Bitcoin Bandits burn $95K CryptoPunk NFT to revive it as Ordinals inscription

CryptoPunk #8611, a valuable CryptoPunk NFT derivative worth approximately $95,000, has been permanently removed from circulation and symbolically revived as the Ordinals inscription 12,456,749 on the Bitcoin blockchain.

#8611 was sold for around 55 Ethereum on Saturday, equivalent to $95,000, as reported by Etherescan. Shortly after the sale, the NFT was intentionally burned in a manner that tied it to the inscription 12,456,749, which bears the same image as the original CryptoPunk.

The decision to destroy CryptoPunk #8611 was initiated by Nathan Stein, a developer at Wolf Capital, and supported by the Bitcoin Bandits community, a Western-themed collection of Ordinals inscriptions.

Burning a digital asset involves permanently locking it in a digital wallet that is beyond anyone’s control. In the case of CryptoPunk #8611, it was sent to a well-known burn address containing $21 million worth of Ethereum.

An individual named Minh on Twitter shared a video documenting the purchase and burning of CryptoPunk #8611, describing the entire process as “chaotic, yet beautiful.”

Ordinals, a recently launched Bitcoin protocol, allows the creation of NFT-like assets on the Bitcoin blockchain by “inscribing” data onto individual satoshis, the smallest unit of Bitcoin. This data can include images, videos, text or even BRC-20 tokens.

While NFTs are still an emerging field in the digital art industry, Ordinals inscriptions on Bitcoin are even newer, leading to a surge of excitement, issues and concerns of scams within the realm of the oldest cryptocurrency.

“Teleburn” becoming common practice

As the Ordinals community keeps growing, it has become increasingly common to “teleburn” high-value NFTs from the Ethereum blockchain and redirect them to other assets on Bitcoin.

This Saturday’s burning of the CryptoPunk NFT is not the first instance of such an action. In February, an NFT from the Bored Ape Yacht Club collection, valued at around $169,000 at the time, was burned by an individual named Jason Williams, who found pleasure in likening it to “throwing a Lamborghini into a trash compactor.”

Some burnings, however, can happen by accident. Last April, an NFT trader named Brandon Riley accidentally burned a CryptoPunk NFT that he had purchased for 77 Ethereum. The CryptoPunk #685 was sent to a burn address by mistake, rendering it irretrievable and forever removed from circulation.

Riley had intended to wrap the NFT in order to take a loan against it and earn a yield on NFTfi.com. However, his attempt to convert the CryptoPunk into an ERC-721 token went awry when he inputted the wrong address.

While Riley burned his NFT by mistake, the burning of CryptoPunk #8611 served a purpose, as explained by Stein. The goal was to create a series of Ordinals inscriptions representing fractional ownership in CryptoPunk #8611, even though the original asset itself can no longer be owned on the Ethereum blockchain.

After the current inscription pointing to CryptoPunk #8611 is ceremoniously sent to a digital wallet belonging to Satoshi Nakamoto, the pseudonymous creator of Bitcoin, it will become a one-way journey, explained Stein in a tweet.

In addition to demonstrating a new direction, the Bitcoin Bandits community, who collectively purchased CryptoPunk #8611, is participating in a contest related to a separate inscriptions project. However, the primary intention of this action was to show that CryptoPunks deserve a better fate than being associated solely with Ethereum.