Biteye: An Overview of Ordinals Technology, Ecosystem, and Data in One Article
Read the full article:https://mp.weixin.qq.com/s/gNxjVMjsDNb5qIF4kTQ5Ew
The total supply of Bitcoin is 21 million, with the smallest indivisible unit being sat (Satoshi), where 1 BTC = 100 million satoshis. Rodarmor proposed the Ordinals theory, which assigns a unique ID to each satoshi based on the order it was mined, starting from 0. For example, the first satoshi in the first block has an ordinal number of 0, the second satoshi has an ordinal number of 1, and the last satoshi has an ordinal number of 4999999999. This gives each satoshi an ID attribute, enabling Bitcoin to have native NFT creation capabilities. These unique satoshis can be “inscribe” with any content, such as text, images, videos, etc., to create “inscriptions.” Inscriptions are the metadata concept in Bitcoin NFTs, stored on-chain in taproot scripts.
On March 8, 2023, domo proposed using JSON data format Ordinals inscriptions to deploy token contracts, mint coins, and transfer assets. The experimental Bitcoin Fungible Token Protocol, BRC-20, emerged, along with the issuance of the first BRC-20 token — $ordi, with a total supply of 21 million (in homage to BTC). Available on a first-come, first-served basis, anyone can mint it for free. As its name suggests, this token aims to compete with the ERC-20 Fungible Token Standard, with core features including token deployment, minting, and transfer. These three functions correspond to different inscriptions.
The advantage of BRC-20 lies in the direct storage of inscriptions on the Bitcoin L1 chain, compared to many ERC-standard NFT metadata stored on IPFS, Arweave, or even centralized Web2 server platforms. NFTs or inscription tokens on the BTC network will be more decentralized, and inscriptions are non-erasable and non-modifiable, adding more lasting value than diamonds.
Since inscriptions are inscribed on individual satoshis using ordinal theory, each satoshi is classified into different rarity tiers based on its ID. Another hot topic of BRC-20 is finding those rare satoshis, which are very attractive to collectors, such as those with inscriptions with IDs lower than 100k or the first inscription after a block halving.
However, as an investment, liquidity exit issues must be considered. The BRC-20 ecosystem has weak infrastructure, lacking liquid exchanges, and cannot guarantee the safety of token transactions, with many flaws still present. Due to the absence of smart contracts, the financial application value of these FT/NFTs is significantly limited. However, a new wave is attracting many developers, with UniSat announcing its code is open source, meaning a large number of infrastructure tools are on the way, and with the integration of exchanges like OpenSea, trading will become smoother.
On the other hand, BRC-20 tokens currently lack practical application value, even somewhat resembling writing numbers on blank paper as checks. As more projects emerge, creating application scenarios for BRC-20 tokens will add more value to inscription tokens.
Wayne: What exactly are Bitcoin NFTs, BRC20, and Ordinal?
Original article link:https://mp.weixin.qq.com/s/A7F3yxUrap8nMAjSHkjc_Q
Bitcoin NFT
Bitcoin NFT are created by attaching arbitrary data to the smallest unit of Bitcoin, Satoshi, giving each Satoshi additional information stored on the blockchain. Unlike Ethereum NFTs, which are assets/data themselves and do not rely on other coins, Bitcoin NFTs are attached to the native currency. You can think of it as a book with an author’s personalized message written for you. Without the message, the book is identical to other copies of the same title, but the message makes it unique. Of course, the attached text, images, and other data are also stored on the blockchain.
Ordinal theory
The ordinal theory assigns a unique number to each Satoshi in the Bitcoin network, allowing different people or protocols to distinguish between Satoshis that were originally identical. In simple terms, it is based on the order or the time when the Satoshi first appeared.
BRC20
Since any information can be attached, why not create a standard? Twitter user domo wrote a BRC20 standard, and others began using this standard to attach information to Satoshis.
ORDI
The BRC20 protocol was proposed by domo, who issued the first token using this protocol, with a total supply of 21 million. The first batch of enthusiastic fans followed the above rules to create the first batch of commemorative cards.
Bitcoin data experiences dramatic fluctuations
Two months ago, the average BTC block reward was only about 0.19 BTC in transaction fees; it has now surged to 4.85 BTC. Miners are reaping significant rewards. Due to the popularity of Inscription and BRC-20, on May 7th, the Bitcoin network had over 400,000 unconfirmed transactions, setting a new historical record. Binance experienced multiple withdrawal suspensions and announced plans to implement the Lightning Network.
Bitcoin block height #788703 was an empty block (i.e., the block only contained the block reward coinbase transaction) and was only 14 seconds apart from the previous block. It is understood that mining empty blocks is not “malicious behavior” but an economically motivated choice to mine during the time it takes for the previous block to propagate and to avoid conflicts with transactions included in the parent block.
On May 7th, 75.77% of Bitcoin’s on-chain transactions utilized Taproot, setting a new historical record, compared to just 1.536% at the beginning of the year. The increase in Taproot adoption means that block sizes are increasing, leading to higher transaction costs.
A chainsplit of length 2 occurred at Bitcoin block height 788686, with 13 transactions involving nearly 10 BTC being double-spent on the longest chain. According to BitMEXResearch, chainsplit of length 2 are quite rare, with the last occurrence likely in November 2020. However, given the recent network congestion and the large number of invalid blocks (chainsplit of length 1), this may not be surprising.
After BRC20, new protocols ORC20 and BRC21 emerge
BRC20 has many limitations, including using only four characters for token names, no upgradeability, double-spending risks, and the inability to cancel transactions. ORC20 aims to remove these limitations, serving as a hard fork of BRC20. It has no fixed naming restrictions, uses the UTXO model to ensure no double-spending during transactions, mitigates double-spending issues, allows transaction cancellations and the transfer of deployed BRC20 tokens to ORC20, and incorporates transaction fee royalties into the rules (author: xiyu).
Alexei Zamyatin, the founder of Interlay, has proposed introducing the BRC-21 standard to bring fully decentralized cross-chain assets to the Bitcoin network and use them in the Lightning Network. The BRC-21 standard provides a way to mint BRC-20 versions of ETH, DAI, and other on-chain assets on the Bitcoin network (compiled by: Planet Daily).
Read more:
https://www.odaily.news/post/5186935
SlowMist: Security risks of BRC-20
Recently, BRC-20 has been popular, and we have noticed potential security risks from minting tokens to trading. In minting tokens, the security of related BRC20 token minting platforms is questionable, with weak defense measures, making them susceptible to malicious attacks that alter the code, potentially leading to stolen assets during the minting process. In trading, there are two methods: one is to find a third-party guarantor for private transactions, which can easily encounter scams and counterfeit tokens; the other is to trade on specialized platforms, but the security of these platforms cannot be guaranteed.
Opinion: BRC20 goes against the mainstream narrative of decentralization, scalability, and low cost
Author: Haotian | CryptoInsight
Original link:https://twitter.com/tmel0211/status/1655437579909730304
BRC20 goes against the mainstream narrative of decentralization, scalability, and low cost. It requires a centralized platform for bookkeeping because the Bitcoin network cannot prevent invalid inscriptions from being recorded on the chain, and the centralized platform must determine which inscriptions are valid. Additionally, its transaction scenario is highly susceptible to double-spending without a centralized platform to adjudicate. The first-come-first-served FOMO mechanism and miners’ priority packaging based on transaction fees create a logical paradox, which means minting is not necessarily fair.
The reason is simple: although everyone can mint simultaneously, if a novice user does not pay enough in transaction fees, they will undoubtedly be squeezed out by a bigger user with higher transaction fees. Services like Unisat, which allow batch minting and signing on-chain, involve some cognitive pitfalls. Many novice users only look at the system-recommended transaction fees but are unaware that a successful on-chain inscription transaction requires deductions from three parties, platform network data delays, and various lagging costs that result in estimation errors. Therefore, transaction fees must be at least 2–3 times higher, and there is no refund for wasted fees. Before BRC20’s market liquidity matures, the costs of arbitrary minting and deployment are far more significant than imagined. A consensus-driven market must have traffic and expectations to create room for growth.
Opinion: How can exchanges handle inscription tokens? Author: xiyu
Technically, it is straightforward. Users need to use transfer inscription parsing when depositing and withdrawing. Internal transactions occur within the liquidity pool, similar to many other alt transactions. Exchanges can fully use pbrc20 internally, as long as deposits and withdrawals return to brc20. This is a significant change for exchanges, and most centralized exchanges currently dare not make such a move, as it would affect their financial rules. From an interest perspective, except for attracting some traffic, existing meme exchanges do not have the motivation to implement BRC20, unless they set a new set of rules and redevelop. However, smaller exchanges will actively adopt it, as the “barefoot” are not afraid of the “shod.”
TechFlow: BSV community participates in Bitcoin Ordinals as well as BRC 20 deepest
The core wallet of BRC20, Unisat, is backed by a Chinese development team from the BSV ecosystem, which previously developed the Sensible Contract, a smart contract solution on BSV. The first BRC20 trading platform, Ordswap, is backed by a team that developed RelayX, the first decentralized exchange on the BSV network, and its founder was a former OKCoin executive. The Ordinals Wallet is backed by Twetch, a social application built on BSV.
Read the full article: https://www.techflowpost.com/article/detail_11854.html
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