The recent launch of a nonfungible token (NFT) protocol on the Bitcoin mainnet has the crypto community divided over whether it’ll be good for the Bitcoin ecosystem.
The protocol, referred to as “Ordinals,” was created by software engineer Casey Rodarmor, who officially launched the program on the Bitcoin mainnet following a Jan. 21 blog post.
The protocol essentially allows for the Bitcoin version of NFTs — described as “digital artifacts” on the Bitcoin network.
These “digital artifacts” can comprise of JPEG images, PDFs, video or audio formats.
The introduction of the protocol has the Bitcoin community divided, however, with some arguing that it offers more financial use cases for Bitcoin, while others say it’s straying away from Satoshi Nakamoto’s vision of Bitcoin as a peer-to-peer cash system.
Bitcoin bull Dan Held was one of those on board with the development, noting that it would drive demand for block space — and thus fees — while bringing more use cases to Bitcoin.
Some have pointed out that these NFT-like structures have taken up block space on the Bitcoin network, which could drive up transaction fees.
Among those include Twitter user “Bitcoin is Saving,” who argued to their 237,600 followers on Jan. 29 that “privileged wealthy whites” wanting to use JPEGs as status symbols may exclude marginalized people from participating in the Bitcoin network.
Cryptocurrency researcher Eric Wall disagreed, opining that Bitcoin’s built-in block size limit would prevent a rise in transaction fees.
Others such as Blockstream CEO and Bitcoin core developer Adam Back weren’t happy with meme culture being brought to Bitcoin, suggesting that developers take the “stupidity” elsewhere:
However, Ethereum bull Anthony Sassano, the host of The Daily Gwei, took a shot at the Blockstream CEO for wanting “undesirable” transactions to be censored, which many believe goes against the ethos of Bitcoin:
In a blog post, Rodarmor explained that the NFT-like structures are created by inscribing satoshis — the native currency of the Bitcoin network — with arbitrary content.
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These inscribed satoshis — which are cryptographically represented by a string of numbers — can then be secured or transferred to other Bitcoin addresses, according to notes in Ordinal’s technical documentation:
“Inscribing is done by sending the satoshi to be inscribed in a transaction that reveals the inscription content on-chain. This content is then inextricably linked to that satoshi, turning it into an immutable digital artifact that can be tracked, transferred, hoarded, bought, sold, lost, and rediscovered.”
The inscriptions take place on the Bitcoin mainnet, no sidechain or separate token is needed, the document states.
It appears that only 277 digital artifacts have been inscripted thus far, according to the Ordinals website.
Interestingly, Rodarmor admitted in an Aug. 25 interview on Hell Money Podcast that Ordinals was created to bring memes to life on Bitcoin:
“This is 100% a meme-driven development.”