Ordinals Scrapyard turns Bitcoin NFT wreckage into tax write-offs

A new website called Ordinals Scrapyard is allowing users to see exactly how much money they’ve lost buying inscriptions — and harvest the losses for tax reporting purposes.

The site is an embarrassing bookend to a series of stories about the theory that Ordinals could bring NFT trading onto Bitcoin’s blockchain despite its popularity on other chains like Ethereum and Solana.

Despite being heralded in early 2023 by Bitcoin developer Casey Rodarmor as a Bitcoin-native protocol for minting, buying, and selling collectibles, the floor price of most inscriptions has now fallen to $0.001.

Indeed, prior to the website’s launch, most inscriptions had no bid whatsoever and the vast majority of purchasers minted or purchased their NFTs once and now could not resell them.

ORD, a centrally maintained and off-chain record-keeping system, attempted to chronologically number each sub-unit of every bitcoin (BTC) in existence.

By tracking these satoshis or “sats,” each worth 1/100 millionth of one BTC, Ordinals traders could inscribe and pass around sats with numismatic value due to the extra data they added.

At their speculative peak, certain inscriptions traded for over $1 million. Most are now worth only the sat on which they were inscribed.