Golden Finance reporter Jessy
Bitcoin is in crisis.
The crisis originated from the inscriptions. The stakeholders behind it, such as miners, developers with different opinions, community members, and capital parties, took advantage of this inscription crisis to stage a struggle for various ideologies and interests.
The flames of the inscription controversy were ignited by Bitcoin developer Luke Dashjr, who directly stated on X that the inscription was "garbage" and that the inscription exploited a vulnerability in the Bitcoin Core client, which would be fixed.
A single stone stirs up a thousand waves, and the industry has once again started a discussion about inscriptions. The views for and against inscriptions are logical. Those who oppose inscriptions generally say that inscriptions have engraved garbage on the Bitcoin chain, causing congestion on the Bitcoin chain. Those who support it believe that inscriptions have brought more benefits to miners, or that this is an innovation in the Bitcoin ecosystem.
At similar crossroads in the past, Bitcoin eventually determined the development direction of "small blocks", that is, only serving as a store of value.
Behind the dispute over the inscriptions is still a dispute over interests wrapped in various ideologies. Miners, developers, bankers, retail investors, and exchanges have all come out to defend the ideologies or interests they believe in.
The wealth-creating effect gilds the “lice”
The inscription on Bitcoin is hot.
This is a seemingly useless thing that threatens the "purity" of the Bitcoin network. It is just a string of characters engraved on the Bitcoin main network to indicate the casting, transfer, etc. of the so-called "tokens".
It is like the "dust" on the Internet, or it can be likened to a louse on a puppy. It's just that this louse has become valuable because it grows on Bitcoin. People who hate it will think it is a parasite that survives by sucking the blood of Bitcoin.
In the minds of Bitcoin fundamentalists, Bitcoin should be pure and flawless. It only needs to be digital gold and value storage. This has been settled in the dispute between large and small blocks in the early years. Vitalik, who supports large blocks, built Ethereum and fulfilled his wish that Bitcoin would become a high-performance "computer". In 2017, Bitmain, which led many miners, attempted to replace Bitcoin with the forked large-block BCH, but it also failed.
This time, however, the "lice" on Bitcoin are particularly stubborn. The reason is simple: the interests behind it are too huge.
First of all, miners are making a fortune. There are still more than 100 days until the fourth Bitcoin halving. When the next halving actually takes place, the mining reward of 6.25 BTC per block will be reduced to 3.125 BTC. The miners’ coin-based income will be halved.
The minting and transfer of inscriptions brought them high profits. According to the statistical report of Hashrate Index, in May this year, miners earned more from transaction fees than from block subsidies, and it was even common to receive 12.5 or more bitcoins in the reward, which was exactly the block subsidy of the previous halving period.
The Bitcoin Inscription, a new story that sounds like a "grand narrative", is also very worth hyping in the eyes of capitalists.
This wave of turmoil in Inscription was indeed caused by Chinese speculators pulling up the stock price, which "overwhelmed" everyone.
Under the strong money-making effect, exchanges have also flocked in, from Gate, which was the first to launch inscriptions, to OKX's Web3 wallet's support for the minting and trading of inscriptions. Binance, which has always lagged behind in the layout of the inscription ecosystem, also launched SATS ahead of OKX on December 12. He Yi also said that Binance did not make enough efforts in the inscription market in the early stage, and will invest more support in the future.
With the influx of money, the "lice" also put on golden clothes. Or, putting aside prejudice, inscriptions may not be "lice", it can also be considered a rebellion and subversion of the rules constructed by the existing blockchain, such as fatigue with VC narratives. Of course, the most important thing is that "inscriptions" still have a huge wealth-creating effect.
“Decentralized” mining pools are also “centralized” to influence the development of Bitcoin
Overall, driven by strong interests, this "louse" becomes cute.
Moreover, in the eyes of the rebels, some people may wonder why Bitcoin should continue to develop along the path it once determined? After all, Bitcoin is a "neutral protocol" that does not carry any moral judgment.
Bitcoin developers, represented by developer Luke Dashjr, are strong opponents of inscriptions. He not only publicly expressed his opposition to inscriptions on social media, but also put his position into action.
The mining pool OCEAN founded by Luke Dashjr cannot process transactions related to inscriptions because it uses the Bitcoin Knots client. The update document of Bitcoin Knots 25.1 was mainly written by Luke Dashjr himself.
Luke Dashjr was able to filter out inscription-related transactions through technical means, but this inadvertently affected other transactions.
According to @SamouraiWallet, the Ocean mining pool uses Bitcoin Knots 25.1 developed by Luke Dashjr, which changes the Op_reture limit to 42 bytes (since Bitcoin Core version 0.12, the limit has been changed to 83 bytes). This means that the mining pool will censor and filter out privacy-enhanced mixing transactions such as Whirlpool CoinJoin and BIP47 notification transactions.
During the development of Bitcoin, there have been debates about the Op_reture standard. Op_reture is the transaction output of Bitcoin. This function can be used to destroy Bitcoin or store arbitrary data on the Bitcoin chain.
This means that Bitcoin Knots 25.1 is still using the previous Op_reture standard, and there have been debates about the standard of how many bytes should be used.
We cannot judge whether Luke Dashjr's use of 42 bytes as the standard is right or wrong. This is actually an action based on personal likes and dislikes, and a judgment of what Bitcoin should look like.
However, the industry has criticized the centralized mining model, saying it will make Bitcoin more and more centralized. After all, whoever controls the computing power has the power to influence the direction of Bitcoin's development.
In the history of Bitcoin development, such situations have certainly occurred. The biggest crisis Bitcoin has faced so far was that Bitmain, which occupied more than 51% of the mining power at the time, led the miners to replace Bitcoin with the forked BCH.
The war in 2017 was a war in which BCH, with a large block size, wanted to defeat BTC, with a small block size. In the end, it failed due to the intervention of the Bixin mining pool, which also had a large amount of computing power. At present, the combined computing power of the top two mining pools exceeds 51%.
The decentralized mining pool OCEAN founded by Luke Dashjr is different from the centralized mining pool in that there is a power relationship between the traditional centralized mining pool and the miners, because the miners need to obtain rewards through the allocation of the mining pool manager. OCEAN claims that it has changed the reward payment system of the mining pool to the miners, allowing BTC miners to obtain rewards directly instead of through the mining pool manager.
However, although there is no such power management between the mining pool managers and miners, the mining rules are still set by the mining pool. OCEAN still formulates a set of rules based on the managers' own likes and dislikes to filter out transactions that they want to package and those that they don't want to package. Isn't this also a kind of centralization?
The collision of various opinions and interests, but Bitcoin is still uncontrollable
Mining pools set various rules to review transactions on the Bitcoin chain, which is actually a kind of review driven by personal likes and dislikes, interests, politics, etc., which itself violates the core spirit of Bitcoin. OCEAN set up the review rules for transactions due to the "factional" disputes in Bitcoin, and not long ago, F2Pool was also accused of deliberately missing four transactions involving OFAC (U.S. Treasury Department's Office of Foreign Assets Control) sanctioned addresses.
The Bitcoin ecosystem is large enough, involving many interests, so it is inevitable that the above-mentioned "taking sides" behavior will occur.
Especially for the miners, they will inevitably make choices based on their own interests. But fortunately, there are different mining pools and countless miners. If a mining pool reviews and refuses to package a transaction, there will be other miners and mining pools that will package the transaction.
Therefore, we should thank Satoshi Nakamoto for designing the original mining method to produce Bitcoin, which allows miners to package and record transactions in the ledger for economic rationality.
In other words, as long as there is competition between mining pools and differences in positions, they will check and balance each other and maintain the stability of Bitcoin.
On the other hand, some things can be proven to last forever. Some things may only exist for a period of time. If Bitcoin is threatened by inscriptions or mining pools reviewing transactions, it can only prove that Bitcoin is a product of a certain period of time.
At present, it seems that Bitcoin has safely survived all the crises it has experienced in history. Bitcoin has not changed because of the interests or demands of a single person or a group. Its strength relies on consensus, and it seems that it is still unmanipulatable.
