Author: Ben Carman, Bitcoin Magazine; Translated by: Song Xue, Golden Finance
Bitcoin enthusiasts have been fighting to stop inscriptions since the infamous Taproot Wizard 4mb block. Inscriptions are certainly bad for Bitcoin, but the way Bitcoin holders are trying to stop them will be worse than any damage that inscriptions may cause.
Inscriptions work by embedding images or other data into the Bitcoin blockchain using technology found in Bitcoin Script. Essentially the data is placed in an inaccessible block of code followed by true spend conditions so that a user can claim the ordinal/NFT. It’s a pretty neat trick but breaks a lot of assumptions that many Bitcoin holders live by.
Previously, the main way to embed data in Bitcoin was OP_RETURN, which is basically an opcode entirely for embedding data, but there are two problems for NFT people: it makes the token unspendable, and the mempool policy limits it to 80 bytes. The advantage of inscriptions is that their only size limit is the block size, and since their data is in the witness, not the output, they benefit from the witness discount, allowing them to embed 4x the data. This breaks the assumption of many Bitcoin enthusiasts that theoretical 4mb blocks would never happen because only witness data is silly, however, NFT people found a way to tokenize it. This is now common, and we have seen a large number of inscriptions, driving up fees and block sizes.
However, now that it has already happened and is commonplace, there is nothing we can do to stop it.
In response, Bitcoin supporters are proposing methods of “stopping” inscription that would cause worse damage than the inscription itself.
Almost all proposals to stop inscriptions boil down to preventing these transactions from getting into the mempool. The mempool is the battleground for Bitcoin transactions and we need to protect it. The mempool only works if it is the primary way to get miners transactions with the highest fees. If we lose that guarantee, people will turn to centralized systems and we may never get the mempool back. Filtering spam transactions out of the mempool will not stop inscriptions, it will only delay them by a week at best. They already have backchannel communication with the mining pools, and if we cut them out of the mempool, the only pools getting these fees will be the ones producing the shitcoins. This is already happening on many shitcoin networks where their mempools have been terminated for one reason or another and the primary way to broadcast transactions now is through a centralized API. This essentially creates a permissioned network where even though anyone can run a node, if you don’t have access to the transaction broadcasting API, you can’t access Bitcoin. We are currently seeing increasing efforts from Congress to regulate nodes, miners, and wallets as money transmitters, and losing the mempool will make this problem 1000x worse. If we lose the mempool, trustless fee estimation becomes impossible and there are serious security issues, but that is beyond the scope of this post.
Additionally, filtering transactions based on “spam” indicators could be taking us down a dark path. The most economical way to do transactions in Bitcoin is not the most private. Today, the most popular way to get privacy on-chain Bitcoin is to do a CoinJoin. A CoinJoin isn’t necessarily an economic transaction, it’s really just a spend with someone else. If we set the precedent that you have to prove the usefulness of your transaction in order to not be considered spam, it won’t be long before people find a way to exploit this by trying to spam CoinJoins and other privacy techniques by excluding them from the mempool.
We have seen many shitcoin bubbles over the past decade and this one is no different. The shitcoin creators will eventually run out of fools to buy into their scams and everything will go back to normal, but we can’t shoot ourselves in the foot by trying to stop things prematurely because we can only wait it out.
