everything old is new again

This article was published in Bitcoin Magazine “Inscription problem”.click here To get an annual subscription to Bitcoin Magazine,

Let’s start by admitting that Ordinals is great. Ordinal Theory is a very clever way to tokenize individual Satoshis, and Casey Rodarmor deserves high praise and recognition for gamifying blockchain and making Bitcoin fun again. For the first time in Bitcoin history, NFTs will be added to the heaviest proof-of-work chain and will be stored indelibly.

Okay, now that we’ve got that out of the way, let’s dig into the “inconvenient” history. Ordinals wasn’t the first. Tokens have existed in a meta layer on the Bitcoin blockchain for at least a decade. Most were flashes like colored coins. It was never fully released like RGB. Or, like Counterparty, it’s much more under the radar.

You may have never heard of Counterparty (a surprising number of Bitcoin users have not). You may have heard of Rare Pepe, although Counterparty was launched in 2014 and has done quite a bit of “proof-of-burn” by sending 2,130 Bitcoins to an irrecoverably burnt address. . , an early and pioneering collection of “tokenized art” about Bitcoin, consisting of 1,774 of his cheerful and dank works revolving around Pepe the Frog. RAREPEPE (Series 1, Card 1), commonly referred to as the “Nakamoto Card,” sold for over $500,000 at the peak of NFT mania. Another card, HOMERPEPE (Series 2, Card 32), had perhaps the first ever significant NFT sale in 2018 for $38,000 and then again in early 2021 for $320,000.

Oh, and did I mention I’m the original Rare Pepe artist? I posted a piece titled CHAMPAGNETNT (Series 25, Card 38), which poked fun at the ICO boom and eventual bust of the time It was something. The great thing about the Rare Pepe collection is that it acts as a time capsule showing what was happening with Bitcoin (and cryptocurrencies) and everything else in the 2016 to 2018 era. But this was all before 2021, before NFTs were all the rage, so there wasn’t really much speculation or hope of profit. It was just a bunch of guys (mostly guys) hanging out on Telegram and creating dank art to share with their friends. I gave away half of my cards without even thinking about whether they would be worth anything “someday”.

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Let’s skip ahead a few years. In early 2023, Ordinals is making waves as a shiny new product. What’s new about Ordinals? A clever take on FIFO (first in, first out) accounting that reimagines Satoshi’s waves as individual trackable particles. This is an abstraction because Satoshi does not actually exist as a separate, non-fungible unit. But if everyone agrees with his FIFO accounting method, then everyone can collectively believe that FIFO exists, and that it actually exists. The wave function collapses thanks to the observer effect of order theory. And when they exist, they act as if owning a particular thing corresponds to ownership of a particular inscription on the blockchain, just as a star registry gives rights to a distant sun. can also do. Ordinal Theory is a lens for looking at blockchain in interesting new ways. It’s like magic!

So when I first learned about order theory, I was completely shocked. I always thought. “You cannot bring something new into existence simply by claiming that it exists using some arbitrary counting method that is completely independent of the system itself.” But apparently you can! The artificial walls of my mind that had been built around “crazy ideas that would never come true” suddenly disappeared and I saw a clear path in front of me. This is how Bitcoin Stamp was born. Well, not exactly. An idea is just a dime, but to make it a reality, you have to implement it. I had the opportunity to work with some of the great programmers and engineers who were integral to the launch and evolution of the Bitcoin Stamp protocol: Kevin, Irwin, Regan, B0B Smith, and many others. We’re also fortunate that his decade-old counterpart, which has been maintained over the years by heavyweights like JDog and Joe Looney, leverages his protocol to quickly bootstrap Bitcoin Stamp. I was able to.

So what exactly is a Bitcoin stamp? Well, it’s a secure tradable art that will last forever.

Basically, image files such as JPEGs and GIFs are converted to long Base64 strings. Base64 is a way to encode binary data as printable text. Added to the URI (Uniform Resource Identifier) ”stamp” and counterparty transaction description field. Explorer and Wallet convert these long Base64 strings into viewable images.

Below is the Base64 encoded string for the first Bitcoin stamp (#0).

Stamp:iVBORw0KGgoAAAANSUhEUgAAAAUAAAFCAYAAACNbyblAAAAHelEQVQI12P4//8/w38GIAXDIBKE0DHxgljNBAAO9TXL0Y4OHwAAAABJRU5ErkJggg==

The big selling point of Bitcoin Stamp is that once the data is created on the blockchain, it is stored. How is this data persistence achieved? The normal way counterparties work is to encode the data into the transaction’s OP_RETURN. OP_RETURN is limited to 80 bytes, which is very restrictive from a “storage” perspective. However, OP_RETURN works well for traditional NFTs that use HTTPS pointers to resources on third-party servers such as AWS. In general, telling people that art isn’t actually “chained” is like saying Santa Claus doesn’t exist. Alas, it’s true. The majority of NFTs over the years have been simply pointers to off-chain art, making them highly susceptible to bit-corruption. If AWS fees are no longer paid, the art is lost forever.

However, there is another way to encode large amounts of data using standard counterparty transactions: bare multisig encoding. Essentially, when a transaction’s data exceeds 80 bytes, the counterparty instead chunks and encodes that data into a bare multisig key string. In a 1-of-3 quorum, two of the three keys are used to covertly store data. The one real redemption key within multisig that can use the output is the burner. Artists actually have no control over the corresponding private keys. He calls this technique KeyBurn because it ensures that the data stored within the UTXO set is not deleted upon consumption.

Bitcoin Stamps are very SIGOPS (signature operations) heavy as a result of the way the data is stored. Because a typical transaction doesn’t contain that many SIGOPS, some mining pools have cut corners over the years and not counted SIGOPS when including transactions in candidate blocks. We all know about block size limits, but did you know there’s a limit of 80,000-SIGOPS per block? I didn’t! I learned this because F2Pool created an invalid block and all the stamp transactions in that block were associated with very high mining fees, which exceeded the SIGOPS limit and were rejected by the network. That’s when the news first broke. An expensive mistake! Then they quickly did it again. This means he lost 6.25 BTC twice, excluding transaction fees.

sauce: https://twitter.com/0xB10C/status/1643871608401014785

How is this different from an ordinary inscription? Now, what I want to say is that Rodarmor has come up with the most reliable solution to write data on-chain by putting it in a SegWit Witness data structure. This is a data structure designed with options in mind. Don’t need it? No problem. Once the node verifies the signature, the data can be easily discarded. In fact, you don’t need to download anything prior to the block marked “Assume Valid” at all. The inscription is designed to honor Nordrunner’s wishes, but what did Rodalmor gain from his kindness?

Outrage! How dare I save a JPEG to my node!

Bitcoin Stamps takes a different, far less polite approach. Bare multisig encoded data is not only kept in blocks, but also in UTXO sets as unused outputs. By default, every node maintains a complete copy of the UTXO set, making it very difficult to “prune” this data. Thus, while inscriptions are stored in blockchain-adjacent data structures called “witnesses,” which by design make pruning easier, Bitcoin stamps can be stored with actual blocks within the canonical blockchain data structure, Stored in a UTXO set that all users keep in memory. node.

The breakdown is as follows:

Ordinal Inscriptions: Stored only by full archive nodes after SegWit. Pre-SegWit nodes don’t even know that beautiful JPEGs exist. sad.

Bitcoin Stamp: Saved by every node. period. Pre-SegWit node. Node after SegWit. Complete archive node. Pruned SPV node. Everyone gets Bitcoin stamps. Every node is important.

I would like to use this analogy. An ordinary inscription is like drawing with chalk on a sidewalk on a sunny day. Bitcoin stamps are like spray-painting graffiti on the sidewalk. It’s extremely rude and anti-social. It is also very difficult to remove.

Now, you may be wondering: This sounds too good to be true, Mike, so what’s the catch?

Well, there’s a catch. Permanent storage on blockchain is not cheap. Bitcoin Stamp does not use witness data and therefore does not benefit from witness discounts. As a rule of thumb, Bitcoin stamps cost at least four times what Ordinals stamps cost. But hey, you get what you pay for. amirite? And before you accuse me of fear mongering, I would like to change the IBD (Initial Block Download) default in Bitcoin Core so that newly spun up nodes never recognize JPEGs from the beginning.? There have been very real discussions by various core contributors about what to do.

As I write this, Luke Dashjr’s OCEAN mining pool has just been launched with much fanfare, and it appears they are intentionally not relaying data beyond OP_FALSE as a means of censoring the Ordinal inscription. is.

Source: https://twitter.com/oomahq/status/1729689197974319549

Also, while there are some theoretical ways to remove Bitcoin stamps from the UTXO set, such as UTreeXO, they are far more invasive than discarding witness data and come with their own trade-offs for full-node operators. Masu. Ordinal numbers make pruning mildly easy, but Bitcoin stamps make it extremely difficult.

Bitcoin Stamps cost much more to mint than Ordinal, but it turns out that constraints can make for great art. In the words of Leonardo da Vinci:Art lives within constraints and dies within freedom. ” The artist community that sprang up around Bitcoin stamps tends to gravitate towards pixel art and SVG art. This is because pixel art and SVG art can be compressed much more efficiently than raster art. There is no better way to describe it.

Size/cost constraints have also led to recent innovations with recursion, where a JSON file is created that points to the “properties” of a number of previously created stamps. Reusing these “traits” removes redundant data throughout the collection, reducing costs for large collections by orders of magnitude. Audio stamps, which create only the notes of a song (similar to old-school MIDI formats), and AI stamps, which create only generative seed prompts, are additional innovative ways to circumvent constraints and deliver novel results.

Want a fungible degen token? Yes, we got that too in the form of SRC-20.

Interested in joining Bitcoin Stamps as an artist, developer, or collector?

We have an active Telegram community of people willing to answer all your questions: t.me/BitcoinStamps

Here are some links to the ever-growing Bitcoin stamp ecosystem.