📝 Hi, I’m 𝟏𝟎, this is the popular science series of #BlockchainDevelopmentHistory, this issue’s content: Bitcoin Inscriptions.
The Bitcoin inscription is a randomly generated number. Although it has no direct value, it plays a key role in maintaining network security and stability, becoming an invisible "shield" for the Bitcoin ecosystem.
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1. What is Bitcoin Inscription?
Bitcoin Inscriptions is a technology that uses the Ordinals protocol to engrave data into the smallest unit of Bitcoin, satoshi. Each Bitcoin can be divided into 100 million satoshis. The inscriptions are like words engraved on a digital slate. Once written, they cannot be changed or deleted, giving them scarcity and collectible value. This technology supports a variety of content such as text, images, videos, and audio.
Inscriptions are mainly divided into two categories: text and image. Text inscriptions are often used to create BRC-20 Tokens, which are similar to Ethereum's ERC-20, allowing tokens to be generated and traded on the Bitcoin network. Representative works include Ordi and Pepe. Image inscriptions are mainly used to create Bitcoin NFTs. Their uniqueness and scarcity are very popular in the market. For example, the Genesis image was once valued at tens of millions of dollars.
2. How Bitcoin Inscriptions Are Generated
Bitcoin uses the Ordinals protocol to number and locate the smallest unit of "Satoshi", making it possible to cast inscriptions. Through this protocol, developers or users can engrave token information, pictures or text on any "Satoshi" to create BRC20 tokens, Bitcoin NFTs, etc.
Unlike Ethereum smart contracts, the Ordinals market allows ordinary users to quickly mint Bitcoin inscriptions. Users only need to enter the inscription information on the platform and pay the minting fee to complete the minting easily.
The types of minting in most Ordinals markets mainly include BRC20 tokens, pictures, and text inscriptions. Pictures and text inscriptions can be minted at once, while BRC20 tokens need to be minted in batches due to quantity restrictions and block capacity, and the time may be unstable and even take several days.
The good news is that unless the first minter finishes all the tokens at once, others can continue to mint within the total minting amount and only need to pay the network gas fee. For example, if A wants to mint a BRC20 token called X Token, others can participate in the minting before the total amount is reached.
This method of minting BRC20 tokens by paying gas fees provides ordinary investors with a low-cost opportunity to participate, making it easier for them to enter the Bitcoin inscription market.
3. What is the use of Bitcoin inscriptions?
Bitcoin inscriptions refer to the way data is recorded on the Bitcoin blockchain, which actually increases the demand for block space. Increased demand leads to higher block space fees because miners prioritize processing transactions with higher fees.
As Bitcoin block rewards are halved, miners will rely more on transaction fees to keep the network secure. Inscription-related transaction activity in the Bitcoin mempool has also increased significantly recently, although most transaction fees are currently low, indicating rising demand for block space. Inscription transactions may become the buyer of last resort in the mempool due to their lack of priority in urgent financial transactions.
Since the total amount of Bitcoin and inscriptions is limited, early inscriptions may become very valuable in the NFT market due to their uniqueness and historical value.
4. Bitcoin Inscription Token
1. ORDI: ORDI is the first inscription token created based on the Ordinals protocol and is also the native token of the Ordinals project.
2. RATS: RATS combined with the Ordinals protocol demonstrates the intersection of blockchain technology and digital creativity.
3. SATS: SATS is a popular BRC20 token, derived from the smallest unit of Bitcoin, and is committed to becoming the infrastructure for encrypted payments. It not only covers inscriptions, but also extends to multiple fields such as wallets, browsers, and markets. It is a pragmatic project for building an ecosystem.
5. Tail
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