There’s a new problem on the Twitter timeline: BRC-20 tokens.
A nod to the ERC-20 token–the most common Ethereum token format–BRC-20’s are a type of Inscription under Ordinal theory responsible for the highest Bitcoin transaction fees since the last bull market. Indeed, dollars per petahash per day has spiked nearly 100%, to $127/PH/day since BRC-20 mints started relentlessly pounding Bitcoin’s blockchain.
(For those playing catch up, Ordinal theory is a new way to map out and include data on the smallest denomination of Bitcoin, a satoshi).
Read: 5 ways Bitcoin inscriptions could change mining revenue
Most Inscriptions are JPEGs, such as the ones we created for The Mining Pod show you can view here. An Inscription can be most any data: songs, images, gifs, video, etc as long as it fits within the data and economic constraints of a Bitcoin block.
Similarly, BRC-20s use Ordinal theory and witness data fields in Bitcoin to include arbitrary information on a Satoshi. Dissimilarly, BRC-20 tokens are not in it for the art, but for the token. This token standard allows for the creation of a minting contract, minting of tokens and transfer of tokens all through the Bitcoin blockchain. Here’s an example of the ‘Ordi’ deployment contract, a popular BRC-20 mint:
{
"p": "brc-20",
"op": "deploy",
"tick": "ordi",
"max": "21000000",
"lim": "1000"
}
These tokens can be traded–and that’s about it for the moment.
Bitcoin developers aren’t happy about Inscriptions, and are doubly unhappy about BRC-20 tokens–which arguably bloat the chain with fungible tokens Bitcoin was never designed to handle. For example, Luke Dashjr–one of the oldest Bitcoin developers–made the case for filtering Inscriptions out as spam only last Monday on the Bitcoin developers email list.
“Action should have been taken months ago. Spam filtration has been a standard part of Bitcoin Core since day 1. It’s a mistake that the existing filters weren’t extended to Taproot transactions. We can address that, or try a more narrow approach like OP_RETURN (ie, what “Ordisrespector” does). Since this is a bugfix, it doesn’t really even need to wait for a major release.”
Miners, on the other hand, are reaping in the benefits and even encouraging the development of Ordinals:
- Marathon Digital has mined a half-dozen blocks with over 10 Bitcoin due to Ordinal derived fees over the last few days.
- Luxor Technologies continues to develop OrdinalHub, a premiere data service for tracking Ordinals.
- DMG Blockchain inscribed 100 ‘Nippies’ Inscriptions in block 784173 in early April.
Unfortunately, the incentives for miners and the perspective of Bitcoin developers may drive a wedge between two parts of the Bitcoin community, leaving users to decide for themselves how they see Inscriptions: true innovation or on-chain bloat. Are we going to turbo re-run 2016-2017?
