• The article discusses the new ways of tracking sats (fractions of Bitcoin) across transactions, known as Ordinals and Inscriptions.
• It explains how they work, the potential benefits of using them and the concerns that have been raised regarding their usage.
• Lastly, it provides an opinion on the matter from the author’s perspective.
What Are Ordinals and Inscriptions?
Ordinals are a made up way of tracking sats (a fraction of a Bitcoin) across transactions. They are numbered in order to represent when sats were mined into existence, and tracked through a first in, first out (FIFO) method. An inscription is another made-up convention where sats can be inscribed with arbitrary content, a kind of Bitcoin-native digital artifact or NFT. They are written into transaction witnesses so they never enter the UTXO set.
The Bull Case for Ordinals and Inscriptions
The pro case for Ordinals and inscriptions is that it could be argued as “Come for the fun, rich art, stay for the decentralized digital money.” Additionally, it could be seen as a way to argue that “Bitcoin does it better” in comparison to shitcoin NFTs because Bitcoin inscriptions are immutable, always on chain, simpler and more secure than shitcoin NFTs.
Concerns Raised With Inscriptions
The main concerns raised about using these conventions include reduced accessibility to transact on Bitcoin due to degens creating transaction backlogs; reduced ability to run full nodes because of increased storage requirements; and the possibility of illegal material being recorded onto Bitcoin’s blockchain which may discourage some users from using it.
From this author’s perspective while there may be fun aspects associated with using ordinals or inscriptions one must consider all factors before engaging with them due to potential impacts on fees per real byte as well as other risks outlined above.
In conclusion, while there may be some benefits associated with using ordinals or inscriptions one must carefully weigh all pros and cons before deciding whether or not to use them given their impact on fees per real byte as well as other risks associated with their usage such as recording of illegal material onto bitcoin’s blockchain which may discourage some users from utilizing Bitcoin itself .