Rare Sats and Rare Sats trading on Magisat

[quary.sats]

Part 1: Rare Sats: What are they? Do they exist?

Rare Sats! Some satoshis may be special and different from others. This is a controversial topic, as is anything related to Ordinals Theory. I'm posting this because I believe this subject is much more fun and intriguing compared to any other altcoin or token out there. I ask you to read patiently, probe my arguments if you think they're lacking, and possibly be open to a new collecting hobby.

To understand Rare Satoshis, we first need to understand Ordinals (Bitcoin NFTs). This IS NOT a post about NFTs, I promise! However, in the journey to create Bitcoin NFTs, Casey Rodarmor, the creator of ordinals.com discovered a much more interesting and intriguing asset: Rare Satoshis.

The first part of Ordinal Theory concerns itself with satoshis, giving them individual identities (ids) and allowing them to be tracked. The second part (required for Bitcoin NFTs) concerns itself with binding data posted on the Bitcoin network to satoshis through a "convention".

Let's dive into this first part! This part of the Ordinals Theory creates two "strong conventions" (I'll explain why I'm calling them "strong" in a minute):

• Satoshis are assigned IDs from 0 to 21 quadrillion in the order of their creation.
• The flow of satoshis from inputs to outputs in Bitcoin transactions is done First-In-First-Out. (sending a UTXO containing 1,000,000sats to two addresses: 500,000 to the first and 490,000 to the second, will send the first 500,000 to the first address, 490,000 to the second, and the rest of 10,000 sats to the miner's address adding the block)

As Bitcoiners, we understand that sats are simply a measuring unit for Bitcoin. By default, the Bitcoin Network has no way of identifying a particular satoshi. However, I would argue that UTXOs can be seen as sats containers, and unlike a glass of water where you have the water molecules chaotically moving through the glass, UTXOs are static and much more akin to a stack (of sats). Yes, sats are a measuring unit, but they are more similar to millimeters than to milliliters. Millimeters of material, unlike milliliters can be preserved when moved and uniquely identified. That's what Ordinals Theory does.

Let's now circle back to why I call the two conventions needed to identify sats "strong conventions", and why this part of the Ordinals Theory makes much more sense than the second. Occam's Razor is the problem-solving principle that recommends searching for explanations constructed with the smallest possible set of elements. In simpler words, this principle states: "The simplest explanation is usually the best one." This also applies to conventions. When a convention is created to aid a certain purpose (in this case identifying an tracking sats), the simplest rules are the preferable ones. In this case, both the way to assign ids(incremental, starting from 0) and the transfer rule (FIFO) for sats are the simplest ones. The fact that these conventions follow Occam's Razor principle emboldens us to believe that even with Ordinals Theory erased from the collective memory, the next attempt at identifying and tracking sats will be based on the same exact conventions that the current Ordinals Theory postulates.

Now that we understand how sats are tracked, we can dive into what makes a satoshi rare. There are multiple types of satoshis that have interesting properties. The broader classification includes:

• Satoshis interesting by virtue of their historical significance. This category includes (but not limited to): Satoshis involved in the first bitcoin transaction made in Block 9, Satoshis held by Nakamoto, Satoshis from the first 1000 blocks (vintage sats), Satoshis involved in the famous 2010 pizza transaction (pizza sats) and other
• Satoshis interesting by virtue of their block position. This category includes uncommon satoshis (first sat mined in a block), rodarmor rare satoshis (first sat in the first block after a difficulty adjustment), epic satoshi (first sat in the first block after a halving event) and more
• Satoshis interesting by virtue of their numerical appeal. This category includes palindromic satoshis, satoshis that are in the Fibonacci sequence, and more

A full list of the categories postulated until now can be found here: Magisat - Rare Sats Categories

I would argue that it makes sense to dive into this asset class because (1) it's fun, (2) they can be discovered (especially among old Bitcoin), (3) they can be "hunted" from different sources by shuffling your Bitcoin around, and (4) they can be traded. Caution is advised when trying to hunt them because this activity usually involves sending your Bitcoin to custodial actors such as Binance, in hope that you will withdraw another set of sats that are rare.

Part 2: How are Rare Sats trustlesly traded?

Transfering
UTXOs containing rare satoshis can be transferred untouched by simply making sure that the transaction that involves them as input contains an output of identical size and at an identical offset. Say I want to transfer a UTXO of 1000 sats from address A to address B without losing any of the 1000 sats. I will add the UTXO as input 0 and another UTXO that doesn't involve sats that i prefer to keep as input 1. Output 0 will have the same size as the input and go to address B, and output 1 will be the change. We do this to preserve all satoshis form our UTXO that contains rare sats and pay the fees with sats from another, less interesting UTXO.

Trading

When you want to sell rare sats in a trustless manner, you sign a PSBT (Partially Signed Bitcoin Transaction) with SIGHASH_SINGLE|ANYONECANPAY. What that means is that you agree to involve a UTXO (that contains the rare sats) in a transaction (as input) if and only if you get an output with the desired amount of BTC to a specified address. This PSBT is stored by the marketplace and is then publicly displayed as "for sale".

When the buyer decides to go for the trade, the marketplace gets the buyer to sign the other inputs of the transaction ( the full transaction is shown in the image below).

https://pbs.twimg.com/media/GC6_xd-WYAAoCzh?format=jpg

In a typical marketplace transaction, the buyer signs the transaction, sends it to the marketplace and the marketplace puts together the full Bitcoin transaction and submits it.
The necessity for padding UTXOs exists because to have the buyer receive the rare sats, while still having the input with the rare sats at the same index as the output with the payment (required so that the input UTXO with rare sats of the seller to be involved in the transaction), we need two random inputs from the buyer on positions 0 and 1, and an output with the sum of these two inputs at index 0, so the output at index 1 can be reserved for the rare sats (having the same number of sats as the input with the rare sats and going to the buyer).

Part 3: The implications of rare sats trading

One can observe that the trading of these assets has several implications in the Bitcoin Network. I'll briefly list them:

• Extra miner revenue (by isolating rare satoshis in the coinbase transaction and selling them). This already happens and can be seen in recent coinbase transactions (example)
• MEV now possible on bitcoin and the RBF flag renunciation ( more details here)
• Possible, brief spikes in network hash power around the halving block. The epic satoshi mined in April 2024 halving was sold for more than $2m

That's all! I thought this asset class might be much more interesting for Bitcoiners here than any other altcoin or on-chain image collectibles. I can see an appeal in collecting rare sats, similar to how humans collected old and special coins throughout history. The infrastructure needed for this activity is evolving and is getting better and better UI/UX. You can engage with Rare Sats by using a wallet that recognizes them (such as Xverse and trading them on marketplaces such as Magisat. Let me know your thoughts!

[Ambatman]

The flow of satoshis from inputs to outputs in Bitcoin transactions is done First-In-First-Out. (sending a UTXO containing 1,000,000sats to two addresses: 500,000 to the first and 490,000 to the second, will send the first 500,000 to the first address, 490,000 to the second, and the rest of 10,000 sats to the miner's address adding the block)

This is an Ordinal theory not a Bitcoin protocol

Bitcoin are fungible so all Sats are equal.

This is highly likely a passing Fad so I doubt it has a future not to mention rarity is speculative and hasn't been proper stated so I doubt it would be liquid.
Not to mention It was increase the number of Bitcoin scams since individuals that know little and have the money could be deceived to buy a "normal" as rare.

Yes it's fun hunting and seeing something corresponding with history, but if miners focus on rare Sat's what do you think would happen to the security of Bitcoin in the long run?

Well not a hater of development but I love development that complements not contradicts.

[quary.sats]

The flow of satoshis from inputs to outputs in Bitcoin transactions is done First-In-First-Out. (sending a UTXO containing 1,000,000sats to two addresses: 500,000 to the first and 490,000 to the second, will send the first 500,000 to the first address, 490,000 to the second, and the rest of 10,000 sats to the miner's address adding the block)

This is an Ordinal theory not a Bitcoin protocol

Bitcoin are fungible so all Sats are equal.

This is highly likely a passing Fad so I doubt it has a future not to mention rarity is speculative and hasn't been proper stated so I doubt it would be liquid.
Not to mention It was increase the number of Bitcoin scams since individuals that know little and have the money could be deceived to buy a "normal" as rare.

Yes it's fun hunting and seeing something corresponding with history, but if miners focus on rare Sat's what do you think would happen to the security of Bitcoin in the long run?

Well not a hater of development but I love development that complements not contradicts.

I did mention that Bitcoin is intended to be fungible. Yes, this is based on Ordinals Theory. I did post some arguments for which i think the consensus for sat identification and transferring rules is a strong one.

I believe out of all “assets” born from ordinals theory this class is by far the best and with long term potential.
If by network security issues you are referring to the incentive to reorder blocks, i think those are already out there with some other use cases. Bitcoin is not that fragile. People thought that the network will have reordering of tens of blocks when the epic sat minted (which sold for 2.1m$), but in fact there wasn’t any reordering.

Moreover, I suspect that DeFi on Bitcoin would be beneficial long-term when the block rewards will decrease significantly. They introduce some level of MEV, and thus extra incentives for the miners (aside from the extra incentives from rare sats sequestration)

[Strongs]

Maybe we can say that it's really different case, but the point is that SBF really did bad things, as compare to the Tornado cash developer who just faciliates everything and keep the basic tenant of being in crypto, that is being anonymous.

[strawman617]

The flow of satoshis from inputs to outputs in Bitcoin transactions is done First-In-First-Out. (sending a UTXO containing 1,000,000sats to two addresses: 500,000 to the first and 490,000 to the second, will send the first 500,000 to the first address, 490,000 to the second, and the rest of 10,000 sats to the miner's address adding the block)

This is an Ordinal theory not a Bitcoin protocol

Bitcoin are fungible so all Sats are equal.

This is highly likely a passing Fad so I doubt it has a future not to mention rarity is speculative and hasn't been proper stated so I doubt it would be liquid.
Not to mention It was increase the number of Bitcoin scams since individuals that know little and have the money could be deceived to buy a "normal" as rare.

Yes it's fun hunting and seeing something corresponding with history, but if miners focus on rare Sat's what do you think would happen to the security of Bitcoin in the long run?

Well not a hater of development but I love development that complements not contradicts.

I hear your points and absolutely agree with miners' focus on rare sats related to security. The asset class if we want to call it that, is so brand new that it's another part of the ecosystem to be built out.

I equate a Nakamoto-mined satoshi (since we're measuring BTC in satoshis now) to a PSA 10 Michael Jordan rookie card.

So my thought process on them is simple: if there are more rare collectible Bitcoins in circulation- I want to own some of the rare BTC.

I don't think we see a full narrative play out for some time (net long in years for rare SATs IMO). Taproot Witches is indeed a great example of a use case behind them. I suppose it would be a matter of continuing to build out the ecosystem more.

Also, BTC DeFi is really what seemed to be wanted in the first place in a roundabout way from the original WP of Bitcoin—decentralized finance.

This will be an interesting narrative to watch unfold. Glad to be a part of it. Curious to hear what some other OG opinions are on rare SATs.

[pooya87]

To understand Rare Satoshis, we first need to understand Ordinals (Bitcoin NFTs). This IS NOT a post about NFTs, I promise! However, in the journey to create Bitcoin NFTs, Casey Rodarmor, the creator of ordinals.com discovered a much more interesting and intriguing asset: Rare Satoshis.

When you start your topic with a false statement, it discourages the reader from continuing reading the rest.
There is no such thing as Bitcoin NFT because Bitcoin is not a token creation platform and it is impossible to create any kind of token using the bitcoin smart contracts.
Ordinals is also not part of the Bitcoin protocol which means you are talking about an exploit in the consensus rules that allows people to inject an arbitrary data into the chain. Then on another completely centralized platform that has nothing to do with Bitcoin they call that arbitrary data an "NFT" and scam people by selling it to them!

Now that we understand how sats are tracked, we can dive into what makes a satoshi rare. There are multiple types of satoshis that have interesting properties. The broader classification includes:

These are all arbitrary and meaningless. Of course you can come up with any crazy classification like calling any coin in a transaction with ID that starts with 0x101 to be rare! That's your choice and if you can get some newbies to follow that arbitrary classification, you get yourself a community that can also be exploited to make money by selling such coins to them at a higher price!
None of it can be called "token" or "tracking sats" though.

Transfering
UTXOs containing rare satoshis can be transferred untouched by simply making sure that the transaction that involves them as input contains an output of identical size and at an identical offset.

Not surprising at all that the rules for transferring is also arbitrary and mostly technobabble to look like rules. The moment you spend a UTXO it stops adhering to the arbitrary classification above and stops being "rare"!

Extra miner revenue

Any of the previous spam attacks on Bitcoin Network has caused similar fee spikes making it difficult for people to use bitcoin and at the same time increase the miner revenue due to the high fees the attackers pay.
It is not new: https://bitcointalk.org/index.php?topic=1776143.0

epic-sat-mined-bitcoin-halving-block-sells-two-million

In other words some idiot who had no understanding of Bitcoin paid a lot of money for garbage!
Such exploits/scams are also not new.

[quary.sats]

To understand Rare Satoshis, we first need to understand Ordinals (Bitcoin NFTs). This IS NOT a post about NFTs, I promise! However, in the journey to create Bitcoin NFTs, Casey Rodarmor, the creator of ordinals.com discovered a much more interesting and intriguing asset: Rare Satoshis.

When you start your topic with a false statement, it discourages the reader from continuing reading the rest.
There is no such thing as Bitcoin NFT because Bitcoin is not a token creation platform and it is impossible to create any kind of token using the bitcoin smart contracts.
Ordinals is also not part of the Bitcoin protocol which means you are talking about an exploit in the consensus rules that allows people to inject an arbitrary data into the chain. Then on another completely centralized platform that has nothing to do with Bitcoin they call that arbitrary data an "NFT" and scam people by selling it to them!

Now that we understand how sats are tracked, we can dive into what makes a satoshi rare. There are multiple types of satoshis that have interesting properties. The broader classification includes:

These are all arbitrary and meaningless. Of course you can come up with any crazy classification like calling any coin in a transaction with ID that starts with 0x101 to be rare! That's your choice and if you can get some newbies to follow that arbitrary classification, you get yourself a community that can also be exploited to make money by selling such coins to them at a higher price!
None of it can be called "token" or "tracking sats" though.

Transfering
UTXOs containing rare satoshis can be transferred untouched by simply making sure that the transaction that involves them as input contains an output of identical size and at an identical offset.

Not surprising at all that the rules for transferring is also arbitrary and mostly technobabble to look like rules. The moment you spend a UTXO it stops adhering to the arbitrary classification above and stops being "rare"!

Extra miner revenue

Any of the previous spam attacks on Bitcoin Network has caused similar fee spikes making it difficult for people to use bitcoin and at the same time increase the miner revenue due to the high fees the attackers pay.
It is not new: https://bitcointalk.org/index.php?topic=1776143.0

epic-sat-mined-bitcoin-halving-block-sells-two-million

In other words some idiot who had no understanding of Bitcoin paid a lot of money for garbage!
Such exploits/scams are also not new.

To understand Rare Satoshis, we first need to understand Ordinals (Bitcoin NFTs). This IS NOT a post about NFTs, I promise! However, in the journey to create Bitcoin NFTs, Casey Rodarmor, the creator of ordinals.com discovered a much more interesting and intriguing asset: Rare Satoshis.

When you start your topic with a false statement, it discourages the reader from continuing reading the rest.
There is no such thing as Bitcoin NFT because Bitcoin is not a token creation platform and it is impossible to create any kind of token using the bitcoin smart contracts.
Ordinals is also not part of the Bitcoin protocol which means you are talking about an exploit in the consensus rules that allows people to inject an arbitrary data into the chain. Then on another completely centralized platform that has nothing to do with Bitcoin they call that arbitrary data an "NFT" and scam people by selling it to them!

Now that we understand how sats are tracked, we can dive into what makes a satoshi rare. There are multiple types of satoshis that have interesting properties. The broader classification includes:

These are all arbitrary and meaningless. Of course you can come up with any crazy classification like calling any coin in a transaction with ID that starts with 0x101 to be rare! That's your choice and if you can get some newbies to follow that arbitrary classification, you get yourself a community that can also be exploited to make money by selling such coins to them at a higher price!
None of it can be called "token" or "tracking sats" though.

Transfering
UTXOs containing rare satoshis can be transferred untouched by simply making sure that the transaction that involves them as input contains an output of identical size and at an identical offset.

Not surprising at all that the rules for transferring is also arbitrary and mostly technobabble to look like rules. The moment you spend a UTXO it stops adhering to the arbitrary classification above and stops being "rare"!

Extra miner revenue

Any of the previous spam attacks on Bitcoin Network has caused similar fee spikes making it difficult for people to use bitcoin and at the same time increase the miner revenue due to the high fees the attackers pay.
It is not new: https://bitcointalk.org/index.php?topic=1776143.0

epic-sat-mined-bitcoin-halving-block-sells-two-million

In other words, some idiot who had no understanding of Bitcoin paid a lot of money for garbage!
Such exploits/scams are also not new.

1. Thank you for taking the time to read and answer

2. There are sufficient people who are trading Bitcoin NFTs. We can safely say they exist (even if you deem Ordinals Theory a "scam") in their current shape or form, which is up to you to decide if it's worth anything. You can't just hate a concept into non-existence 

3. The consensus required for tracking sats is not entirely arbitrary. That's the main takeaway from the post imo. If you ask someone who doesn't know anything about Ordinals Theory to track sats (for whatever reason), they will come up with the same rules. I argue that because of this the tracking is not entirely arbitrary. I can agree that the consensus required to bind the injected data to a satoshi is arbitrary, but I believe I make a good argument for the tracking itself not being arbitrary (which you haven't tackled; you just called it arbitrary). My post is about rare sats, and rare sats do not need any arbitrary data bound to them to be deemed "rare sats".

4. How will Bitcoin scale if it can't handle a few tens of thousands trading their "fake tokens"? The same high fees would be produced by people using Bitcoin on mass for everyday transactions. What then? We'll shout at people that they're just transferring low amounts of Bitcoin and thus should burden their network with their insignificant transactions? All Bitcoin transactions are the same: be it a "fake token" buy or a Bitcoin transfer, or whatever. For people who can't afford to transfer their btc because of high fees, we have lightning.

5. Calling someone an idiot because of their "taste" in choosing what to collect is straight-up wrong. I hope you realize this is a double standard, especially because of how Bitcoiners were regarded in the early days. The same was said about "idiots" who don't understand the economy that were buying these "worthless digital coin". It's fine to be conservative and not engage with new things. It's not fine to call those who do idiots. It's all a cycle. 10 years ago you were the idiot for buying Bitcoin, nowadays that guy is the idiot for buying a rare satoshi. Only time will tell who's an "idiot" and who's not. I believe that for the arguments stated above, rare sats are a much better asset than everything else in crypto aside from Bitcoin itself (also they don't involve any data-injection onchain /aka "spam attack").

[pooya87]

2. There are sufficient people who are trading Bitcoin NFTs. We can safely say they exist (even if you deem Ordinals Theory a "scam") in their current shape or form, which is up to you to decide if it's worth anything. You can't just hate a concept into non-existence 

There is no such thing as a Bitcoin NFT because there is no such thing in the protocol. Their existence has nothing to do with whether people trade them or not.

For example my previous post here "msg64579198" also can be tracked since it has a number attached to it and you can call it a NFT and pay me a million dollars for it. That doesn't make it into a NFT though. It also doesn't prevent me from deleting that post because it is centralized and I control its existence.
Why? Because bitcointalk is not a token creation platform and my post was not a smart contract that is being executed in a decentralized platform.

The same with what you refer to as "Bitcoin NFTs". They are literally treated as arbitrary data by the Bitcoin protocol. There is no script. There is no smart contract. There is no verification. Just arbitrary data.

If you ask someone who doesn't know anything about Ordinals Theory to track sats (for whatever reason), they will come up with the same rules.

And none of it is part of the Bitcoin protocol hence they are all arbitrary in Bitcoin world. Worst of all is that none of those rules were created nor can they change in a decentralized way. It is all centralized.

4. How will Bitcoin scale if it can't handle a few tens of thousands trading their "fake tokens"? The same high fees would be produced by people using Bitcoin on mass for everyday transactions. What then? We'll shout at people that they're just transferring low amounts of Bitcoin and thus should burden their network with their insignificant transactions? All Bitcoin transactions are the same: be it a "fake token" buy or a Bitcoin transfer, or whatever. For people who can't afford to transfer their btc because of high fees, we have lightning.

First of all lets be clear about what is happening here. People found an exploit in the protocol and have been abusing it to inject arbitrary data into the chain. To put simply people are using the decentralized ledger of a payment system as a cloud storage which is the definition of abuse.
Secondly your arguments regarding bitcoin's scaling issues is not a justification for this abuse. One of Bitcoin's shortcomings is its scaling issues, but that doesn't mean people should abuse the protocol and turn it into a cloud storage.

5. Calling someone an idiot because of their "taste" in choosing what to collect is straight-up wrong.

I already explained why they are idiots at the beginning of this post. That's because they think they are trading a token while what they are trading is not a token at all.
Bitcoin is not the ethereum (or other similar) platform(s) that you can create a token on.

[BlackHatCoiner]

The same with what you refer to as "Bitcoin NFTs". They are literally treated as arbitrary data by the Bitcoin protocol. There is no script. There is no smart contract. There is no verification. Just arbitrary data.

Arbitrary data and bought notion, both of which are enough to classify something as a token. The Bitcoin protocol does not understand anything beyond the currency BTC, but it is very possible for me to invent a concept, such as Proof-of-Burn, and invite people to buy this concept. Money is an idea, and tokens are mere abstractions of money.

However, I do agree that all of these non-fungible concepts are shallow and completely driven by speculation.

[nakamura12]

Actually, rare sats doesn't exist at all. The reason why there's something called rare sats is because of those people who start it and other people now also believe that there's a rare sats being traded. For example, sats from the btc paid by buying pizza can be called rare sats so that's why many people would say that all sats are equal and also there's no bitcoin protocol about rare sats. There is no Bitcoin NFT at all and I think you mean Bitcoin ETF.

[franky1]

the notion of rare sats and counting sats is wrongly applied by Rodarmor

firstly imagine that you have a new block of 10 coins
oooooooooo
now imagine you want to decide to give some change to different people
and you know when spending that amount you will be charged a fee (call it 2 coin of 10)
(oo)oooooooo

so REAL economics is that you tell the system whom you assign the change to after the fee is deducted first
sooo, knowing upfront how much fee(2coin) is not counted in the change(8 coin) you tell the system this about how much the destinations get of the remainder

i want dave to have 4 coin and ill have 4 coin
(oo)oooooooo        
()=fee
yep. the "first sats" go back into being a fee which goes back into mining rewards.. and the remainder(change) is split over 2 destinations
so the counting of sats via "Rodarmor theory" is not as people think, because the transaction value first takes the fee away and then gives change out to destinations

and before anyone tries to say the economics is different EG "Rodarmor theory" that in a 1in 2out tx the second out is always the "change" thus the first sat goes to the first out, and then fee is deducted after(facepalm).
this is not a true economic rule nor a rule at all.. some people can set how much of the change they want back themselves first and then pay out to someone else an amount secondary

so the real economic rule is the fee comes first and then both destinations get the remainder(change).. thus first sats go into the fee
.. but then again in the silly markets of idiots buying fluff.. who cares about math and economics of how things actually work

[quary.sats]

the notion of rare sats and counting sats is wrongly applied by Rodarmor

firstly imagine that you have a new block of 10 coins
oooooooooo
now imagine you want to decide to give some change to different people
and you know when spending that amount you will be charged a fee (call it 2 coin of 10)
(oo)oooooooo

so REAL economics is that you tell the system whom you assign the change to after the fee is deducted first
sooo, knowing upfront how much fee(2coin) is not counted in the change(8 coin) you tell the system this about how much the destinations get of the remainder

i want dave to have 4 coin and ill have 4 coin
(oo)oooooooo        
()=fee
yep. the "first sats" go back into being a fee which goes back into mining rewards.. and the remainder(change) is split over 2 destinations
so the counting of sats via "Rodarmor theory" is not as people think, because the transaction value first takes the fee away and then gives change out to destinations

and before anyone tries to say the economics is different EG "Rodarmor theory" that in a 1in 2out tx the second out is always the "change" thus the first sat goes to the first out, and then fee is deducted after(facepalm).
this is not a true economic rule nor a rule at all.. some people can set how much of the change they want back themselves first and then pay out to someone else an amount secondary

so the real economic rule is the fee comes first and then both destinations get the remainder(change).. thus first sats go into the fee
.. but then again in the silly markets of idiots buying fluff.. who cares about math and economics of how things actually work

This is the first intelligent issue raised by someone in this forum. I commend you for actually sitting down and attempting to find a flaw in the system, and not shouting and crying about "nfts" when the post is about rare sats.

I believe that putting the fee last is the first arguably arbitrary convention. I wouldn't necessarily make the economic argument. Maybe it makes more sense to have the first sats flow into the fee because the coinbase transaction that pays the miner is the first one in the "to-be-confirmed" block. One could also argue that the fee is simply the remainder of the amount in the inputs minus the amount in the outputs (which it is) and that's why you pay the fee last because you need to have a set amount for the outputs to calculate the fees. There are arguments for both arrangements, that's why I agree with you that this may be indeed the single arbitrary consensus about rare sats.

[quary.sats]

2. There are sufficient people who are trading Bitcoin NFTs. We can safely say they exist (even if you deem Ordinals Theory a "scam") in their current shape or form, which is up to you to decide if it's worth anything. You can't just hate a concept into non-existence 

There is no such thing as a Bitcoin NFT because there is no such thing in the protocol. Their existence has nothing to do with whether people trade them or not.

For example my previous post here "msg64579198" also can be tracked since it has a number attached to it and you can call it a NFT and pay me a million dollars for it. That doesn't make it into a NFT though. It also doesn't prevent me from deleting that post because it is centralized and I control its existence.
Why? Because bitcointalk is not a token creation platform and my post was not a smart contract that is being executed in a decentralized platform.

The same with what you refer to as "Bitcoin NFTs". They are literally treated as arbitrary data by the Bitcoin protocol. There is no script. There is no smart contract. There is no verification. Just arbitrary data.

If you ask someone who doesn't know anything about Ordinals Theory to track sats (for whatever reason), they will come up with the same rules.

And none of it is part of the Bitcoin protocol hence they are all arbitrary in Bitcoin world. Worst of all is that none of those rules were created nor can they change in a decentralized way. It is all centralized.

4. How will Bitcoin scale if it can't handle a few tens of thousands trading their "fake tokens"? The same high fees would be produced by people using Bitcoin on mass for everyday transactions. What then? We'll shout at people that they're just transferring low amounts of Bitcoin and thus should burden their network with their insignificant transactions? All Bitcoin transactions are the same: be it a "fake token" buy or a Bitcoin transfer, or whatever. For people who can't afford to transfer their btc because of high fees, we have lightning.

First of all lets be clear about what is happening here. People found an exploit in the protocol and have been abusing it to inject arbitrary data into the chain. To put simply people are using the decentralized ledger of a payment system as a cloud storage which is the definition of abuse.
Secondly your arguments regarding bitcoin's scaling issues is not a justification for this abuse. One of Bitcoin's shortcomings is its scaling issues, but that doesn't mean people should abuse the protocol and turn it into a cloud storage.

5. Calling someone an idiot because of their "taste" in choosing what to collect is straight-up wrong.

I already explained why they are idiots at the beginning of this post. That's because they think they are trading a token while what they are trading is not a token at all.
Bitcoin is not the ethereum (or other similar) platform(s) that you can create a token on.

You're deviating from the subject of the post. I didn't talk that much about "Bitcoin NFTs". It seems to me at this point that you're just venting your personal issues with Bitcoin Inscriptions, which is fine, but the arbitrary assignment of data to certain sats is not required for rare sats to exist.

Anyway, to address some of your points:

1. Marketplaces and services that engage with ordinals all run their own instance of the indexer. If Rodarmor decides to do an update on the git which isn't liked by the market, the services will just keep running the old version. While that's not a very strong degree of decentralization, it isn't centralized. When Bitcoin had 100 nodes it wasn't very decentralized either (not trying to compare the two, but trying to emphasize that the Ordinals protocol can get a higher degree of decentralization in the future). I don't understand how the analogy with your message is valid, as the data stays on Bitcoin. If you're referring to the consensus that creates the "pointer" might change, refer to my previous phrase. I'd argue it can't be changed now because the market wouldn't agree and run its own fork of the indexer with unchanged pointers.

2. "They are all arbitrary in the Bitcoin world". Yeah, but we're not living in the "Bitcoin world" are we? There can be another market consensus outside Bitcoin. I already explained why the consensus needed for "rare sats" (not for Bitcoin NFTs) is not really arbitrary. Please refer to that.

3. UTXOs are not "rare". Sats can be rare. UTXOs, as you already kindly mentioned, are spent and that's the end of their lifespan. Sats can be considered to flow from inputs to outputs according to "not-so-arbitrary" rules as stated in my post.

4. Using Bitcoin as cloud storage may have advantages (if you're not obtuse and change-averse and you can cherry-pick the good use-cases). I've joined a twitter space with Julian Assange's brother and other laser-eyes maxis who started an initiative based on Ordinals Theory to post the Afghan Logs on the Bitcoin chain, proving that Bitcoin (if you're willing to pay) can also act as a censorship-free publication network. They didn't leverage the "pointer" consensus, as it didn't matter who "owned" the Afghan Logs, but they did try to open the eyes of the people that Bitcoin could have this use-case as well. Wouldn't it have been simpler for Snowden to simply publish the documents onchain if Ordinals Theory was a thing back then? If you refuse the exploration of anything new, you wind up exactly as the old-school economists who dismissed Bitcoin as a fad. Nobody is trying to convince you to trade NFTs on Bitcoin or to acknowledge their existence. You could, however, attempt to derive some usefulness from the "exploit" you're so unhappy about. I argue that objectively positive use cases can arise.

5. Nobody believed they were trading a "token". They bought a sat governed by the rules explained above, which is not a token or NFT.

[franky1]

This is the first intelligent issue raised by someone in this forum. I commend you for actually sitting down and attempting to find a flaw in the system, and not shouting and crying about "nfts" when the post is about rare sats.

I believe that putting the fee last is the first arguably arbitrary convention. I wouldn't necessarily make the economic argument. Maybe it makes more sense to have the first sats flow into the fee because the coinbase transaction that pays the miner is the first one in the "to-be-confirmed" block. One could also argue that the fee is simply the remainder of the amount in the inputs minus the amount in the outputs (which it is) and that's why you pay the fee last because you need to have a set amount for the outputs to calculate the fees. There are arguments for both arrangements, that's why I agree with you that this may be indeed the single arbitrary consensus about rare sats.

yep that too also proves fee goes first

but to emphasis the economics in short form

the fee is not part of the change and deducted last

its like bank notes.. the fee is in the UTXO being spent.. the bank note being given to cashier.. the cashier takes/destroys the ownership of the bank note from the customer source. accepts the fee as adequate cost of the service, and then as a last event gives the remainder change to the destined customers who ask for the change to be split up as nickels to dave and dimes to the customer

the destined customers dont get their amounts until AFTER the mining pool has done its job(confirming tx, taking fee)

the fee then does not separate from the change and go back to the payment system after paying the destined recipients, as it has already been accounted for and deducted originally from the source payment. not after the change
(the fee comes out of the utxo being spent, not the change being delivered)

[DenBlad]

The economics of the REAL world does not apply to rare sats even if Casey's theory is wrong or right.

Let's focus in on the topic here:
The Rarity of specific Satoshis (Sats) of 1.0 Bitcoin. Before I dive into that, let's go to the beginning of Bitcoin in 2009. It was not created with a block explorer. Why did Satoshi not create a block explorer from Day Number 1?  What conversation did they have to determine a block explorer was required? How many people were interested in block explorers? A block explorer was eventually born to tag and identify transactions without depending on the Core Software.  

• A "block explorer" was created to help users find information easily about specific blocks and transactions.
• A "rare sat indexer" was created to help identify and tag specific rare sats like Satoshi's Block 9 and Hal Finney's Block 78.

If you're a Bitcoin fan and you believe in it long term, you appreciate what these Two Legends gave us, and you want to own a piece of history by owning a piece of Satoshi or Hal's sats, would you not?

[quary.sats]

Hal Finney understood that there could be extra historical value derived from Bitcoin.

https://bitcointalk.org/index.php?topic=132008.msg1416027#msg1416027

[mevsmyself]

This is why I like to think of Rare Sats as Collectible Coins.  Although different, as Sats do not have misprints,  made from different materials,  removed from circulation, or uncirculated.  Rare sats have different qualities that make them rare and collectible. Pure unmolested sats that have a historical significance.
Like it or not that is fine, but do not be confused, these are not NFT’s or ORDINALS. 

The ordinal software filters the data on the blockchain and groups the Rare Sats into a UTXO on their own to make them easier to trade.  They are traded in a BTC ordinal wallet to keep them safe and protected from being used as fees, or gas.

There are some DEVS that made NFT’s with rare sats, but that is a very small percentage.  In my opinion I do not buy those.  I pass on a rare sat bag that has someones inscription or image added to it.  I like the purest UTXO with only rare sats on them.

But I agree keep the topic to Rare Sats and not NFT’s.  They are not NFT’s or ORDINALS. 

The more we talk about this the better people will understand what they are.  Yes they are sold on NFT sites but there has to be a marketplace somewhere.  If you do not like trading on NFT marketplaces then this isn’t for you.  An NFT marketplace is just a DEX or CEX with a different function.  It is no more risky that trading BTC on a DEX or CEX.  Do your homework, do not trade on a scam site YES, but NFT or FT exchange all have scam sites.

[mevsmyself]

The flow of satoshis from inputs to outputs in Bitcoin transactions is done First-In-First-Out. (sending a UTXO containing 1,000,000sats to two addresses: 500,000 to the first and 490,000 to the second, will send the first 500,000 to the first address, 490,000 to the second, and the rest of 10,000 sats to the miner's address adding the block)

This is an Ordinal theory not a Bitcoin protocol

Bitcoin are fungible so all Sats are equal.

This is highly likely a passing Fad so I doubt it has a future not to mention rarity is speculative and hasn't been proper stated so I doubt it would be liquid.
Not to mention It was increase the number of Bitcoin scams since individuals that know little and have the money could be deceived to buy a "normal" as rare.

Yes it's fun hunting and seeing something corresponding with history, but if miners focus on rare Sat's what do you think would happen to the security of Bitcoin in the long run?

Well not a hater of development but I love development that complements not contradicts.

JUST FYI to all:  Every satoshi has its own unique name, number, and place in the blockchain.  It also has a history of where it has been.  These are all attributes that can be used to make something collectible. These factors can lead to extreme rarity whether you agree or not.  Those are facts.  Whether it catches on is another question.

Also all of this satoshi data can be looked up and verified all the way to the final satoshi that will ever be mined.  The data has already been created all the way up to the final sat that will be mined.

[Hispo]

...
JUST FYI to all:  Every satoshi has its own unique name, number, and place in the blockchain.  It also has a history of where it has been.  These are all attributes that can be used to make something collectible. These factors can lead to extreme rarity whether you agree or not.  Those are facts.  Whether it catches on is another question.

Also all of this satoshi data can be looked up and verified all the way to the final satoshi that will ever be mined.  The data has already been created all the way up to the final sat that will be mined.

At this point I am already tired of people trying to especulate with NFTs and "collectibles" within the main chain of Bitcoin, when in the first place this project was never supposed to be used to collecting anything.

Bitcoin is a decentralized peer to peer network for payments, that's all, anything that goes beyond the white paper of Bitcoin is outside of the scope of what Satoshi wanted, in my opinion.

If some developers want to create their own market, ecosystem and collectibles, then they are more than welcome to do so in other Blockchains which are better suited to do so and with people willing to accept easily some congestion in their mempools (or having more scalability, whatever fits better). I am personally not going to treat in a different way Satoshis I have, because the Bitcoin network does not.

[DenBlad]

Care to share your opinion related to my post?

Satoshi wanted to see purchases done with Bitcoin. He did not ever specify on or off chain or any specific restrictions in correlation to the use cases. He created the protocol, and if further developments brought us to this point, then this is where we are now. Take a peak at my post relating to rare sat indexers similar to how we use block explorers today?

...
JUST FYI to all:  Every satoshi has its own unique name, number, and place in the blockchain.  It also has a history of where it has been.  These are all attributes that can be used to make something collectible. These factors can lead to extreme rarity whether you agree or not.  Those are facts.  Whether it catches on is another question.

Also all of this satoshi data can be looked up and verified all the way to the final satoshi that will ever be mined.  The data has already been created all the way up to the final sat that will be mined.

At this point I am already tired of people trying to especulate with NFTs and "collectibles" within the main chain of Bitcoin, when in the first place this project was never supposed to be used to collecting anything.

Bitcoin is a decentralized peer to peer network for payments, that's all, anything that goes beyond the white paper of Bitcoin is outside of the scope of what Satoshi wanted, in my opinion.

If some developers want to create their own market, ecosystem and collectibles, then they are more than welcome to do so in other Blockchains which are better suited to do so and with people willing to accept easily some congestion in their mempools (or having more scalability, whatever fits better). I am personally not going to treat in a different way Satoshis I have, because the Bitcoin network does not.

The economics of the REAL world does not apply to rare sats even if Casey's theory is wrong or right.

Let's focus in on the topic here:
The Rarity of specific Satoshis (Sats) of 1.0 Bitcoin. Before I dive into that, let's go to the beginning of Bitcoin in 2009. It was not created with a block explorer. Why did Satoshi not create a block explorer from Day Number 1?  What conversation did they have to determine a block explorer was required? How many people were interested in block explorers? A block explorer was eventually born to tag and identify transactions without depending on the Core Software.  

• A "block explorer" was created to help users find information easily about specific blocks and transactions.
• A "rare sat indexer" was created to help identify and tag specific sats. For example, Satoshi's block 9 and Hal's Block 78.

If you're a Bitcoin fan and you believe in it long term, you appreciate what these Two Legends gave us, and you want to own a piece of history by owning a piece of Satoshi or Hal's sats, would you not?