When it comes to recent hot topics about NFT, the Bitcoin Ordinals protocol cannot be avoided. The launch of the Ordinals protocol brought the number of non-zero Bitcoin addresses to an ATH of 44 million, according to crypto analytics platform Glassnode.
So what is it, how does it work, and what impact will it have? Let's find out.
Technical solutions for Ordinals
The Ordinals project is divided into two parts: Ordinal Theory and Inscription. The Ordinals theory is a system that assigns serial numbers to each Satoshis (Satoshis, the smallest unit of Bitcoin, "Satoshi", and one Bitcoin is equivalent to 100 million Satoshis), so that each Satoshi can be tracked and transmitted. The system numbers each Satoshi according to the order of mining, and Satoshi thus obtains an ID that can be assigned content.
In the BIP created by Casey on February 2, he describes the technical principle of ordinal numbers like this: "Each satoshi is numbered consecutively starting from 0 in the order in which it was mined. These numbers are called 'ordinal numbers' because they are mathematical. The ordinal number on , giving the order of each satoshi in the total supply.
The term 'ordinal' is quite explicit as it is not used anywhere else in the Bitcoin protocol. According to the size and order of the transaction input and output, the serial number Satoshi in the transaction input is transferred to the output Satoshi in the order of first-in first-out. "
Individual satoshis are originally fungible, but become non-fungible tokens once they accept the Ordinals number.
So how is digital content stored on the blockchain? Each transaction of Bitcoin contains two parts: transaction information and witness information. Transaction information refers to who transferred how much money to whom and when, and witness information refers to which nodes verified the reliability of the transaction information when.
The portion of the witness information, more specifically, the portion that was initially the repository of digital signatures. Separate transactions and signatures can make better use of the 1MB block space.
Inscriptions are updated using Taproot, and their data is stored via Taproot spending scripts. SegWit relaxes restrictions on the size of signatures (witnesses) (SegWit parts are limited to 4MB), and Taproot makes it easier to store arbitrary data in Bitcoin transactions. So Ordinals developer Casey repurposed old opcodes (OP_FALSE, OP_IF, and OP_PUSH) into something he created called an envelope to store arbitrary data for NFTs called Inscriptions.
Ordinals essentially link a certain Satoshi's serial number to the content of the witness message, and then store the digital content forever in the Bitcoin blockchain. However, the node can delete this part after completing the block download and signature verification, thereby saving the space of the local disk.
It is important to note that if the node is a relay node (a node that redistributes blocks through the network), it must retain witness information. Because the relay node receiving the block needs to verify the signature, it must have complete witness information.
How are Ordinals different from NFTs?
The data of NFT on Ethereum is usually hosted in the Interplanetary File System (IPFS: This is a decentralized file storage system, a bit like a blockchain hard drive), developers can use dynamic metadata to change NFT, such as Some NFT projects update the metadata of individual NFTs to improve image quality.
In Casey’s view, these NFTs are “incomplete” because many items’ data is stored off-chain. Ordinals are "complete" because all data is stored directly on-chain. That's why Casey calls them digital artifacts, not Bitcoin NFTs. Additionally, NFTs often come with creator royalties, while digital artifacts do not.
What will the Ordinals bring?
advantage
As mentioned above in the section "What is the difference between Ordinals and NFT?", Ordinals ensures that the data of "NFT" is on the chain, changing the current status of many NFT project data being generated off-chain. In this regard, Bitcoin The Ordinals project is expected to drive cultural change in the Bitcoin ecosystem as well as technical improvements in NFTs.
At the same time, Ordinals introduces JPEG images, PDF, video or audio format content, which is likely to help break the monopoly of the Bitcoin ecosystem.
Previously, many people believed that the Bitcoin ecosystem could only focus on one thing well, and the launch of Ordinals was destined to inject multiple vitality into the blockchain.
Many people think that the Ordinals protocol may be able to solve the problem of shrinking Bitcoin security budget, but the security of the protocol cannot be based on people's demand for NFT.
We can expect that in a bull market, there will be a lot of interest in NFTs, and spending on security issues will increase accordingly. But Bitcoin doesn’t need to solve the security budget in a short-term bull market, it needs to solve it in a long-term bear market where no one cares about cryptocurrencies.
Ordinals aren't a good solution to budgetary problems right now, but they help.
shortcoming
First is the scalability issue. The current Bitcoin network already has problems such as limited scalability and limited transaction throughput, and integrating NFT may exacerbate these problems, making transactions more difficult and expensive.
Additionally, Ordinals substantially increase the utilization of Taproot, which can lead to increased transaction costs and network congestion.
The second is the storage problem. The introduction of Ordinals means that the Bitcoin blockchain needs to store more information, and the storage cost will also increase accordingly. Ordinals store file metadata on the chain. If it takes up too much block storage space, it will affect the normal number of transactions on the chain.
The last thing I have to mention is the environmental issue. Large blockchains consume a lot of energy, and as the largest blockchain in the world, the Bitcoin ecosystem still uses the energy-intensive proof-of-work(PoW) consensus mechanism. Due to the ecological scale and PoW consensus mechanism, Bitcoin far exceeds other blockchains in terms of energy requirements.
According to an August 2022 U.S. government report, Bitcoin accounts for 60% to 77% of the total electricity consumption of global crypto assets. If Ordinals expands the ecological content of Bitcoin, then the introduction of new things will inevitably require a new round of energy consumption, and energy consumption will inevitably bring about environmental impacts.
summary
Once Ordinals was launched, it caused an uproar, and the encryption community reacted differently to it. Some people worried that recording irreplaceable data on the blockchain might cause data expansion problems, while some believed that Ordinals could promote the diversified development of the blockchain. Incentivize developers to use Bitcoin and fuel the development of other technologies.
It is still unclear whether it will bring about major changes to the industry, and combined with the above analysis of advantages and disadvantages, we cannot say whether the Ordinals protocol is good or bad. The train has left the station, let's see what happens next.
refer to:
https://medium.com/coinmonks/do-you-want-nfts-on-bitcoin-df1fc9ff02fc
https://nftnow.com/guides/bitcoin-nfts-ordinals-inscriptions-explained-finding-buying-more/
http://nft.aiju.com/news/53901.html
https://baijiahao.baidu.com/s?id=1758068583418746901&wfr=spider&for=pc
https://www.163.com/dy/article/HTN63H2N05561O0W.html
https://nftnow.com/features/how-ordinals-fractured-the-bitcoin-community-and-why-it-was-necessary/
Editor: Dali@Web3CN.Pro
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