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Edited by Kapil334 at 22-12-2023 05:15 AM
The inscription asset of BTC is issued and operated based on on-chain information + index specifications. The Bitcoin Taproot upgrade provides objective technical support for the birth of inscription assets.
Currently, mainstream Bitcoin inscription protocols include the Ordinals protocol, Atomicals protocol, Pipe protocol, and Runes protocol. The creation of Bitcoin inscriptions has many positive implications, but it has also been controversial due to the congestion of spam transactions clogging the Bitcoin network.
What is Bitcoin Incognito? Inscription assets refer to virtual assets created by recording information in a specified format on BTC (or other blockchains) and then converting the on-chain formatted accounting information into virtual assets through specific index protocols. These assets can be fungible assets (such as BRC20 assets) or non-fungible assets (such as NFT-like assets like Bitcoin Frogs). Unlike Ethereum, where asset issuance and operation are based on smart contracts, Bitcoin's inscription assets are issued and operated based on on-chain information + index specifications.
Why did Bitcoin Incognito emerge and explode this year? For Bitcoin, its main use in the past has been to record transfer transactions on the network. However, after the Taproot upgrade completed in November 2021, Bitcoin as a public ledger provided more efficient data storage capacity, allowing lower-cost uploading of text and multimedia content. This laid the technical foundation for inscription assets.
Development History of the Bitcoin Incognito Ecosystem:
- In late 2022, Bitcoin core contributor Casey Rodarmor created the Ordinals protocol, introducing the concepts of Ordinals and Inscriptions, giving rise to the first NFT on the Bitcoin network. The NFT protocol ""Ordinals"" allows users to create Bitcoin versions of NFTs, described as ""digital artifacts"" on the Bitcoin network, supporting JPEG images, PDFs, videos, or audio formats.
- On March 8, 2023, an anonymous developer named @domodata launched BRC-20 based on the Ordinals protocol, and the hype of Meme tokens in the Bitcoin ecosystem entered the fast lane. Another anonymous developer introduced the Atomicals Protocol in September, and shortly after, on September 26, Casey created a fungible token protocol based on Bitcoin called Runes.
- Since the introduction of BRC-20, BRC-20 transactions have occupied the majority of the Ordinals protocol. Subsequently, community developer Beny introduced various tools and improved versions of BRC-20, such as LooksOrdinal (no tokens), the BRC-20 improvement Tap Protocol for OrdFi, and the improved version of Pipe for Runes.
Technical Principles of Mainstream Bitcoin Incognito Protocols:
- Ordinals: Inscription content is entirely on-chain, stored in the spend scripts of the taproot script-path, and taproot scripts have minimal restrictions on content storage, providing relatively economical storage of inscription content. Ordinals Inscription is essentially a simple accounting layer built on the Bitcoin network using a tapscript that will never be executed, counting and recording assets and data.
- BRC 20 (Based on Ordinals): BRC-20 transactions do not execute on the BTC main chain directly and must be split into two BTC transactions (i.e., first collect and then transfer) in a sorting mechanism. This additional complexity leads to a large number of spam transactions and makes it less acceptable to the entire BTC community compared to Ordinals.
- Atomicals Protocol: Atomicals is another derivative protocol that engraves data on UTXO to implement Token. Unlike Ordinals, initially designed for NFTs, Atomicals rethinks how to distribute tokens on BTC in a decentralized, tamper-resistant, and fair manner.
- Rune & Pipe: Rune's design is influenced by Atomicals and writes Token data directly into the UTXO script, including Token ID, output, and quantity. Rune's implementation is very similar to Atomicals, transferring tokens directly on the BTC mainnet. The difference is that Rune writes the quantity of tokens in the script data, giving it higher precision than Atomicals.
Potential Impact of Bitcoin Incognito on Bitcoin:
In the short term, the hype of inscription tokens has boosted the prosperity of the Bitcoin ecosystem, making network transactions more active, significantly increasing miner transaction fees, and temporarily solving concerns about the massive loss of miners due to the reduction of Bitcoin rewards. Alongside the influx of various Bitcoin protocols, many speculators have entered to capitalize on the rising trend of Bitcoin. However, many Bitcoin inscription tokens currently lack practical value, and speculation is relatively high, leading to network congestion due to spam transactions and increasing skepticism.
Note: Some details of the protocols and developments mentioned in the Chinese text may have been simplified or paraphrased for clarity and brevity in the English translation. |
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Post time 8-12-2023 13:10:48