On December 10, Veda, the Ordinals extension protocol, announced in X that the launch of the protocol will be postponed indefinitely due to force majeure, and Veda-core and Veda-bvm will be open source. The purpose of the Veda protocol is to solve the problem of the lack of L1 smart contracts in Bitcoin without changing the Bitcoin core consensus. Surprisingly, 2 hours before the announcement of the postponement, Veda announced that it would be launched soon, and had already formulated its token economics and token standards, and was already indexing its Ordinals service. After that, the personal details of the founder of the project were made public in the community.

Previous articles mentioned the controversy over the surge in Ordinals transactions causing congestion on the BTC network. After months of craze, Ordinals seems to be caught in a new storm. Veda's open source is also a wave of this storm, and Dashjr's calling Ordinals a "vulnerability" is the center of this storm. This series of events has made the community full of uncertainty about the development of Ordinals and further caused more concerns. In this article, TrendX Research Institute will explore these events in depth and their subsequent impact on Ordinals.

Ordinals are "loopholes"?

On December 6, Bitcoin developer and co-founder of Ocean mining pool Luke Dashjr launched a lengthy critique of inscriptions such as Ordinals and BRC-20 tokens, claiming that they are SPAM attacks that exploit BTC vulnerabilities. According to Dashjr, since 2013, Bitcoin Core code has allowed users to set limits on the size of additional data in transactions; inscriptions bypass this limit by disguising their data as program code, which makes them a "vulnerability."

Dashjr said that the Bitcoin Core code is still vulnerable to "SPAM attacks" in the upcoming v26 version, and developers hope to finally solve this problem before v27 next year. Dashjr also said that if the vulnerability is resolved, Ordinals and BRC-20 tokens will be stopped, although existing inscriptions will continue to exist. On the same day, Ocean, a decentralized mining protocol where Dashjr serves as CTO, announced at X that the Bitcoin Knots upgrade "fixes a vulnerability that has long been exploited by modern SPAM attackers." Dashjr later revealed that the vulnerability issue has been entered into the U.S. National Vulnerability Database as CVE-2023-50428.

The Ordinals Controversy

The debate about Ordinals has always existed, and Dashjr's speech brought these debates to a climax: on the Bitcointalk forum, there are many discussions about resisting "attacks on Bitcoin" that these people claim are malicious BSV developers. There are also discussions about taking soft forks to enforce strict Taproot verification script size, and how the protocol can filter what they consider to be "SPAM attacks", and even taking hard forks to revoke Taproot.

Bob Bodily, co-founder and CEO of Ordinals marketplace Bioniq, disagrees, saying: “Demand for Bitcoin block space has increased this year due to Ordinals, with these transactions paying over $100 million in network fees. Miners want more revenue, and Ordinals have brought about a resurgence in Bitcoin, with huge demand for block space.” Bodily also said that the move would also undermine many of the benefits of the Taproot and Segwit upgrades and eliminate valid Bitcoin use cases. Even with the restrictions in place, Bodily believes that demand for protocol transactions such as Bitcoin Ordinals will still exist.

Like Bodily, Casa CTO Jameson Lopp expects economic rationality to prevail, explaining at X that miners are now mostly large businesses with a duty to maximize profits for shareholders, so they will mine any valid transaction that pays the highest fee. He also said that few people agree on classifying inscriptions as exploits, and that Dashjr's classification of them as SPAM attacks is subjective.

Hass McCook, a former member of the Bitcoin Mining Council and a staunch believer in Bitcoin, does not like Ordinals, but he also thinks that "getting rid of" Ordinals is not a good thing. He said: "The most important thing outside of Bitcoin is freedom. My overall view is that I personally don't like it (Ordinals) and don't see its value. But I don't want to censor it. I think this could go down a very dark path."

What's next for Ordinals?

Luke Dashjr’s proposal does not mean final implementation. He himself does not have access to the Bitcoin code, and the upgrade still requires miners to vote.

Bitcoin is different from Ethereum. The words of developers are not decisive. Code upgrades must be voted on by miners, and objections will prevent upgrades from taking place. Even if developers insist on upgrading, miners still have the right to choose to fork; however, at this critical moment in the approval of the Bitcoin spot ETF, the possibility of a fork is quite low.

At the same time, deleting high-value transactions from the memory pool will reduce miners' income, and Bitcoin miners are unlikely to engage in a "moral struggle" on this issue. Even if Bitcoin community members intend to maintain the value of Bitcoin and rectify the negative consequences of Ordinals, such as the rising gas fees and BTC network congestion, it cannot be denied that the Ordinals craze has also brought about positive development of the BTC ecosystem.

Well-known podcaster Peter McCormack said that these assets (Ordinals) cannot benefit those who use Bitcoin for payments because they only create a high-fee environment. It is not difficult to see that the outbreak of Ordinals has caused losses to the interests of some Bitcoin holders, which is also the core of the debate between supporters and opponents of Ordinals.

Conclusion

The debate over Ordinals is not over yet. The emergence of Ordinals has left a profound impact on the Bitcoin ecosystem, sparking discussions on gas fees, block space requirements, and other aspects. As for the contradictions between the supporters and opponents, as well as the impact on the Bitcoin network, there may be more appropriate protocols or ways to solve them in the future. The Bitcoin community is facing the question of how to deal with Ordinals, but overall, the possible direction of community voting seems to be more inclined to support Ordinals, and the possibility of forks is relatively small. After all, for miners and supporters of Ordinals, as long as at least one Bitcoin mining pool contains inscription transactions, they are unlikely to disappear.

Reference: https://nvd.nist.gov/vuln/detail/CVE-2023-50428

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