Author: Jiang Haibo, PANews
Due to the hype of MEME and BRC-20 tokens, gas fees in the Ethereum and Bitcoin networks have hit short-term highs continuously since May. The average transaction fee required per Bitcoin transaction was $31.1 on May 10, the highest since April 2021, according to BitInfoCharts.
Bitcoin miners have received the highest income in several years. In some blocks, the income from transaction fees exceeds half of the block reward. If this situation develops, security issues after the halving next year can also be solved. But this also makes the Bitcoin network congested, with a large number of unconfirmed transactions in the mempool. The Bitcoin transaction congestion caused by Ordinals has caused great controversy in the Bitcoin community.
Developers’ concerns and causes of congestion
On May 7, Bitcoin core developer Ali Sherief initiated "As developers, should we reject non-standard Taproot transactions from full nodes" on the Bitcoin developer mailing list used to discuss Bitcoin's protocol and software development issues. discussion.
Due to the large increase in transaction volume of projects such as BRC-20, the memory pool has been severely congested and actual Bitcoin transactions have been blocked. These "worthless" tokens threaten the normal use of the Bitcoin network as a peer-to-peer digital currency. If transaction volumes cannot be reduced, he suggested adopting a Bitcoin Improvement Proposal (BIP) or enforcing “censorship” at the node level to reject all non-standard Taproot transactions. Ali hopes to find a solution that satisfies everyone in the Bitcoin community, including absolutists, libertarians, and the biggest libertarians.
To understand how to solve Bitcoin’s congestion problem, we should first know how the problem arises.
Initially, Bitcoin’s block size was limited to 1 MB. In 2017, the Bitcoin protocol activated Segregated Witness (SegWit) through a soft fork, partially solving the scalability problem and opening the door to second-layer solutions such as Lightning Network. Segregated Witness changes the way Bitcoin transaction data is stored. It removes the signature data of the transaction from the transaction body and stores it in a structure called "witness". Because signature data takes up most of the transaction data, this change could significantly increase the transaction processing capacity of the Bitcoin network and theoretically increase the upper limit of block space from 1 MB to 4 MB.
In 2021, Bitcoin once again implemented the Taproot upgrade through a soft fork, improving Bitcoin’s privacy and scalability. Taproot has a new Bitcoin script that makes complex smart contracts look like regular Bitcoin transactions on the chain and makes these complex transactions more space efficient and can be included in every block More deals.
Based on Segregated Witness and Taproot upgrades, software engineer Casey Rodarmor created the Ordinals protocol, which allows images, text, SCG, HTML and other information to be attached to Bitcoin’s smallest unit, 1 Satoshis. Similar to NFTs, satoshis with special information attached can also be freely transferred to complete transactions. Unlike NFTs in the Ethereum ecosystem, NFTs created through Ordinals will store all data on the chain, while the original data in NFTs on Ethereum may be stored on a centralized server off-chain, which also makes the NFTs on Ordinals NFTs are particularly popular.
Ordinals opposition among Bitcoin Core developers
In early February 2023, Luxor Mining mined Bitcoin’s largest ever block, measuring 3.96 MB. Within this block, Ordinals-related transactions account for 3.94 MB, or approximately 99.5%. This brings into focus the problems posed by Ordinals.
Luke Dashjr is the face of the Ordinals opposition and has contributed to many important Bitcoin improvement proposals and tool development. He has been a Bitcoin Core developer since 2011. Luke firmly defends the principle of Bitcoin decentralization. He is influential in the Bitcoin community, but he does not always receive unanimous support from the community. For example, he once advocated reducing the block size of Bitcoin to increase Decentralize and enable more users to run full nodes.
Luke considers Ordinals an “attack” on Bitcoin and believes it is a type of spam that should be filtered out, and existing filters should be extended to Taproot transactions. Interestingly, NFTs related to Luke’s name and code were issued to Ordinals without authorization and auctioned on Scarce.City, where they sold for 0.41 BTC. When Scarce.City wanted to distribute 90% of the sale proceeds to Luke, Luke rejected this "bribe" approach and wanted 100% of the proceeds returned to the buyer.
In addition, developer Erik Aronesty is also opposed to Ordinals. He believes that "non-monetary use is very dangerous to the stability of the network." The security of Bitcoin comes from mining, and the security of mining depends on handling fees. High-value non-monetary uses may make Bitcoin more vulnerable to reorganization attacks.
Lightning Network could be a solution
Layer 2, represented by the Lightning Network, is generally considered by developers to be a solution to congestion. It solves the scalability issues of the Bitcoin blockchain by creating a faster and more efficient payments network.
During the period of Bitcoin network congestion, Binance, the largest cryptocurrency exchange, failed to withstand the pressure. It twice announced the suspension of BTC withdrawals, then increased the withdrawal fees, and stated that it would integrate the Bitcoin Lightning Network.
One of the concerns among developers about transaction congestion is that it will affect Bitcoin's vision as a "peer-to-peer electronic payment system." Even though transaction fees on the Bitcoin network are high and congested, the Lightning Network is still able to provide a fast and cheap payment tool. Several developers, including Ali, who started this discussion, agree.
In addition to the Lightning Network, some people have also proposed using zero-knowledge proofs to make native Layer 2 payments on Bitcoin.
Other solutions proposed by developers
Discussions about Bitcoin security and network abuse have continued since its inception. For example, 2010, discussion by Satoshi Nakamoto and Gavin Andresen. Satoshi believes that Bitcoin's design relies on all nodes getting exactly the same results when synchronizing messages, and that a Bitcoin-compatible version of the software would pose a threat to the network. Gavin Andresen responded that there are always people trying to damage and abuse the network, and all kinds of interesting information can be encoded in the TxOut script. Transaction fees may be viewed as disruptive to the network, but are much less disruptive than a network split or massive reorganization.
Melvin Carvalho proposed increasing the block size. But this view is not supported by others because it would reduce the decentralization of the network. Increasing the block size will require greater computing resources and storage space to process and store the blocks, increasing the operating costs of the full node.
Peter Todd mentioned that the transaction can be modified to reduce the embedded data, but this may not effectively solve the problem.
Erik Aronesty’s discussion focused on whether Bitcoin should be focused on one monetary purpose, rather than being a global ledger of everything. He proposed a possible solution where each non-economic user retains enough bitcoins and returns them to themselves, but also argued that it would be troublesome to solve the 1 sat problem.
Aleksandr Kwaskoff proposed an interesting scheme to allocate 10% of the space in the block to the senders of non-standard transactions and let them compete with each other for these block spaces. If there are no non-standard transactions, then all block space is given over to standard transactions.
In the end, everyone did not come up with a unanimous solution on how to handle Ordinals transactions, but Bitcoin Layer 2 is the development direction that most people agree on.
summary
The congestion caused by BRC-20 transactions on the Bitcoin network has attracted the attention of the Bitcoin developer community. In addition to higher fees and an increase in the number of unconfirmed transactions, developers are also more concerned about the security of Bitcoin, that is, possible divisions and reorganizations.
As of May 12, before publication, Bitcoin transaction fees have been significantly reduced. Although developers represented by Luke Dashjr have been opposed to the implementation of Ordinals and have provided some solution tools. But miners and developers are not the same group, and miners may not actively use these tools to filter higher-fee transactions when possible.
Layer 2, represented by the Lightning Network, is generally considered a tool to solve Bitcoin payment problems. Binance has also stated that it will support withdrawals on the Lightning Network. Bitcoin Layer 2 may be a direction of rapid development in the future.
(The above content is excerpted and reprinted with the authorization of our partner PANews, original text link)
Statement: The article only represents the author's personal views and opinions, and does not represent the objective views and positions of the blockchain. All contents and opinions are for reference only and do not constitute investment advice. Investors should make their own decisions and transactions, and the author and Blockchain Client will not be held responsible for any direct or indirect losses caused by investors' transactions.
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