Ordinals and Inscriptions: A Closer Look At Bitcoin’s Latest Madness
• In the Bitcoin world, Ordinals and Inscriptions are made up conventions for tracking sats (fractions of a bitcoin) across transactions.
• An inscription is a Bitcoin-native digital artifact or NFT that is coded in such a way that it is written into transaction witnesses, and never enters the UTXO set.
• The pro-Ordinals and inscriptions case could be seen as “Come for the fun, rich art, stay for the decentralized digital money.” However, there are concerns raised with regards to reduced accessibility to transact on Bitcoin and increased storage and bandwidth requirements.
What Are Ordinals?
Ordinals are a way of tracking sats (a fraction of a bitcoin) across transactions. It’s a convention of numbering sats in the order they’re mined into existence, and tracking them across transactions in a first in, first out (FIFO) method. As Bitcoin transactions are made up of inputs and outputs, the first satoshi in the first input is considered to be transferred to the first output of a transaction. There are conventions around which Ordinals are uncommon, rare, epic etc.
What Is An Inscription?
An inscription is another made-up convention where sats can be inscribed with arbitrary content – kind of like a Bitcoin-native digital artifact or NFT. Because they are coded in such a way that they are written into transaction witnesses only, they never enter the UTXO set.
The Bull Case For Ordinals And Inscriptions
The pro case for ordinals/inscriptions could broadly be understood as: “Come for the fun/rich art; stay for the decentralized digital money” – an argument that Bitcoin does it better than shitcoins’ NFTs due to its immutability & always-onchain nature.
Concerns Raised With Inscriptions
The main concerns here include reduced accessibility to transact on Bitcoin due to increasing backlogs & lower fees per real byte due to witness discounts; plus reduced ability for users to run full nodes because of increased storage & bandwidth requirements. Finally there’s also concern about illegal material being recorded into blockchain which might discourage some users from using it at all.
Ultimately whether or not you’re pro or con inscriptions comes down to personal opinion – however it’s important we consider all implications so we can make informed decisions about how we use this technology going forward!