Home Opinion Why Ordinals, BRC-20 is bad for Bitcoin

Why Ordinals, BRC-20 is bad for Bitcoin

0 comment

With the advent of the Ordinals protocol, Bitcoin has gone from being a somewhat outdated single-asset chain to something more exciting.

However, this newfound excitement has sparked a backlash from astute purists who argue that BTC is not intended for non-monetary transactions, with some even calling the protocol a spam attack on the network.

Ignoring the protests, Ordinal’s Capitalists argue that a permissionless system also includes the freedom to use Bitcoin in any way. They accuse purists of trying to spoil their fun.

A disagreement sets the stage for a potential chain split, which is ultimately not in everyone’s best interest.

The taproot that opened Pandora’s box

Taproot soft fork rolled out in November 2021. At the time, this was primarily seen as an upgrade to improve network security, efficiency, and scalability. However, it also enabled the implementation of executable commands and specific scripts, laying the foundation for Ethereum-like features such as smart contracts and dApps.

In January, the impact of this additional Ethereum-like feature began to take shape as developers. Casey Rodermore Ordinals released. This protocol allows each of his 100 million satoshis in Bitcoin to be written with additional metadata such as text, images, videos and code.

By February, we used the Ordinals protocol to write wizard jpegs to the blockchain, opening the door to the Bitcoin NFT market. But as a “square peg, round hole” usage of this technology, acquiring and trading bitcoin NFTs is a cumbersome and technically challenging task, and knowledge of node synchronization and his release of NFTs upon payment I had to trust a third party to do that.

Supporting wallets such as Ordinals Wallet, Xverse and hiro Wallet have recently been rolled out to address these pain points, bringing the process closer to the standard experience NFT buyers are accustomed to.

Before Ordinals NFTs went live, the average block size hovered around 1.2MB, but since rollout, subsequent blocks have more than doubled on average, negatively impacting speed and scalability. In addition, rising transaction fees and chain bloat due to backlogs of unconfirmed transactions compound the usability problem.

Average Bitcoin Block Size (MB)
sauce: Average BTC block size on Blockchain.com

Introducing the BRC-20 Token

things went further march When anonymous developer “Domo” launched the BRC-20 token, bringing a fungible token standard to Bitcoin. By adding JavaScript Object Notation (JSON) Dear SATOSHIS, the details of the characteristics of the BRC-20 tokens (such as minted and distributed values) are stored in the network.

Stimulated by the memecoin season, the market cap of BRC-20 tokens hit a peak value of $1 billion on May 8th. However, due to growing market uncertainty and the prevalence of memetic coin lag, there has been a significant drawdown since then, dropping to $574 million as of 2019. press.

Around Kucoin, the surge in popularity of the BRC-20 exacerbated the problems seen with NFTs, causing significant network delays and some users reporting confirmation times of four hours. Additionally, the BRC-20 token further contributed to the rise in transaction fees.

Despite the usability issues, miners can use the MinerHashPrice, which measures a miner’s income relative to their contributions to the network, the MinerHashPrice, which measures the mined coin sales rate, and the mined coin sales rate. Profit from on-chain metrics such as miner hash prices that examine Revitalization of the Bitcoin mining space.

of crypto slate Our analysis concludes that if this momentum continues at its current pace, miners will experience increased profitability and increased confidence in the network, leading to a propensity to retain mined coins.

Ordinal community division

Prominent members of the Bitcoin community have expressed their support for Ordinals.For example, MicroStrategy Chair Michael Thaler He said the protocol was what caused the sentiment to turn bullish, adding that if he were a miner he would be ecstatic.

He also pointed out that the technology could lead to many new applications in the long term, some of which could solve serious social problems, citing writing wills on blockchain as an example.

“You can also engrave my last will. If my last will transfers $1 billion from me to you, burning it into a blockchain and cryptographically verifying it will require you to How much is it worth to

in the meantime, Willie Woo expressed a more realistic view, stating that there are pros and cons to consider. Additional transaction fees are a strong incentive for miners, but will become more important in the future as they decrease each time the block reward is halved, but fewer people are willing to run higher bandwidth nodes. so at the expense of more centralization.

Given that decentralization has not yet “taken hold,” Woo said Ordinals and the resulting benefits to miners are too early for his taste.

I would have liked the impact of the ordinals to come long after security budgets had become more urgent, a time when decentralization had already taken hold.

Jan3 co-founder Samson Maw I underestimated the importance of ordinals. He said paying miners huge fees is unsustainable in the long run, so there is no need to worry about congestion or high fees.

“There are question marks as to how long they can do it. Maybe it takes a few more days. Maybe a week. But wasting money is not a sustainable model. It is clear.”

Mow made his position clear, explaining that Ordinals is a hype-driven market fueled primarily by short-term money making. Moreover, he predicts that the sector will disappear once token issuers make enough profit.

“They exist to draw attention to gullible people by doing crazy antics…

However, like most projects in the blockchain space, the relevance fades once the token issuer makes money. “

What do you think of Satoshi?

Satoshi Nakamoto cannot express an opinion on whether ordinals are good or bad for Bitcoin. But people turned to his Bitcointalk forum posts to try to understand his views on the matter.

In an article from December 2010 directorNakamoto endorsed the idea of ​​keeping the blockchain lean and bloated with the goal of maximizing scalability.

“Bringing all the proof-of-work quorum systems in the world into one dataset is not scalable.”

Nakamoto talked about separating non-monetary transactions into a separate chain called BitDNS. BitDNS is thought of as a sidechain or Layer 2 with the Domain Name System Internet Protocol. The project has since become a fully independent alternative chain and has been rebranded. name coin.

“Bitcoin and BitDNS can be used separately. Users don’t have to download both in full to use either. You may not want to download all of

Based on this, Nakamoto wanted to keep the mainchain dedicated to financial transactions, while allowing the sidechain/layer 2 to handle large-scale data functions.

Bitcoin core developers also seem to adopt a purist position: @frankdegodshas announced plans to expand the Taproot spam filter to remove Ordinals completely.

Bitcoin civil war

Looking back to 2017 and the Bitcoin Cash hard fork, the question of whether Bitcoin’s block size should be increased to accommodate ordinals has sparked debate within the community.

Further chain splits are increasingly likely given the lack of consensus on the best path forward.but of those 105 BTC Fork It is worth noting that to this day everything has been forgotten.

The most successful fork, Bitcoin Cash, is down 98.9% against Bitcoin from its November 2017 peak of 0.43. This suggests that the Ordinals fork will likely face major challenges and the split will be wasted.

Bitcoin Cash - Bitcoin Weekly Chart
Source: BCHBTC on TradingView.com

There is no shortage of alternative Layer 1s that provide tokenization with the added benefit of more advanced features such as event logic processing. Additionally, these alternative Layer 1s can operate at scale and at a lower cost than Bitcoin, making Ordinals like a dinosaur by comparison.

Yes, Ordinals has breathed new life into Bitcoin, especially in terms of novelty and mining sustainability. But other chains are better when it comes to tokenization.

Moreover, so far, the primary use case for this protocol has been memetic coin investments, which lack practicality, lack collective benefits, and do not contribute to the goal of abolishing the corrupt fiat currency system.

Ordinal numbers are bad for Bitcoin because they interfere with the goal of revolutionizing money.

index (2)

About Us

Coingeography is a principal independent digital media resource with a coverage of comprehensive news on Crypto assets, NFT, Metaverse and the surging Web 3 space. We here deliver the most authentic and precise news from the arena of the Web 3 space and crypto assets. 

Feature Posts

Newsletter

Subscribe my Newsletter for new blog posts, tips & new photos. Let's stay updated!

Copyright ©️ All rights reserved. | CoinGeography – Powered by Corum8