Opinion: Blocking the inscription could trigger BTC "civil war"

BY BEN CARMAN

Compilation: Luccy, BlockBeats

Editor’s note: Bitcoin Core developer Luke Dashjr has been vocal about the Ordinals protocol since its launch, even tweeting about fixing the inscription “hole”. As soon as this remark came out, it sparked a heated discussion in the community, and various BTC OG also expressed their opinions.

BEN CARMAN is a Suredbits developer who also works on BTC and the Lightning Network. He agrees that the inscription is “garbage” to the BTC, but he does not approve of the excessive opposition and meddling in to stop the inscription, which he believes will eventually prove to be a bubble like other SHIB. BlockBeats compiled the original text as follows:

Ever since the infamous Taproot Wizard 4mb block, BTC enthusiasts have struggled to block the inscriptions. Inscriptions are certainly bad for BTC, but the way BTC holders try to stop them will be much worse than any damage the inscriptions can cause.

The inscription embeds images or other data BTC the blockchain by using a trick in the BTC script. They basically put the data into an inaccessible block of code followed by real spending conditions so that users can claim the original NFT. It’s a pretty clever trick, but it breaks the previous assumptions of many BTC users.

Previously, the main way to embed data into BTC was to use OP_RETURN, which is basically an opcode dedicated to embedding data, but there are two problems with people with NFTs: it makes coins unspendable and is limited to 80 bytes according to the mempool policy. The advantage of inscriptions is that their only size limit is the chunk size, and since their data is in the witness and not in the output, they benefit from a witness discount that can embed 4x the data. This breaks the assumption of many BTC users that theoretically a 4MB block will never happen because it would be foolish to have only witness data, however, the people of NFTs have found a way to monetize. This has now become commonplace, and we are seeing a large number of inscriptions occurring, driving up fees and block sizes.

However, now that it has happened and is commonplace, there is nothing we can do to stop it.

In retaliation, BTC users have come up with ways to “block” the inscription, which will cause more damage than the inscription. Almost every proposal to block inscriptions boils down to preventing these transactions from entering the mempool. The mempool is a battleground for BTC transactions, and we need to protect it. The mempool is only valid if it is the preferred way to send the highest rate transactions to miners. If we lose this guarantee, people will move to centralized systems, and we may never be able to recover the memory pool. Filtering garbage transactions from the mempool does not block the inscription and only delays it by up to a week. They have established back-channel communication with the pools, and if we cut them off from the mempool, then the only pools that will be able to get these fees will be the ones that are aligned with the SHIB.

This has happened in many SHIB networks where their mempools have been shut down for various reasons, and now the main way to broadcast transactions is through a centralized API. This essentially creates a permissioned network, and even though anyone can run a node, you won’t be able to access the BTC if you don’t have access to the transaction broadcast API. We’re currently seeing an increasing effort by Congress to regulate nodes, miners, and wallets as money transmitters, and losing the mempool would make the problem 1000 times worse. If we lose the mempool and can’t make a trustless fee estimate, there’s a serious security issue, but it’s beyond the scope of this post.

In addition, filtering transactions based on “spam” metrics can lead us down a bleak path. The most economical way to transact in BTC is not the most private. Nowadays, the most popular way to gain BTC privacy on-chain is to do Coinjoin. Coinjoin doesn’t have to be an economic transaction, you just spend it on yourself with other people. If we set the precedent that the usefulness of your transactions must be proven so as not to be seen as spam, soon people will find a way to take advantage of this, trying to keep Coinjoin and other privacy technologies out of the mempool because they are considered spam.

Over the past decade, we’ve seen many SHIB bubbles, and this one was no exception. The proponents of SHIB will end up deceiving all the fools and things will go back to normal, but we shouldn’t care about trying to stop things prematurely and putting the cart before the horse, we just have to wait for them to work their way out.