As the price of Bitcoin rises again towards $45,000, the cryptocurrency network is showing signs of tension. More than 260,000 unconfirmed transactions piled up in the mempool, slowing down transaction speeds and increasing fees.
This congestion has reignited debate about a new Bitcoin innovation called ordinal inscriptions.
key point
- Unconfirmed BTC transactions are increasing, causing network congestion and rising fees.
- Ordinal inscriptions add additional data to transactions, bypassing Bitcoin Core’s size limitations.
- Luke Dashjr calls the inscription a “bug” and vulnerability that needs to be fixed.
- Others argue that the inscription advances Bitcoin, encourages experimentation, and benefits miners.
- The controversy has divided the BTC community, with the price recently rising back to $45,000.
Ordinal inscriptions involve adding additional data to Bitcoin transactions by encoding information into the smallest units of BTC, called satoshis. This allows each satoshi to carry up to 4MB of data, which is essentially converted into a token similar to an NFT. The trend began this spring with people selling engraved Satoshis as collectibles or posting messages on the blockchain.
However, ordinal inscriptions push more data into Bitcoin blocks, resulting in recent network delays and rising costs. “Inscriptions is exploiting a vulnerability in Bitcoin Core,” prominent BTC developer Luke Dashjr said this week, referring to the leading Bitcoin software. He claims that the inscription is a “bug” that needs to be fixed, bypassing Bitcoin Core’s transaction size limit.
PSA: “Inscriptions” is exploiting the following vulnerabilities: #Bitcoin The core of blockchain spam. Since 2013, Bitcoin Core has allowed users to set limits on the size of additional data (‘-datacarriersize’) in transactions they relay or mine. By obfuscating data with program code…
— Luke Dashjr (@LukeDashjr) December 6, 2023
However, others believe that the inscription represents important experiments and advancements in Bitcoin’s capabilities. “The epitaph is unstoppable,” said Jason Fang, a cryptocurrency investor. “This gives miners more fees and higher profits.” Inscription Project developers claim to encourage permissionless innovation based on the underlying Bitcoin protocol.
The debate essentially boils down to a division between Bitcoin purists who want to optimize space for payments and proponents who want to expand Bitcoin’s usefulness such as metadata, asset tokenization and decentralized messaging. There is also disagreement about how much control or oversight developers should exercise over their use of the open-source Bitcoin blockchain.
For now, the inscription continues to spread, causing a headache for those trying to send normal BTC transactions. However, future experiments may be weakened by a planned update to fix Bitcoin Core’s data size limitations. The coming months will likely see further debate among developers, miners, and powerful Bitcoin users about the appropriate future of extensions like Inscription.