NFTs in the Bitcoin blockchain - Ordinal Theory

[Wind_FURY]

Probably, but Bitcoin also stumbled during its early days of development too, so perhaps it couldn't truly be considered a "disaster". Other developers could also learn from it, OR if Ordinals dies, Casey Rodarmor showed that developers don't need permission to build and develop something on top of Bitcoin. He just went to work and built something.

i'm not sure i fully understand the technical issue that caused the numbering system to go wrong but the numbering system was kind of a fundamental way of identifying a particular ordinal most people probably thought of it as identifying their particular ordinal 100%. casey should have been smart enough to anticipate something like this though. if he designed it from the ground up...but i guess maybe he wasn't smart enough. and an unforeseen bug crept in. a shame they don't have a program that can catch those kinds of bugs.

From the way I understood the numbering system, it's merely something that came from Casey Rodarmor's mind saying that "based on mining sequence, these are the numbers assigned to each Satoshi, and these numbers are constant even after wallet transfers", and that's why he called it the "Ordinals Theory". It's not real, and the "system" could be changed according to Casey's whims.

Plus another good thing about Ordinals or CounterParty being built on top of Bitcoin is as long as the Bitcoin network is running, you could download a client, input your keys, and your "artifacts" of dick pics and fart sounds will still be there.

so how exactly is an ordinal identified now if not by inscription #. and are inscription #s still static or can they change with time? 

I believe not? Ordinals is a numbering scheme based on the mining sequence of each Satoshi.

[1714566042]

1714566042

[1714566042]

1714566042

[1714566042]

1714566042

[vjudeu]

I believe not? Ordinals is a numbering scheme based on the mining sequence of each Satoshi.

Well, you can create zero satoshi, and move it (doing that is non-standard, but definitely possible, and happened on mainnet, see transaction c1e0db6368a43f5589352ed44aa1ff9af33410e4a9fd9be0f6ac42d9e4117151). Then, a new Ordinal is created out of thin air, which means you can inflate Ordinal numbers "ad infinitum" if you use the old implementation. Which is somewhat compatible with UTXO model, because there are no consensus limits, when it comes to the number of UTXOs you can create.

But I wonder, what about destroying coins? Because if you have Ordinal number N, and it is zero satoshi, then you can simply destroy it by not creating any new UTXO. What will happen then? I don't know, it needs to be tested, but I can see two options:
1. That Ordinal number is destroyed, which means you can artificially insert numbers, and remove them later.
2. It stays where it is, the only thing that changes is ownership. But then, it is a very interesting question, how that ownership is changed. Is it sent to miners? If so, then people could not only own Ordinals, but "cursed Ordinals" as well, without knowing about it.

Edit: Maybe I should explain, what does it mean "not creating any new UTXO". This picture should help:

Code:

+------------------------------------+
| Alice 1.00 BTC -> Charlie 0.99 BTC |
| Bob   0.00 BTC                     |
+------------------------------------+

Then, the question is: if Bob owned some "cursed Ordinal", then who owns it after such transaction?
1. Nobody, it is permanently destroyed.
2. A miner, who mined this transaction.
3. Someone else? Charlie?

[Wind_FURY]

The network is currently congested again, but nothing has truly changed in terms of Bitcoin acceptance and adoption. How do we find out if the transactions are real, actual transactions of value/for finance instead of Ordinals transactions?

Bitcoin Stack Exchange says to,

Look for ASCII "ord" (hex 6f7264) at the appropriate offset in the second† witness component.

https://bitcoin.stackexchange.com/questions/118567/how-can-we-check-if-a-transaction-is-an-ordinal-transaction-in-the-mempool

But I'm not a very technical pleb. Haha. What I'm asking is what websites/webapps that gives/shows us transaction data from Ordinals, like perhaps a "blockchain explorer" for Ordinals transactions? Thanks!

[vjudeu]

How do we find out if the transactions are real, actual transactions of value/for finance instead of Ordinals transactions?

We don't. Why? Because there are some people, who believe that blocking Ordinals is censorship. And they started sending their real transactions, with small Ordinals, just to detect, which nodes ban them. Also, on the other side of the scale, there are people banning Taproot entirely, because it is easier for them to use some deprecated version of Bitcoin Core, than to properly remove support only for Ordinals. Which is also the reason why some of my nodes postponed some upgrades from Segwit v0 to Taproot (another reason is 02/03 prefix, which can sometimes cause weird bugs, and I have to dig deeper into it to port it correctly).

What I'm asking is what websites/webapps that gives/shows us transaction data from Ordinals, like perhaps a "blockchain explorer" for Ordinals transactions?

Any regular block explorer can give you the witness. But if you want a specific one, then read BIP for Ordinals: https://github.com/bitcoin/bips/pull/1408

Or simply visit https://ordinals.com/ that is linked there.

The network is currently congested again, but nothing has truly changed in terms of Bitcoin acceptance and adoption.

It is not surprising at all. Instead of Ordinals, we should improve commitments. Then, Silent Payments would progress much further than they did, and instead of "Ordinals explorers", we would have "scanners" that would show you a lot of things from the past, including the whole whitepaper, wrapped in a multisig, that was created in ancient times, when even OP_RETURN was not so popular as today.

But what happened instead? Guess what: there were some people on bitcointalk, who tried to push the whitepaper again in a different format, just because the old one was incompatible with Ordinals. Is it good for network congestion? Could it improve acceptance and adoption? See, what is the problem? Silent payments can improve privacy. Scanners can improve fetching data from the blockchain, if they are already there, but if their format is different than some people wanted. But no, we have partially-tested Ordinals instead.

So, what will happen now? Well, I will still take Silent Payments and Commitments path, even if it is against the majority. Because I want to improve performance, compress data, and quickly deal with some repeated patterns, even if others won't do that. But of course, as garlonicon put in his signature, releasing a production version is hard. So I wonder, which of my projects will reach "stable" state first. Because I don't want to add another half-baked network into the whole mess. As long as it is not ready, I can only talk about it in my free time (and get some feedback), and write code in my working time.

[nutildah]

What I'm asking is what websites/webapps that gives/shows us transaction data from Ordinals, like perhaps a "blockchain explorer" for Ordinals transactions? Thanks!

I've been looking at this when I want to know what is up with the current state of Ordinals:

https://dune.com/dgtl_assets/bitcoin-ordinals-analysis

You can see that there's been a resurgence in BRC-20 activity:



(ignore the box around "video", it was an unfortunate misclick)

I haven't looked into it but I bet its because some new ticker, like $POOP or something, just dropped and people are minting it... God knows why.

The vast, overwhelming majority of all inscriptions are for BRC-20 mints. What's funny is Rodarmor doesn't even like BRC-20. It's pure junk done in just about the most bloat-ful and least elegant way possible.

[stompix]

But I'm not a very technical pleb. Haha. What I'm asking is what websites/webapps that gives/shows us transaction data from Ordinals, like perhaps a "blockchain explorer" for Ordinals transactions? Thanks!

I'm using
https://ordiscan.com/inscriptions to check the newest s*** that is dumping in the mempool.
There is also ord.io, better to explore collections and individual art:
https://www.ord.io/35356901

But yeah, they've started again minting like crazy and surprisingly paying more than usual for it, it's weekend,  we're getting blocks mined faster than usual at 6% rate and still transactions are over 30sat/vb in every block.
40sat/b for...RATS!
https://mempool.space/address/bc1qqmnufsvqj4scmhp7luf5vrcw9ekr4njnvh6l3p





 

[DooMAD]

It's not sustainable.  Although idiots are plentiful in this world, there's still not an unlimited supply of them.  You can only fool people so many times before it stops working.  Sooner or later they'll run out of suckers who will buy this crap and then they'll have wasted all their money uploading garbage.

Just have patience.  It'll die down again soon enough.

[Wind_FURY]

It's not sustainable.  Although idiots are plentiful in this world, there's still not an unlimited supply of them.  You can only fool people so many times before it stops working.  Sooner or later they'll run out of suckers who will buy this crap and then they'll have wasted all their money uploading garbage.

Just have patience.  It'll die down again soon enough.

It's an inconvenience for users who want to send small amounts of Bitcoins, but I personally don't mind it anymore to be honest. They're merely using the network in a way that we don't approve of.

The protocol is working as designed and following the consensus rules, with the fee market, with the unstoppable/censorship-resistant transactions. Who are we to say that they can't use the network in the way they want?

Plus it's true, it's not sustainable AND Bitcoin has limited supply. They're wasting those precious coins.

[DooMAD]

It's an inconvenience for users who want to send small amounts of Bitcoins, but I personally don't mind it anymore to be honest. They're merely using the network in a way that we don't approve of.

The protocol is working as designed and following the consensus rules, with the fee market, with the unstoppable/censorship-resistant transactions. Who are we to say that they can't use the network in the way they want?

Absolutely.  But, the other thing they're doing, is the same thing as perpetuating the ICO grift of exploiting gullible people with empty promises of greatness and selling them crap.  It's mainly a swindle and I'd feel irresponsible if we weren't highlighting that.  They're free do do it, but it's decidedly unethical. 

They're always looking at new and novel ways of repackaging junk to sell to people who don't know any better.  Banks actually do this too.  So it's another bad habit that's been copied from the legacy financial system.

[d5000]

Totally agree with @DooMAD here. Above all, the completely dumb BRC-20 protocol is what I think what will cause many people to lose money. That's why I'd started this thread about BRC-20 some months ago - just had to revive it because bagholders and scammers seem to get hope again to get rich selling completely worthless tokens.

That token zoo ... RATS, CATS, LIONS, FOXS, BEES ... lol. Would anybody buy a token in 2024, 25 or 26 because "it was from the first BEES BRC-20 collection in 2023" ? I don't know if this zoo is part of a game or so, but it seems terribly unnecessary and, yes, scammy. (Take into account that BRC-20 are not classic NFTs with an unique graphic image stored, i.e. an artistically designed bee, or so!)

I have already written in the BRC-20 thread I linked above that I find it very "interesting" that some sites specialized in tracking BRC-20 tokens don't offer charts which are longer than a day, at most a week or so (see example at brc-20.io). So the public which accesses these sites doesn't see how much these tokens have already lost since the BRC-20 heyday in May. A couple of these tokens are listed on general sites like Coingecko and thus can be tracked over longer periods but that seems to be a small minority.

While I think that using the protocol in a way it allows it isn't unethical per se only because it's clogging the blockchain (agreeing here with @Wind_FURY), I believe it's legitimate to warn potential buyers about these practices.

[nutildah]

A look at the mempool as of about 3 hours ago demonstrating the BRC-20 takeover:



The little yellow blocks are the BRC-20 mint transactions, which occupy close to 50% of the total mempool space.

I'm using
https://ordiscan.com/inscriptions to check the newest s*** that is dumping in the mempool.

This is a great site for checking in on what's going on exactly. The minting services are making bank. I can't see how anyone else will make money... There's like 1 transfer for every 10 mints for each token on average.

[HmmMAA]

Seems that binance is responsible for the new mempool pump https://twitter.com/binance/status/1721782454305124533

[Wind_FURY]

A look at the mempool as of about 3 hours ago demonstrating the BRC-20 takeover:



The little yellow blocks are the BRC-20 mint transactions, which occupy close to 50% of the total mempool space.

I'm using
https://ordiscan.com/inscriptions to check the newest s*** that is dumping in the mempool.

This is a great site for checking in on what's going on exactly. The minting services are making bank. I can't see how anyone else will make money... There's like 1 transfer for every 10 mints for each token on average.

The demand for having their transactions first and the health of the network = VERY GOOD, but it's not the kind of usage that we're looking for. Instead of censorship-resistant, unstoppable money, we have dick pics, fart sounds, and JSON files - they call "tokens".

Plus there' another Bitcoin app that actually stores data inside actual blocks, not merely in the data structures where signatures are stored.

Bitcoin Stamps, https://github.com/mikeinspace/stamps/blob/main/BitcoinStamps.md

Storing "Art on the Blockchain" as a method of achieving permanence is often a misnomer in the NFT world. Most NFTs are merely image pointers to centralized hosting or stored on-chain in prunable witness data. We propose a method of embedding base64-formatted image data using transaction outputs in a novel fashion.

The means by which this is achieved is encoding an image's binary content to a base64 string, placing this string as a suffix to STAMP: in a transaction's description key, and then broadcasting it using the Counterparty protocol onto the Bitcoin ledger. The length of the string means that Counterparty defaults to bare multisig, thereby chunking the data into outputs rather than using the limited (and prunable) OP_RETURN. By doing so, the data is preserved in such a manner that is impossible to prune from a fullnode, preserving the data immutably forever.

[digaran]

With the current situation, having the ability to insert garbage into the blockchain, and then having greedy miners that don't care whether legitimate Bitcoin users are suffering or not from increased fees, then on top of that having different opinions about censorship etc, it seems such systems where any change is dependent on consensus is proving to be a failure, unless they wake up to see the consequences of not stopping these garbage transactions. BUT GREED, YOU KNOW?

As a normal ONLY BITCOIN user, when I see how banks/central dictators( dictators controlling central banks) are taking advantage of us, I can think of miners the same, so should we consider them to be the same only with different names? I guess Satoshi never thought about this, where ever is money, greed follows, whether it be governments, or miners.

[DooMAD]

I guess Satoshi never thought about this, where ever is money, greed follows, whether it be governments, or miners.

The way I see it, satoshi recognised that greed would exist regardless, so why not leverage that greed to provide the incentive to secure the blockchain?  It's the whole reason we have a network in the first place.  It wouldn't be possible otherwise.  Have to take the downsides with the upsides.

[HmmMAA]

With the current situation, having the ability to insert garbage into the blockchain, and then having greedy miners that don't care whether legitimate Bitcoin users are suffering or not from increased fees, then on top of that having different opinions about censorship etc, it seems such systems where any change is dependent on consensus is proving to be a failure, unless they wake up to see the consequences of not stopping these garbage transactions. BUT GREED, YOU KNOW?

As a normal ONLY BITCOIN user, when I see how banks/central dictators( dictators controlling central banks) are taking advantage of us, I can think of miners the same, so should we consider them to be the same only with different names? I guess Satoshi never thought about this, where ever is money, greed follows, whether it be governments, or miners.

The problem you mention isn't created by the design of the network but from the democratic decision to not increase the blocksize and have a fee market  . You can blame UASF if you want , it's more appropriate . If full nodes in btc made a decision to spend more money for data storage and bandwidth that problem wouldn't exist in that scale .
You use the term greedy . They are entities investing for profit , is that so strange ? And not expecting profit by just holding coins , but providing security to the network while continuously investing to stay in the game  . Isn't that the purpose of PoW ?
Satoshi thought exactly of that , how to make greed work for the whole . If community changed the rules of the game then community should take the blame .
 

[mikeywith]

With the current situation, having the ability to insert garbage into the blockchain, and then having greedy miners that don't care whether legitimate Bitcoin users are suffering or not from increased fees, then on top of that having different opinions about censorship etc, it seems such systems where any change is dependent on consensus is proving to be a failure, unless they wake up to see the consequences of not stopping these garbage transactions. BUT GREED, YOU KNOW?

As a normal ONLY BITCOIN user, when I see how banks/central dictators( dictators controlling central banks) are taking advantage of us, I can think of miners the same, so should we consider them to be the same only with different names? I guess Satoshi never thought about this, where ever is money, greed follows, whether it be governments, or miners.

"legitimate" is rather subjective, technically everyone who transacts on the blockchain is a legitimate user otherwise -- their transactions would not be approved into a block, but what I want to know is, are you upset because other people use the blockchain in a different way that you use it -- or you are upset because fees are high?

If it's the fact that fees are high, then what happens when people start to actually use BTC for everyday life? like buying coffee, tea, paying tolls, or parking tickets, which would also take fees sky high, what is the complaint going to be then? why are these jerks paying for a cup of coffee with BTC raising my fees to send BTC?

Now I'd like to make clear that I am a miner myself, but I am small fish in a big pond, in fact, I am more affected by the fees than any extra profit I could potentially make, but for those large miners why do you think they should care about anybody's feelings? mining is just a business, if someone disagrees with the the way miners handle their business -- they could start their mining operations and include only the category of transactions they want, probably for free, in other words, leave decent money on the table.

See, I am not endorsing any of these stupid NFTs, I think they are completely worthless and I wouldn't buy the most expensive NFT for 10 Sat, but the general effect of this is value being created and transferred around, do I think these guys are stupid? I do, but I can't deny the value they add to the ecosystem, so maybe instead of fighting them -- we could strive to make Bitcoin cheaper to transact for everyone.

Even if we were all to agree to block this BRC-20 transaction -- the main problem won't be solved, it would just be pushed into the future, at one point, even what you call "regular normal" users will fight over the right and wrong transactions.

[d5000]

If it's the fact that fees are high, then what happens when people start to actually use BTC for everyday life? like buying coffee, tea, paying tolls, or parking tickets, which would also take fees sky high, what is the complaint going to be then? why are these jerks paying for a cup of coffee with BTC raising my fees to send BTC?

In general terms I agree with your post, but I think there is a difference between blockchain congestion due to "everyday use" and blockchain congestion due to NFTs.

When we pay things, then we won't use Bitcoin (at least not on-chain) if the fees are higher than a certain percentage of the value transferred. For me, for example, I already think about not using BTC if the fee is higher than 2-3% of what I transfer, and prefer generally times where it's lower than 1-1,5%. This means there is a natural "cap" to the fee for "normal" transfers - and it's normally correlated to Bitcoin's market cap, because this is the total value we as a community can transfer.

However for tokens and NFTs this equation isn't the same: the NFTs or tokens can have a much higher price than the real value in BTC which is transfered. This means that: the more value residing in NFTs and tokens, the higher the potential fees of Bitcoin become, independently of Bitcoin's market cap. The potential fee is thus correlated not only to Bitcoin's, but also the market cap of all tokens and NFTs together, and in token bubbles it can rise much higher like we saw in the last months. Bitcoin is thus affected now by a similar problem than Ethereum, which suffers high fees from a long time ago.

In this thread (months ago ...) or in the other Ordinals threads I have proposed some solutions which would not be a naive "blocking" of BRC-20, for example a discount for OP_RETURN which would make it again the cheapest way to store data, but only up to a certain limit. However, for BRC-20 this would not make that much sense because in the case of BRC-20 it's not the amount of data which is problematic, but the amount of transactions (and the fact that BRC-20 transactions are more expensive already than Counterparty/Omni txes, the closest competitors, and much more expensive than for modern emergent standards like Taro/RGB/OmniBOLT). At least this would put BRC-20 in a even more unadvantageous position than OP_RETURN based standards which are more efficient with data.

I think the only long term solution is 1) increase LN adoption and 2) learn from Ethereum and introduce rollups (like Optimism) and sidechains. There are already some interesting projects like Nomic working but they are all quite centralized, but if someone manages to fork and adapt them to a decentralized standard, I'd be happy to use them.

[mikeywith]

When we pay things, then we won't use Bitcoin (at least not on-chain) if the fees are higher than a certain percentage of the value transferred.

Okay, so why not implement that concept now?

However for tokens and NFTs this equation isn't the same: the NFTs or tokens can have a much higher price than the real value in BTC which is transfered. This means that: the more value residing in NFTs and tokens, the higher the potential fees of Bitcoin become, independently of Bitcoin's market cap.

This is a perfectly valid point, when looking it zoomed-in at first glance it would give you this exact impression, but then regardless of how bad/low we think of these NFTs they are a utility that adds value to BTC in general, and the increased fees are just collateral damage, the same collateral damage that would happen when more and more people start to use BTC for "normal" transactions.

Let's think of all the collectibles in the world, the coin collectibles market is estimated to be worth over 30 billion dollars this year alone, it's all but an imaginary value created by the collectors that the rest of the world doesn't recognize, I personally don't think that some random coin which worth no more than 1 cent scrap value deserves to produce a value of $1000, but sure thing is, those collectors couldn't care less about what I think and this 30B becomes a real value injected into the economy and would benefit the economy of any country that plays a role in it.

For obvious reasons, if you want to use the mail to send a gift to your friend and the mail service happens to be limited and slow, you would have to "wait" or "outbid" those collectors, it would be pretty unrealistic to blame the mail company for it, as it is to blame those collectors and say no the mail service was not intended to be used by these folks to send worthless rusty coins.

That is why you can't really blame the miners for being greedy, besides, it also adds to the security of BTC, the more "value" transacted (regardless of what we think of that value) the more the hash power the economic of BTC can handle.

I think the only long term solution is 1) increase LN adoption and 2) learn from Ethereum and introduce rollups (like Optimism) and sidechains. There are already some interesting projects like Nomic working but they are all quite centralized, but if someone manages to fork and adapt them to a decentralized standard, I'd be happy to use them.

+1, which is why I don't think that Ordinals and BRC-20 as a concept should be "banned", but rather be used as an incentive to find new and improve current real working solutions that would solve the invadable problems that we will have to face sometime in the future anyway, I don't see that they created a brand new unknown issue -- they simply brought the same issue a little too early.

If everyone would just count on the fees to stay in the 1-2 sat range forever and don't want to contribute or even use/test other methods -- they would face the same faith regardless of the cause, be it NFTs or simply other "normal" users using the blockchain more often.

[Wind_FURY]

With the current situation, having the ability to insert garbage into the blockchain, and then having greedy miners that don't care whether legitimate Bitcoin users are suffering or not from increased fees, then on top of that having different opinions about censorship etc, it seems such systems where any change is dependent on consensus is proving to be a failure, unless they wake up to see the consequences of not stopping these garbage transactions. BUT GREED, YOU KNOW?

As a normal ONLY BITCOIN user, when I see how banks/central dictators( dictators controlling central banks) are taking advantage of us, I can think of miners the same, so should we consider them to be the same only with different names? I guess Satoshi never thought about this, where ever is money, greed follows, whether it be governments, or miners.

I believe you need to learn more about how the network actually works and what's actually making everything stick together. Pardon me, I don't want to offend you, but what actually is making the network stick together is its incentive structure. The miners are not greedy, they're merely doing their jobs because they're incentivized to. Don't post something like it's a philosophical debate because it's all merely technical. And technically, everything we see right now is, - Bitcoin is actually working as designed.

With the current situation, having the ability to insert garbage into the blockchain, and then having greedy miners that don't care whether legitimate Bitcoin users are suffering or not from increased fees, then on top of that having different opinions about censorship etc, it seems such systems where any change is dependent on consensus is proving to be a failure, unless they wake up to see the consequences of not stopping these garbage transactions. BUT GREED, YOU KNOW?

As a normal ONLY BITCOIN user, when I see how banks/central dictators( dictators controlling central banks) are taking advantage of us, I can think of miners the same, so should we consider them to be the same only with different names? I guess Satoshi never thought about this, where ever is money, greed follows, whether it be governments, or miners.

The problem you mention isn't created by the design of the network but from the democratic decision to not increase the blocksize and have a fee market  . You can blame UASF if you want , it's more appropriate . If full nodes in btc made a decision to spend more money for data storage and bandwidth that problem wouldn't exist in that scale .
You use the term greedy . They are entities investing for profit , is that so strange ? And not expecting profit by just holding coins , but providing security to the network while continuously investing to stay in the game  . Isn't that the purpose of PoW ?

Satoshi thought exactly of that , how to make greed work for the whole . If community changed the rules of the game then community should take the blame .
 

Returning to the Scaling Debate now, are we? OK, then go organize and make a proposal to hard fork to bigger blocks.

OR read this blog, https://medium.com/hackernoon/moores-observation-35f7b25e5773