As the price of bitcoin creeps back toward $45,000, the cryptocurrency’s network is showing signs of strain. Over 260,000 unconfirmed transactions have piled up in the mempool, slowing transactions and hiking fees.
This congestion has reignited debate around a new Bitcoin innovation called ordinal inscriptions.
Keypoints
- Unconfirmed BTC transactions are rising, causing network congestion and higher fees
- Ordinal inscriptions are adding extra data to transactions, bypassing Bitcoin Core’s size limits
- Luke Dashjr calls inscriptions a “bug” and vulnerability that needs to be fixed
- Others argue inscriptions evolve Bitcoin, encourage experimentation, and benefit miners
- The debate has divided the BTC community amid the recent price rise back toward $45k
Ordinal inscriptions involve adding extra data to Bitcoin transactions by encoding information in the smallest units of BTC, called satoshis. This allows each satoshi to carry up to 4MB of data – essentially turning them into tokens similar to NFTs. The trend took off this spring through ordinal projects that sell inscribed satoshis as collectibles or ways to post messages on the blockchain.
But ordinal inscriptions have contributed to recent network delays and rising costs by cramming more data into Bitcoin’s blocks. “Inscriptions are exploiting a vulnerability in Bitcoin Core,” said prominent BTC developer Luke Dashjr this week, referring to the main Bitcoin software. He argues they bypass Bitcoin Core’s limits on transaction sizes, calling inscriptions a “bug” that needs to be fixed.
PSA: “Inscriptions” are exploiting a vulnerability in #Bitcoin Core to spam the blockchain. Bitcoin Core has, since 2013, allowed users to set a limit on the size of extra data in transactions they relay or mine (`-datacarriersize`). By obfuscating their data as program code,…
— Luke Dashjr (@LukeDashjr) December 6, 2023
However, others believe inscriptions represent important experimentation and evolution of Bitcoin’s capabilities. “Inscriptions are unstoppable,” said crypto investor Jason Fang. “This gives miners more fees and higher profits.” Developers of inscription projects argue they encourage permissionless innovation atop the base Bitcoin protocol.
The debate essentially boils down to a divide between Bitcoin purists who want to optimize space for payments, and proponents of expanding Bitcoin’s utility for things like metadata, asset tokenization and decentralized messaging. There are also disagreements about how much control or oversight developers should exert over uses of the open-source Bitcoin blockchain.
For now, inscriptions continue to spread while causing headaches for those trying to send normal BTC transactions. But planned updates to fix Bitcoin Core’s data size limits could dampen experimentation going forward. The coming months will likely see further debate among developers, miners and power Bitcoin users about the appropriate future of extensions like inscriptions.
The post Bitcoin Innovation or Exploitation? Community Debates Ordinal Inscriptions appeared first on Blockonomi.