Bitcoiners have been bitterly debating the Ordinals phenomenon and the high volume of trading activity and congestion it has brought to the chain for months.
This is a very delicate conflict, and it is difficult to find the correct “ideological” response. I’m not going to give you a final answer here, as ultimately it’s up to the community as a whole. But hopefully we can all agree on some common ground rules that will help resolve the debate without descending into another war resulting in a bitter hard fork.
A story of free markets and a higher purpose.
The complexity of the debate lies in the cognitive dissonance that ordinal numbers cause within the Bitcoin community. It’s safe to say that Bitcoiners are very supportive of free markets, freedom, and financial freedom.
And on the one hand, ordinal numbers are the purest expression of free market will. If some people are okay with paying to trade with some clever token that pushes the capabilities of Bitcoin scripts to their limits, who’s to say this is wrong?
The basis of the Bitcoin network is the use of self-interested economic incentives to create positive outcomes for everyone: the creation of a value-neutral settlement and payment layer.
Miners make huge profits from Ordinal as one of the key pillars of Bitcoin.
There’s also no denying the long-term benefits that Ordinals and BRC-20 bring to your network.Ordinals managed to push up. ratio Fees as a percentage of overall miner revenue will increase to around 10%, similar to what was seen during the most active phase of the 2021 bull market.
While some Bitcoiners may choose to downplay this issue, the fact remains that without the rewards of mining, Bitcoin’s security is weak at best. So anything that can encourage usage of the Bitcoin blockchain is good for Bitcoin, right?
Of course, it’s not that simple. Ordinal numbers make it more expensive to use Bitcoin for payments and the transfer of value, which is what Bitcoin was designed for.
Some hardline Bitcoiners would probably have a heart attack if they saw the community embracing speculative trading of shitty coins as a “solution” to their security budget problems. And they’re not that wrong.
Bitcoin escapes the tyranny of central banks, gives everyone in the world the toughest money ever designed, and creates a neutral system that can be used by people regardless of their economic, geographic, or political background. It was born as a means to function as a layer. Speculative trading in shitcoin doesn’t exactly fit that noble purpose.
So, while ordinal numbers are probably a legitimate use of Bitcoin that fits with the free market-oriented principles shared by Bitcoiners, they ultimately prevent Bitcoin from achieving its true purpose. How can we reconcile this?
Is pragmatism the name of the game?
There are currently unresolved issues problem Bitcoin Core GitHub suggests treating ordinal numbers as a vulnerability in Bitcoin Core. The only appropriate response is to eradicate it in every way possible.
That’s certainly one way of thinking, but I think this approach is too arbitrary. Bitcoin is beautiful in its simplicity and robustness, and the community has understandably resisted meaningful changes to its fundamentals in recent years.
Ordinal numbers and BRC-20 are a bit of a trick, but still follow Bitcoin rules. They don’t pose as much of a risk to Bitcoin as the active traders of 2017, who caused the largest spike in Bitcoin fees ever. Even in spirit, they are not that different from the Omni Protocol, which used the OP_RETURN field to introduce tokens to Bitcoin (USDT is probably the most famous user).
The consensus of the Bitcoin community is that the majority of users should use L2 solutions to transact with BTC, and the main chain should be reserved for very high value and high cost uses. . After all, this is the only way to fit enough transaction fees into current block sizes to ensure long-term security budgets.
Once L2 is mass adopted, most of the Bitcoin network usage will be used as the data layer for these secondary protocols. I don’t think this is the worst thing in the world. And if I had to choose, I would choose Bitcoin as my go-to data availability solution for handling highly sensitive information. The future lies far ahead of customized solutions that rely heavily on the funding of a single development company.
But the key argument is that if changes need to be made to Bitcoin, they must be very slow and methodically calculated.
I understand the hostility towards the main uses of ordinals today, but ordinals are also very useful for non-speculative uses. Will definitely choose them to save WikiLeaks next.
There are also arguments for speculators. Without them, Bitcoin would not have reached the global popularity it has today. This always acts as a Trojan horse, a way to bootstrap the network effects needed to make money with Bitcoin globally.
Unless BRC-20 and Ordinal put Bitcoin in real danger, it needs to be given time to evolve and grow. This doesn’t mean you need to do anything at the network level to further support them. Very simply, if it works, don’t fix it. It’s just that something of real value might come out of this experiment.
This is a guest post by Robbie Greenfield. The opinions expressed are entirely their own and do not necessarily reflect the opinions of his BTC Inc or Bitcoin Magazine.
