"non-financial" transactions

[alani123]

I just stumbled upon this website page:

https://thebitcoinportal.com/live/spam/overview

Supposedly they're trying to quantify what percentage of all bitcoin transactions are not made with the explicit intention of transacting BTC. For example an ordinal transaction is made with the intent of inscribing on the Blockchain rather than simply getting BTC from one address to another.


But I think the website authors are counting all transactions including OP_RETURN as "non-financial".
Does that make sense? Please explain your thought process if you could.
I'm just trying to understand

[cryptoaddictchie]

Supposedly they're trying to quantify what percentage of all bitcoin transactions are not made with the explicit intention of transacting BTC. For example an ordinal transaction is made with the intent of inscribing on the Blockchain rather than simply getting BTC from one address to another.

I think both cause he labeled the financial and non financial on his graph. The financial probably refers to the normal data like sending btc and its movement like payments or withdrawals from exchanges. While the non financial are those like what you explained ordinal inscription and maybe other stuff like metadata or messages.

But I think the website authors are counting all transactions including OP_RETURN as "non-financial".
Does that make sense? Please explain your thought process if you could.
I'm just trying to understand

Regarding that OP return is the highest in the graph means all non financial are labeled in that because its doesnt really related to the mivement of bitcoin since these are data like messaging, indexes or probably little data such as timestamp.

Its really a nice experiment on the author sides. But since its his study we cant say his wrong but someone with tech background with bitcoin metadata can definitely disagree with it if found some flaws or inconsistency especially its published on a website.

[Upgrade00]

But I think the website authors are counting all transactions including OP_RETURN as "non-financial".
Does that make sense? Please explain your thought process if you could.

OP_RETURN outputs are probably unspendable, so it makes sense to classify all transactions under that as non financial. It's meant as a way of storing data on the chain while allowing nodes to safely ignore it and prune it out since any coins involved are effectively burned.

I'll like to know their break down of what "other data" is classified as non financial besides the 3 mentioned in the graph. I can't see any information on that on the website.

[alani123]

So is it really safe to say that around half of the bitcoin transactions on chain are for non financial purposes right now as this website shows? This isn't the result of hyperbole of at the very least subjective categorization?

[BattleDog]

OP_RETURN being classified as non-financial makes sense most of the time because it is literally used to attach arbitrary data and the output is provably unspendable. Nobody is receiving spendable BTC from the OP_RETURN output itself, but that still doesn't mean the entire transaction had zero financial component. It still has inputs, fees, maybe change outputs, and sometimes other spendable outputs too.

So yes, the category can be useful, but I'd call it subjective. The safer wording is "about half of recent transaction size / blockspace was classified as non-financial by this website," not "half of Bitcoin transactions are non-financial."

[DaveF]

To make an even better point there is no such thing as a  "non-financial" transaction on BTC.
Miners don't work for free.
Someone PAID a TX fee to have that transaction mined.

Everything else is fear mongering / deliberate misinformation from people supporting censoring transactions.

-Dave

[alani123]

To make an even better point there is no such thing as a  "non-financial" transaction on BTC.
Miners don't work for free.
Someone PAID a TX fee to have that transaction mined.

Everything else is fear mongering / deliberate misinformation from people supporting censoring transactions.

-Dave

But honestly what's the incentive right now for upwards of 50% of all BTC transactions right now to be like this?
The ordinals trend is dying and has lost almost all steam..
So what is it this time? What type of transactions are these?

[Smartprofit]

To make an even better point there is no such thing as a  "non-financial" transaction on BTC.
Miners don't work for free.
Someone PAID a TX fee to have that transaction mined.

Everything else is fear mongering / deliberate misinformation from people supporting censoring transactions.

-Dave

But honestly what's the incentive right now for upwards of 50% of all BTC transactions right now to be like this?
The ordinals trend is dying and has lost almost all steam..
So what is it this time? What type of transactions are these?

It's possible these are traces of the Runes protocol (the transfer of meme coins and tokenized assets on the Bitcoin network). These assets are traded by both bots and humans. This explains why there are so many of these transactions.🙋

I'd prefer a different answer: that these are traces of L2 protocols like Bitlayer or Babylon. But that's most likely not the case. Most likely, the Bitcoin blockchain is "littered" with new meme coins. On the other hand, this is a source of income for miners in the form of fees. And everything that's good for miners is good for Bitcoin.💁

[alani123]

I'm looking at ordiscan:
https://ordiscan.com/blocks

It shows both ordinals and BRC transactions afaik

I can see each block has up to double digits of such transactions. But block capacity is thousands of transactions.
So based on what is the site in the OP claiming to see around 50% "non-financial" transactions?
Sorry, I still don't seem to understand where all these OP_returns are coming from unless I'm missing something here.

[FinneysTrueVision]

I'm looking at ordiscan:
https://ordiscan.com/blocks

It shows both ordinals and BRC transactions afaik

I can see each block has up to double digits of such transactions. But block capacity is thousands of transactions.
So based on what is the site in the OP claiming to see around 50% "non-financial" transactions?
Sorry, I still don't seem to understand where all these OP_returns are coming from unless I'm missing something here.

You can use the mempool goggles feature on mempool.space to get a better visualization. Most OP_RETURN transactions are related to something called Runestones.

OP_RETURN outputs are probably unspendable, so it makes sense to classify all transactions under that as non financial. It's meant as a way of storing data on the chain while allowing nodes to safely ignore it and prune it out since any coins involved are effectively burned.

Having one unspendable output wouldn’t make the whole transaction non-financial. Bitz.io includes an OP_RETURN output in their withdrawals. They are also used in THORchain deposits and Whirlpool coinjoins. These might be niche uses, but it is still financial activity.

[alani123]

So I've realized that https://ordiscan.com/blocks isn't particularly good at catching runes transfers or burns, just mints... But transfers are the biggest part of the picture.  

Checking the block template with OP_return in the filters on mempool.space shows several transactions with this OP code and most of them are indeed runes.
But there are some OP_Return transactions that are just using the code for other purposes.

So while the website in the OP has mostly a correct harassment, it doesn't necessarily mean that a TX including OP_return is non-financial. So they might need to change how they calculate their percentage if they want to be more accurate. Although currently rune transactions are indeed very high.

[PrivacyG]

We already have the 'tainted' versus 'clean' Bitcoin which is a cretin theory that got successfully printed in the brains of average users, even if it is pretty much an attack to the fungibility of Bitcoin.  Now we have 'financial' and 'non financial' transactions and I am hoping this does not get printed in their brains again.  I do not know if there is any way to stop these trends that have no thing to do with Bitcoin itself and how it works but I do hope someone finds a way.  Because it is becoming very silly already.

And just wait for it because if the European Union or The United States ever bans self custody then we will already have three idiotic artificial categories of Bitcoin.  'My government says your Bitcoin is clean but it does not have your European Citizen Passport linked to it so I rather not!'

[alani123]

We already have the 'tainted' versus 'clean' Bitcoin which is a cretin theory that got successfully printed in the brains of average users, even if it is pretty much an attack to the fungibility of Bitcoin.  Now we have 'financial' and 'non financial' transactions and I am hoping this does not get printed in their brains again.  I do not know if there is any way to stop these trends that have no thing to do with Bitcoin itself and how it works but I do hope someone finds a way.  Because it is becoming very silly already.

And just wait for it because if the European Union or The United States ever bans self custody then we will already have three idiotic artificial categories of Bitcoin.  'My government says your Bitcoin is clean but it does not have your European Citizen Passport linked to it so I rather not!'

From on-chain data, it doesn't look like there's a rush to do runes transactions now.
If there was a rush, they'd be pushing the tx fees way above the current requirement of 1vSat/byte. Rather, they seem to be filling space that would rather be empty now that we have low demand for on-chain transactions.

Of course speculation in the crypto space has at times been very crazy and this could change in the future but having lots of runes transactions in this time seems different than the previous Ordinals craze which was pushing fees up as well.

I don't think it has anything to do with authorities pushing the narrative of tainted coins though.

[dzonikg28]

We already have the 'tainted' versus 'clean' Bitcoin which is a cretin theory that got successfully printed in the brains of average users, even if it is pretty much an attack to the fungibility of Bitcoin.  Now we have 'financial' and 'non financial' transactions and I am hoping this does not get printed in their brains again.  I do not know if there is any way to stop these trends that have no thing to do with Bitcoin itself and how it works but I do hope someone finds a way.  Because it is becoming very silly already.

And just wait for it because if the European Union or The United States ever bans self custody then we will already have three idiotic artificial categories of Bitcoin.  'My government says your Bitcoin is clean but it does not have your European Citizen Passport linked to it so I rather not!'

Thankfully the average user is often too lazy to understand the more complex bullshit trends.

As DaveF said, there is no 'non-financial' transaction because if that is defined as 'no transfer from A to B', it is just wrong. Let a wealthy individual create 10 million OP_Return transactions and afterwards let's see where the wealth is. If it was "non-financial", the individual should be sitting on the same amount of BTC...

The 'tainted' vs. 'clean is easier to grasp because the media has done its part. 'Bitcoin is only used for illicit transactions' - 'oh my god, I can't buy Bitcoin because a drug dealer might have possessed it at some point in the past'. That's simple, but utterly stupid of course as there was research done on fiat notes and I can't remember the share of all fiat notes in existence that are contaminated with cocaine, but it was staggering. Does the average fiat user care? No, but imagine the media would exaggerate all day long the possible consequences of fiat possession or usage the same way, asserting that possessing a fiat note with traces of cocaine could get you in trouble and police now conducts random samples on the street, it would be quite entertaining to see how people behaved in that case.

'Financial' vs. 'non-financial' is probably to cumbersome to dive into for most.

And just wait for it because if the European Union or The United States ever bans self custody then we will already have three idiotic artificial categories of Bitcoin.  'My government says your Bitcoin is clean but it does not have your European Citizen Passport linked to it so I rather not!'

I believe they won't outright ban self-custody, but they are already making self-custody unpleasant because as soon as you interact with any centralized off-ramp in the EU, some exchanges require you to prove ownership of an address and so on and so forth. 

[Rustam Meraj]

No, it is not entirely logical to refer to all of the OP_RETURN transactions as such as non financial. People who are designing the site are narrowly looking at this. They believe that when it comes to the aspect of a real transaction of Bitcoin, it simply involves transfer of the coins between person A and B. However, Bitcoin is now so much larger than that. With OP_RETURN option, individuals are able to put little bit of data on blockchain. Whereas others use it to have fun through digital artistic activites or even texts, others use it to carry out critical financial activities such as smart contracts or closing business deal. You are utilizing network in its intended use when you have to pay miner fee to include your transaction in block. You are purchasing bandwidth on most secure computer net around. Point is that whether you send coins or save data, you pay with real money that service. To refer to such transactions as spam or non.financial is not correct. Bitcoin is open market free of charge. Each and every transaction is valid and legally has monetary equivalent as long as one pays network fee.

[alani123]

How could the tainted coin narrative be relevant if an OP_return input has 0 spendable outputs?

[dzonikg28]

How could the tainted coin narrative be relevant if an OP_return input has 0 spendable outputs?

It isn't directly related to OP_return, it was mentioned as one of those brain farts that authorities brought up and was proliferated by some idiots, most media included, that BTC potentially related to (past) illicit activities could be tainted, thereby destroying BTC fungibility, which I am sure you know.

Separating transactions in 'financial' and 'non-financial' makes as less sense as distinguishing 'tainted' from 'non-tainted' BTC. The OP_return input may have 0 spendable outputs, but how do you create an OP_return input without any spent output? It can't be non-financial as OP_returns can't exist in isolation. 

[alani123]

How could the tainted coin narrative be relevant if an OP_return input has 0 spendable outputs?

It isn't directly related to OP_return, it was mentioned as one of those brain farts that authorities brought up and was proliferated by some idiots, most media included, that BTC potentially related to (past) illicit activities could be tainted, thereby destroying BTC fungibility, which I am sure you know.

Separating transactions in 'financial' and 'non-financial' makes as less sense as distinguishing 'tainted' from 'non-tainted' BTC. The OP_return input may have 0 spendable outputs, but how do you create an OP_return input without any spent output? It can't be non-financial as OP_returns can't exist in isolation.  

Ok? But that makes it a bit of a strawman then. Because authorities haven't been saying anything publicly about OP_return? It's more of a debate internal to the Bitcoin community.

Authorities haven't let this be much of a narrative anymore. Every centralised entity is going to have serious trouble if they don't enforce sanctions and individuals can be the recipients of the widespread consequences. Received some BTC that came out of a no-KYC exchange after w conjoin with a tainted address? Oh great, now your exchange account is frozen and you may or may not lose your coins.

What about this makes any parallels with the debate on whether non-financial transactions are a correct classification?

[dzonikg28]

Ok? But that makes it a bit of a strawman then. Because authorities haven't been saying anything publicly about OP_return? It's more of a debate internal to the Bitcoin community.

Authorities haven't let this be much of a narrative anymore. Every centralised entity is going to have serious trouble if they don't enforce sanctions and individuals can be the recipients of the widespread consequences. Received some BTC that came out of a no-KYC exchange after w conjoin with a tainted address? Oh great, now your exchange account is frozen and you may or may not lose your coins.

What about this makes any parallels with the debate on whether non-financial transactions are a correct classification?

I understand where you are coming from, but I guess, uhm, the question about correct classification? What makes a BTC tainted? A BTC is a BTC.

'Non-financial' sounds as if you could clog the network without transferring wealth, without any finances involved whatsoever. It makes no sense. I can't transact on the Bitcoin network without creating a financial transaction. It is not possible. I have to create a financial transaction to facilitate a non-financial transaction? It's getting wild. If I use a dollar note and write a few words onto it and hand it over to Bob, it was a financial transaction, whether I want it to be one or not. Kind of philosophical discussion though, but since PrivacyG brought the average user into play, they might indeed misunderstand the distinction.

A BTC is a BTC, though I agree with the difference being that authorities could add artificial tags to a coin like 'tainted'. It is misleading.

P.S.:

transactions are not made with the explicit intention of transacting BTC

This, however, bolsters your point to some degree. That is why I said I see where you are coming from. Still imagine ordinal transactions make the fees shoot through the roof, up to which point would the transaction be 'non-financial'? Only the intent counts when in fact I have to pay 25 bucks to inscribe a little note?

[alani123]

If I let a paper dollar bill fly into the air so I can take a picture of it with the clouds as a background, money is transferred from me and will most likely be received by another entity too. But my goal was never to send it to a receipient. Rather it was a legacy act and my sole intention was to take the picture. I couldn't care less if anyone actually received my dollar.

Ordinals/runes/BRCs pay a fee, but their outputs aren't having any intended recipient. Rather it's the act of spending, not spending AND receiving which is considered more Alice sends to Bob type of a transaction.

I'm wondering. What if a miner accepted a rune TX without any fee? Would we see a transaction with literally 0 BTC spend. No feed no nothing? I'm wondering if this is feasible at least in theory.

I can see some point into to calling this a non financial transaction actually. It's not as harmful to BTC to classify TXs based on their intention and I see it as a different act as promoting enforcement action against coins.