Bitcoin has changed. And the purists aren’t happy. The center of the debate revolves around Ordinals, a new protocol (ord) created by Casey Rodarmor that allows the registration of digital artifacts in the Bitcoin blockchain. Or what is the same, it brings the concept of NFTs to the Bitcoin network.
Associating images to Bitcoin transactions. These Ordinals take advantage of the OP_Return function to add data to Bitcoin transactions. Specifically it is being used to add images.
It’s something we’ve traditionally seen on the Ethereum network, but now it’s found on Bitcoin as well. In the past it was not possible, since Bitcoin only allowed a very limited amount of information to be added and there were high associated fees. But that changed in 2017 and especially at the end of 2021.
Taproot promised changes. And they have arrived. It took a couple of years for what was a technical possibility to become a real addition. With the SegWit update, the cost of adding data to transactions was lowered, but it was the Taproot update that improved compression and made it easier to add ‘smart contracts’ to Bitcoin.
We went from a limit of 80 bytes to 4 MB. An expansion of the information that can be associated with Bitcoin high enough to be able to add JPG images.
These images can already be found on the Ordinals website, where we find images linked to a Satoshi, the smallest unit of Bitcoin possible (0.00000001 BTC).
“Unnecessary garbage.” You only need to go to the Ordinals website to see that the quality of the associated images is far from what one normally thinks when talking about NFTs. Almost most are just memes. Logically the value of the images can improve in the future, but criticism has already appeared that these additions will not bring anything good to the Bitcoin network.
Adam Black, one of the first developers of Bitcoin and CEO of Blockstream, has been the one who has published one of the most direct criticisms, collecting the sentiment of others. He basically believes that adding these NFTs to Bitcoin is just wasting space and worsening efficiency.
“you can’t stop them” well ofc! bitcoin is designed to be censor resistant. doesn’t stop us mildly commenting on the sheer waste and stupidity of an encoding. at least do something efficient. otherwise it’s another proof of consumption of block-space thingy.
— Adam Back (@adam3us) January 29, 2023
The first patches have already arrived. Less than two weeks have passed since the Ordinals website update and its creator already explains that he is going to manually block some images on the web. Due to the nature of the protocol, it cannot create a filter for all images, but they have seen how from memes, they have gone to some out-of-place pornographic images.
Good for miners; away from the initial spirit. They defend that Bitcoin was created thinking to be a refuge value and a payment network between users, not as an alternative to Ethereum. With the Ordinals, they fear that Bitcoin has a high number of transactions that could worsen the experience with purely financial payments and movements.
The incorporation of these tokens could favor the miners, since having more data to process, their fees could increase. You only need to look at Ethereum to see where the shots could go. It is difficult to reach cases as extreme as excessive increases in gas rates, but if these Ordinals become popular, a change could be noticed.
The creator of the Ordinals defends that his impact will be almost zero. “This use of the blockchain is probably the lowest impact use compared to other things that could be done. Full nodes download this data, but then ignore it,” Rodarmor explains. In other words, for these Ordinals to increase the costs of the Bitcoin network, they should occupy a complete block, but since they occupy so little of the base (a satoshi), they are hardly going to represent a substantial impact.
Freedom or optimization. There are two positions. Those who defend that the Bitcoin network can cover many uses and that these Ordinals are one more case. And on the other hand, those who consider that network space is being wasted Bitcoin into something useless, however small that space may be.
A comparison with physical money could be the use of banknotes. Unfortunately, not all banknotes or coins are used to pay. There are also those who take advantage of them to decorate, as a souvenir or for any use not strictly related to their value.
These Ordinals are an addition to the Bitcoin network that the latest update has enabled. We will see if they stay as a niche extra or if they continue to grow so that Bitcoin becomes more similar to Ethereum. It is a debate that goes back to the origins of Bitcoin, we will see how it evolves.
Images | Shubham
