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Sun 26 May 2024 7 min of reading by Nicolas T.

The circus of inscriptions (ordinals, stamps, rune, etc.) is fading, but the damage is already significant. A look back at this nuisance that ruins the decentralization of bitcoin.

Inscriptions are data (a .jpeg file for example) that squat inside bitcoin transactions.

There are, for example, inscriptions related to what is called an ordinal, that is, a unique satoshi. The term ordinal comes from the expression ordinal theory which refers to the methodology of mapping these satoshis via virtual numbering.

This numbering is used to track satoshis from one transaction to another and thus know who their owners are. This tracking is done through software completely foreign to the bitcoin protocol. Everything relies on the ordinal explorer.

In other words, the data (jpeg/inscription) is not transferred from one transaction to another, as sometimes imagined. The inscription remains linked to the same original transaction (txid) within the same block.

Two things need to be explained first:

Firstly, making a bitcoin transaction means creating a utxo. This is a piece of code (a script) that mathematically ties a quantity of bitcoins to a bitcoin address (public key).

Secondly, the mechanics of transactions rely on a computer execution language called script. It is a very simple language with a very limited number of instructions.

These instructions are called opcodes. Think of them as small digital cogs. The most fundamental is OP_CHECKSIG. This opcode verifies that the signature provided in the transaction matches the bitcoin address in question.

Inscriptions (txt files, jpegs, etc.) are inserted into utxos of type P2TR and P2WPKH. They do this using a trick involving 3 opcodes: OP_FALSE, OP_IF, and OP_PUSH.

This combination of opcodes means that nothing really executes at the time of the transaction. However, the data contained in OP_IF is preserved forever in the blockchain.

And thats it.

When you think about it, inscriptions turn transactions into casino tokens. It then just takes attracting crypto addicts to pump & dump to make this attack self-financing.

Inscriptions have turned the financial incentive against bitcoin because pools and miners are encouraged to look the other way due to the lucrative transaction fees. So much so that the argument that transaction fees rule no longer holds water.

One of the problems is that these tens of millions of inscriptions bloat the blockchain. Some will argue that this is a non-issue since ordinals can be pruned. The reason being that they reside in the witness section of transactions which lightweight nodes do not need to validate blocks.

Sure, but full nodes (Full node) are required to keep them in memory. However, there will be unpleasant surprises if the number of full nodes dwindles too much compared to lightweight nodes (pruned nodes).

Heres the explanation for English speakers:

Another even more pressing problem is related to the stamps inscription protocol.

If ordinals can be pruned via a process called pruning, this is not possible in the case of the stamps protocol.

This time the data pretends to be public keys inside multiple multisig utxos.

[A multisig utxo means that multiple public keys are used to construct it.]

This type of extremely toxic inscription is already resulting in a phenomenal explosion in the total number of utxos. They have more than doubled in just one year. There are now over 230 million.

The unexpected consequence is a monstrous increase in the time required to set up a node. The latest tests by the founder of the Ocean pool are damning:

In 2022, I could set up a node in less than 48 hours with a simple Raspberry Pi 4. Now I use a Raspberry Pi 5 with a processor twice as powerful. And despite that, the process took more than 100 hours instead of 48 hours!

The situation is much worse than before. Its a difference of several orders of magnitude. This is not FUD. The more we turn a blind eye [to inscriptions], the more we accelerate the centralization of the bitcoin network.

At this rate, it will take 24 days to install a node in just a decade

Many believe that no arbitrary data should be found in the blockchain, period.

In general, inscriptions are tolerated if done intelligently. That is, without negative impact on bitcoins decentralization. These inscriptions use an opcode specifically created for this purpose: OP_RETURN.

OP_RETURN was created in 2014 to provide an alternative to more harmful techniques for inserting arbitrary data. And by the way, stamps are just a carbon copy of the counterparty protocol which led to the creation of OP_RETURN.

OP_RETURN offers a space limited to 83 bytes per transaction, enough to enter a SHA-256 hash (32 bytes) and an identification tag. The created utxos are special in that they cannot be spent. Lightweight nodes can therefore prune them entirely.

All this to say that some troublemakers deliberately do things in the worst possible way, which speaks volumes about their true intentions. Doubling the time required to install a node in less than a year should provoke an outcry.

Faced with the troubling inaction of Bitcoin Core, your humble servant strongly recommends using the BitcoinKnots client. This implementation of the Bitcoin client stands out due to a series of bug fixes using stricter filters.

If you are a miner, direct your hash harvest to @ocean_mining. This pool, founded by Luke Dash and Jack Dorsey, mines blocks almost without inscriptions.

Dont miss our latest article on Bitcoin Cores inaction: Bitcoin Core comes out of silence.

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Bitcoin, geopolitical, economic and energy journalist.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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Bitcoin - A serious threat to decentralization - Cointribune EN