To JPEG or not to JPEG on-chain, that is the question. The latest drama on bitcoin is about ordinals.
The song is so catchy. It’s by this guy.
Wait. What the fuck are ordinals?
Good question.
If you’ve been busy this past week you might have missed out on some brand new drama. So, ordinals.
They’re just inscribed sats, kinda like NFTs but not exactly? They carry information up to <4mb which is the maximum block size, and that’s where the dichotomy lies.
You see, to run SegWit (Segregated Witness) we added a discount of 75% on mining fees for data inscribed on that part of the block. Some clever bitcoin developer called Rodarmor figured out how to inscribe other kinds of data on that space, taking advantage of the discount to write unique sats with said <4mb of data. And naturally, that means memes, hilarity and nonsense.
You can see the latest inscriptions on https://ordinals.com/
A lot of people don’t like that. On one hand, it’s a way to keep the blocks full and that actually helps with the security budget. They may get a discount but every inscription costs about 5 dollars right now, which goes to a happy miner.
Adam Back doesn’t like them too much.
We also ran a poll on twitter, the sentiment is split:
Personally, I like them. I still haven’t tried to run ord, the modified bitcoin core client that can handle individual inscribed sats so as not to spend them accidentally.
The most sober comment I’ve seen is from Druid.
We do not need NFTs on the base layer of the new global reserve currency. I like my sats fungible. Build NFTs on #Bitcoin‘s upper layers where they belong. We already have them on
@Liquid_BTC, and very soon will have them on Lightning via Taro.
Creating NFT tech on the base layer is also not a sustainable market. As on-chain transaction fees increase over time, tech such as ordinals will be priced out of the market. It will not make sense to pay >1 sats to make 1 sat “special”, and then even more to transfer it.
You can build the tech if you want, and inscriptions are indeed valid Bitcoin transactions, but the on-chain NFT marketplace is doomed to failure.
Druid
We’ll end up with the same problem as Ethereum had when bitcoin pumps. Those inscriptions will probably become too expensive to mint and send, giving way to layer 2 solutions such as Liquid which we’re already using on Raretoshi.
We’ve also ended up with a funny moment where Eric Wall got the biggest taproot transaction so far, look at this chonk of an inscription and read the thread:
Pledditor also had a serious argument against them:
Legendary bitcoin artist Lucho Poletti seems to like them:
Harsh-but-true words from a more technical point-of-view:
Censorship. Resistant. Network. If you are crying about people doing things you don’t like with it, you have completely and utterly lost the plot.
Brian_trollz
Yellow was not helpful at all:
If all of this is confusing, maybe this interview will explain ordinals better? I’m not sure, I didn’t even watch it.
The only thing that’s for sure is that Rodarmor tossed a bitcoin grenade on the whole ecosystem and is enjoying the chaos!
What do you think? Do you see ordinals as a good thing or as an attack on bitcoin?
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