Here are 10 little bits of knowledge to share with you:
1. If the Bitcoin Knots client, as Luke said, rejects transactions containing the $Ordi inscription after upgrade, will the inscription still work?
Answer: If it is the Bitcoin Knots client's turn to generate a block, the inscription transaction will not be available (unable to be uploaded to the chain).
2. So is the probability of Bitcoin Knots client generating blocks high?
Answer: It is currently relatively small. Currently (December 2023) there are more than 17,000 Bitcoin Core clients, and there are less than 100 Knots clients (but it can reach 500 when it is relatively high).
3. Wait, what is the client?
Answer: For the PoW blockchain, there is a software that needs to undertake the three functions of "storage ledger, mining and wallet". This software is the "client". Because the blockchain is open (permissionless), anyone can theoretically develop a client as long as it satisfies the consensus of this chain. So there can be various clients, such as Bitcoin Core and Knots.
4. If Bitcoin Core really follows up and decides to ban inscription trading, will inscriptions be completely untradeable?
Answer: No. Because the Bitcoin Core client needs to be subdivided, many people are using older versions. So far, among the 17,000+ Bitcoin Core client users, 9,000 are using versions 24-25 and 5,000 are using versions 21-23. Therefore, even if the rules prohibiting the abuse of block space are added in version 27, the old version can still be used normally.
So as long as you wait patiently and wait until it is the turn of the old version Core to produce blocks, this inscription can continue to be used. That is, for example, it can be uploaded in 10 minutes now, but it will take 30 minutes in the future. Of course, miners have a tendency to upgrade to the latest version. If everyone gradually upgrades, the usability of inscriptions will become very poor.
5. If Ordi decides to fork the Bitcoin chain, will it succeed?
Answer: Technically, forking is very simple. Just copy the Bitcoin Core code and you can use it without even needing to change it (because the old version supports it). By consensus, forking is difficult. What is consensus? It is almost impossible to get miners, exchanges, Holders, and even the SEC to all agree that "the big pie that includes the small pie is the real big pie."
6. I must fork, so does a forked Bitcoin make sense?
Answer: Yes, but it is very limited. What Bitcoin is proud of is the security guaranteed by its powerful computing power. If there is a new chain, which is not as secure as Bitcoin, and can issue various digital artifacts...wait, then why not use the EVM chain?
7. Are Ordi and BRC-20 really using the Bitcoin blockchain by exploiting vulnerabilities?
Answer: Yes, but the word "exploiting loopholes" is a bit too much. I think it is at best "bypassing restrictions". After all, subjectively speaking, Ordi does not go as far as "exploiting vulnerabilities," a term generally used to describe hackers. But objectively, it does result in a waste of Bitcoin block space.
8. Really? What is the process of engraving? How to get around it?
Answer: "Engraving" means selecting a certain Satoshi BTC, that is, 0.00000001BTC, and "dying" it. Then use Taproot (which is one of Bitcoin's new technologies) to make notes on this 1 Satoshi Bitcoin in the form of a text script. (There is another piece of trivia that you donât need to know. Due to dust attack restrictions, although 1 Satoshi is enough in theory, it actually takes 546 Satoshi). For example, note: The protocol is Ord, the format is UTF-8, and the content is "hello world".
If we insist on a metaphor, it would be roughly equivalent to: WeChat red envelopes are originally transfers. As a result, now I transfer 1 cent to you every time, and the two of us have to chat through the notes on the red envelope. This is hardly an exploit, but probably an abuse. Normally Bitcoin does not support making NFTs, but it is realized in disguise through this form of "transfer + notes". At the same time, through the use of Taproot technology, the original upper limit of notes has been bypassed, allowing it to increase from a few bytes to a maximum of 512 bytes.
8.5 A quick aside: Notes and smart contracts are different, you should know that. Smart contract means signing a contract. And notes are notes. The effectiveness of the two is not the same. This is also one of the differences between Ethereum NFT and BRC inscriptions. -If I use a smart contract to transfer money to you, it is a real transfer that cannot be denied. -If I transfer money to you with a note, for example, the inscription of Todd now belongs to Alex, I just wrote it in the note. Now with this agreement Ordi, the ruling considers this note to be valid, and it is deemed that my transfer to you is successful.
9. The inscription is not an NFT, right?
Answer: Indeed not, there is a difference between the two. A lot of NFT data is stored on the chain, and all inscriptions are stored on the BTC chain. Of course, it is a double-edged sword, and this is precisely the headache for BTC. The advantage is that the income of miners has become higher, so *maybe* after N times of halving, it will be an important income for miners. The disadvantage is that the Bitcoin ledger is enlarged (after all, a lot of extra content is added to bypass restrictions), which is not conducive to the storage of full nodes. The larger the ledger is and the fewer full nodes are, the more the blockchain looks like a consortium chain.
9.5 Does the size of the ledger really matter? The ETH ledger has always been very large. In recent years, we have become aware of this problem and have been discussing how to cut off some historical states and even historical ledgers. Bitcoin has always done better in this regard because it uses small blocks. The size of the ledger is not too large, so there are many full nodes and it is very decentralized.
10. Where should the inscription go?
Answer: Maybe it would be a good idea to proactively limit the trading volume, and cut some more on the current basis. Taproot is a new technology of Bitcoin Core, which is also intended to enable Bitcoin to implement some basic scripting functions. Ordi can use Taproot to bypass the maximum comment limit. But stuffing too many things into Bitcoin in a bypass way is not a good idea. After all, expanding from a few bytes to hundreds of bytes is hundreds of times worse. However, if we make some restrictions and grasp a certain standard, we will not cause a "tragedy of the commons". I believe that the Bitcoin core community will not be too disgusted with such digital artifacts and gadgets, and this may be a better choice.
Author of this article:
0xTodd | Nothing Research Partner
