals protocol involves inscribing individual satoshis - the smallest unit of Bitcoin - with unique data, such as images or text, thereby creating unique digital assets akin to NFTs. In this case, satoshis will be inscribed with gold kilobar serial numbers, enabling their trade on the Bitcoin network.
Historically, Bitcoin has been compared to gold due to their shared characteristics as stores of value, stemming from their limited supply. However, their performance can diverge, particularly during periods of economic uncertainty.
A notable example was the third quarter of this year, when concerns about a U.S. recession led to gold prices climbing 10% to record highs, while Bitcoin saw a negligible gain of 0.8%. According to Timo Lehes, co-founder of Swarm, the integration of physical gold on the Bitcoin blockchain via Ordinals means investors no longer have to choose between holding real or digital gold, as they can now hold both simultaneously using the blockchain as a common infrastructure.