Rising Bitcoin Fees Prompt Renewed Battle Over Ordinals, BRC-20 Tokens

Opinion6mos agoreleased Joe
129 0

While some call for purging the NFT-like inscriptions, others say they are good for the network.

By Jason Nelson

Rising Bitcoin Fees Prompt Renewed Battle Over Ordinals, BRC-20 Tokens
Source: Shutterstock
Bitcoin is booming, and so are network fees. Alongside the euphoria among investors over Bitcoin’s recent surge above $44,000—a 20-month high—increased network congestion is prompting another battle over the NFT-like Ordinals project and BRC-20 tokens.

Ordinals remain at the eye of a storm over what should or should not be allowed on the Bitcoin blockchain. On Wednesday, Bitcoin Core developer and Ocean Mining CTO Luke Dashjr railed against Ordinals inscriptions and their effect on the Bitcoin network.

““Inscriptions’ are exploiting a vulnerability in Bitcoin Core to spam the blockchain,” Dashjr wrote on Twitter, adding that Bitcoin Core lets users limit the size of extra transaction data. “By obfuscating their data as program code, inscriptions bypass this limit.”

Initially launched by fellow Bitcoin Core developer Casey Rodarmor in January, Ordinals inscriptions—similar to NFTs—are digital assets inscribed on a satoshi, the smallest denomination of a Bitcoin. Inscribing media like artwork and video on individual satoshis is possible thanks to the Taproot upgrade launched on the Bitcoin network in November 2021.

However, the popularity of inscriptions has also caused an increase in the cost of sending a Bitcoin transaction, which Hansen explained is due to the resulting surge in demand for immediate block space. Detractors point to this increased cost as another reason the protocol should be stopped.

“With these transaction fees being high, it means that if somebody wants to send a transaction, it gets confirmed immediately,” Luxor Technology founder and CEO Nick Hansen told Decrypt. “It will be more expensive, and if you aren’t willing to pay that extra fee, it will take longer.”

While Hansen acknowledges that he does not follow the NFT space closely, he does see Ordinals as a good use of Bitcoin block space and not only as a source of congestion, as detractors may claim.

“I’m pro-use of block space, and Ordinals right now seemed like a very good way for you to get that block space utilization because that’s critical for my customers, who are miners,” Hansen said.

 

 

More than 46 million such inscriptions have been made since January, and that tally includes inscriptions tied to BRC-20, a type of fungible token minted on the Bitcoin blockchain.

Showing the continued popularity of Ordinals inscriptions, an Ordinals BRC-20 token, ORDI, set a new high of $68.37 on Wednesday. ORDI now has a market capitalization of $1.3 billion. On Sunday, ORDI’s market cap was $873 million, according to CoinGecko.

BRC-20 is another Ordinals protocol that lets users mint and transfer whatever tokens they please via the Bitcoin blockchain, leading to a proliferation of meme coins on the network.

However, detractors call Ordinals a misuse of the Bitcoin network and have called for them to be blocked. Dashjr previously suggested that Bitcoin developers implement “spam filtering” to block Ordinals transactions.

“Action should have been taken months ago,” Dashjr wrote at the time. “Spam filtration has been a standard part of Bitcoin Core since day 1.”

In 2011, Dashjr launched the Bitcoin Knot protocol, a version of Bitcoin Core that can modify transactions to exclude non-financial transactions and extra data, like inscriptions, while not modifying blocks to avoid forking the network.

Bitcoin Knots is maintained by Dashjr, who suggested on Twitter that the next version of the protocol should help push Ordinals off the Bitcoin network.

“This bug was recently fixed in Bitcoin Knots v25.1,” Dashjr wrote. “Bitcoin Core is still vulnerable in the upcoming v26 release. I can only hope it will finally get fixed before v27 next year.”

Dashjr has not yet responded to Decrypt’s request for comment.

While Dashjr may view Ordinals as “spam,” Bitcoin miners and those who support them see the practice as a boon to the financial stability of the network and push back on the claim that Ordinal inscriptions are bad for the blockchain.

“The problem that I have with the way [Dashjr] described [inscriptions], as spam, is his opinion,” Hansen said. “He might find that this extra data is not interesting, important, or valuable. But that doesn’t mean everybody does.”

“Luke is not the arbiter of what is considered spam and what is considered a quote-unquote valid transaction,” Hansen continued. “That’s where my criticisms of his approach, or at least the way that he describes these types of transactions as being spam, is… because he’s arbitrarily applying what he thinks is spam because it happens to be something he’s not interested in or doesn’t approve of.”

Edited by Ryan Ozawa.

This article is sourced from the internet: Rising Bitcoin Fees Prompt Renewed Battle Over Ordinals, BRC-20 Tokens

© Copyright Notice

Related articles

No comments

You must be logged in to leave a comment!
Login immediately
No comments...