Everything Old Is New Again

This short article is included in Bitcoin Magazine’s “The Inscription Issue”. Click here to get your Annual Bitcoin Magazine Subscription.

Let me begin by acknowledging that Ordinals are remarkable! Ordinal Theory is a really creative technique of tokenizing private satoshis and Casey Rodarmor should have full marks and acknowledgment for gamifying the blockchain and Making Bitcoin Fun Again. For the very first time in the history of Bitcoin, we have NFTs on the heaviest proof-of-work chain, maintained indelibly permanently!

Okay, now that we got that out of the method, let’s dive into some “inconvenient” history. Ordinals was not the very first — vice versa. Tokens have actually existed on meta layers on top of the Bitcoin blockchain for a minimum of a years. Most have actually been flashes in the pan like Colored Coins; never ever rather introduced, like RGB; or under-the-radar this entire time, like Counterparty.

You might not have actually become aware of Counterparty — a shockingly high variety of Bitcoiners haven’t — which introduced in 2014 with a reasonable “proof-of-burn” that sent out 2,130 bitcoin to an irrecoverable burn address, however you might have become aware of Rare Pepe, an early, pioneering “tokenized art” collection on Bitcoin including 1,774 funny and dank works focusing on Pepe the Frog. RAREPEPE (Series 1, Card 1) typically described as the “Nakamoto Card” cost upwards of half a million dollars throughout peak NFT mania. Another card, HOMERPEPE (Series 2, Card 32) was most likely the very first considerable NFT sale ever at $38,000 in 2018 and after that again for $320,000 in early 2021.

Oh, did I discuss I am an initial Rare Pepe artist? I sent a piece entitled CHAMPAGNETNT (Series 25, Card 38) that satirized the then-current ICO boom, and ultimate bust. The excellent feature of the Rare Pepe collection is that it serves as an illustrative time pill of what was occurring in Bitcoin (and crypto) throughout the 2016-2018 period, warts and all. But this was all before 2021, before NFTs went bananas, so there actually wasn’t much speculation or expectation of revenue. It was simply a lot of men (primarily men) hanging out on Telegram and making dank art to show good friends. I distributed half the supply of my card without even thinking if it might be worth something “someday”.

Click the image above to subscribe!

Let’s avoid forward a couple of years. It’s early 2023 and Ordinals is making waves as the glossy new thing. What makes Ordinals book? A smart technique of FIFO (initially in; initially out) accounting, which reimagines waves of satoshis as private, trackable particles. It’s an abstraction, since satoshis don’t actually exist as private, non-fungible systems. But if everybody settles on the FIFO accounting technique, we can all jointly think that they exist and for that reason they do! The wave-function collapses thanks to the observer impact of Ordinal Theory. And once they exist, we can also pretend that owning a specific one refers ownership of a specific engraving on the blockchain, similar to a star pc registry offers you a claim on some remote sun. Ordinal Theory is a lens through which to see the blockchain in fascinating new methods. It’s like magic!

So when I initially learnt about Ordinal Theory I was entirely blown away. I constantly believed, “Well you can’t just manifest something new into existence simply by claiming it to exist using an arbitrary counting method completely extrinsic to the system itself”. But obviously you can! The synthetic walls in my mind that had actually been developed around “crazy ideas that could never work” unexpectedly disappeared and I might see a clear course in front of me: I can comprise things too! And that’s how Bitcoin Stamps was born. Well, not precisely. Ideas are a penny a lots, however the application of a concept is actually what brings it to life. I’ve had the advantage of dealing with some excellent coders and engineers that have actually been essential in introducing and developing the Bitcoin Stamps procedure: Kevin, Arwyn, Regan, B0B Smith, and numerous others. We were also lucky sufficient to take advantage of the decade-old Counterparty procedure, preserved through numerous lean years by stalwarts like JDog and Joe Looney, to rapidly bootstrap Bitcoin Stamps.

So just what is a Bitcoin Stamp? Well, it’s Secure Tradable Art Maintained Permanently.

Essentially, an image file, like a JPEG or GIF, is transformed into a long Base64 string — Base64 is an approach to encode binary information as text — that’s added to the URI (Uniform Resource Identifier) “stamp”: and put in the description field of a Counterparty deal. Explorers and wallets transform these long Base64 strings back into viewable images.

Here is the Base64-encoded string of the really first Bitcoin Stamp (#0):

stamp:iVBORw0KGgoAAAANSUhEUgAAAAUAAAAFCAYAAACNbyblAAAAHElEQVQI12P4//8/w38GIAXDIBKE0DHxgljNBAAO9TXL0Y4OHwAAAABJRU5ErkJggg==

A huge selling point for Bitcoin Stamps is the conservation of information when minted on the blockchain. How is this perseverance of information attained? The method Counterparty generally runs is to encode information into a deal’s OP_RETURN. OP_RETURN’s are restricted to 80 bytes which is rather limiting from a “storage” point of view. However, OP_RETURN works well for standard NFTs that utilize an HTTPS guideline to a resource on a third-party server like AWS. Commonly, when you inform individuals the art isn’t really “on chain” it’s like informing them Santa Claus does not exist. Alas, it’s true: The huge bulk of NFTs throughout the years are simple tips to off-chain art that makes them really vulnerable to bit-rot. When the AWS costs stops earning money, the art is gone permanently.

There is another method, nevertheless, to encode bigger quantities of information utilizing a requirement Counterparty deal: bare multisig encoding. Essentially, when a deal’s information goes beyond 80 bytes, Counterparty rather pieces and encodes that information into a bare multisig’s key-strings, utilizing a 1-of-3 quorum where 2 of the 3 secrets are made use of to save information in a tricky style. The one real redemption type in the multisig that can invest the outputs is a burner: The artist does not really have control of a matching personal secret. We call this method KeyBurn as it makes sure that the information saved within the UTXO set cannot be gotten rid of through costs.

Bitcoin Stamps occur to be exceptionally SIGOPS (Signature Operations) heavy as an outcome of how the information is saved. Typical deals do not consist of numerous SIGOPS, which has actually led some mining swimming pools to cut corners throughout the years, and not count them when consisting of deals in a prospect block. Everyone knows the block size limitation, however did you understand there is an 80,000-SIGOPS limitation per block too? I didn’t! I discovered this out when news initially broke that F2Pool had actually developed a void block that got turned down by the network for surpassing the SIGOPS limitation due to all the Stamp deals in it, which were connected to really juicy mining costs. Expensive error! Then they did it again quickly after. That’s 6.25 BTC lost two times, not consisting of deal costs.

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

How does this vary from Ordinal engravings? Well, I like to state that Rodarmor developed the most accountable service for engraving information on-chain by positioning it in the SegWit witness information structure. This is an information structure that’s been created with optionality in mind: Don’t desire it? That’s fine, when your node verifies the signatures, the information can be quickly disposed of. In reality, anything before an “Assume Valid”-significant block doesn’t require to be downloaded at all! Inscriptions are created to appreciate the dreams of node runners, and what did Rodarmor get for being so thoughtful?

OUTRAGE! HOW DARE YOU SAVE YOUR JPEGS ON MY NODE!

Bitcoin Stamps takes a various, much less respectful, method. The information encoded in the bare-multisig is not just kept in blocks, however also in the UTXO set as unspent outputs. This information is far more hard to “prune” as every node, by default, preserves a complete copy of the UTXO set. So while engravings are saved in a blockchain-adjacent information structure called “the witness” which, by style, makes pruning simple, Bitcoin Stamps are saved in real blocks in the canonical Blockchain information structure in addition to the UTXO set kept in memory by every node.

Here’s how it breaks down:

Ordinal Inscriptions: saved by post-SegWit, complete archival nodes just. Pre-SegWit nodes will never ever understand that your stunning JPEGs even exist. Sad.

Bitcoin Stamps: saved by every node. Period. Pre-SegWit nodes. Post-SegWit nodes. Full Archival Nodes. Pruned SPV nodes. They all get the Bitcoin Stamps. ALL NODES MATTER.

I like to make this example: Ordinal engravings resemble drawing with chalk on a walkway on a warm day. Bitcoin Stamps resembles spraying graffiti on the walkway. It’s really impolite and antisocial. It’s also really difficult to get rid of.

Now you might be questioning: This sounds too excellent to be real, Mike, what’s the catch?

Well, there is a catch: Permanent storage on the blockchain is not low-cost. Bitcoin Stamps do not use witness information so they don’t take advantage of the witness discount rate. As a guideline, Bitcoin Stamps expense a minimum of 4 times what Ordinals expense to engrave. But hey, you get what you spend for, amirite? And before you implicate me of fear-mongering, there have actually been really genuine conversations by different core factors about altering the IBD (preliminary block download) default in Bitcoin Core so that freshly spun-up nodes never ever see your JPEGs in the very first location.

As I compose this, Luke Dashjr’s OCEAN mining swimming pool has actually simply introduced to much excitement, and it appears that they are intentionally not communicating information after OP_FALSE as a method of censoring Ordinal engravings.

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

And while there are some theoretical techniques of pruning Bitcoin Stamps out of the UTXO set, like UTreeXO, they are much more intrusive than disposing of witness information and feature their own compromises for full-node operators. Ordinals, magnanimously, make pruning simple while Bitcoin Stamps make it really hard.

Bitcoin Stamps are a lot more pricey to mint than Ordinals however we’ve discovered that restraints can produce excellent art. In the words of Leonardo da Vinci: “Art lives from constraints and dies from freedom.” The artist neighborhood that’s sprung-up around Bitcoin Stamps tend to gravitate towards pixel and SVG art since they compress far more effectively than raster art, for absence of a much better term.

The size/cost restraint has also caused more current development through recursion where a JSON file is minted that indicate a variety of formerly minted stamp “traits”. By repurposing these “traits”, the expense of a big collection is reduced a number of orders of magnitude by removing away the redundant information throughout a collection. Audio Stamps that mint just a tune’s notes (comparable to old-school MIDI format) and AI Stamps that mint just a generative seed timely are extra ingenious techniques that work around the restraints and provide unique outcomes.

You desire fungible degen tokens? Yeah, we got those too in the type of SRC-20.

Want to get associated with Bitcoin Stamps either as an artist, designer, or collector?

There’s a flourishing Telegram neighborhood loaded with individuals pleased to respond to any concerns you might have, discovered here: t.me/BitcoinStamps

Here are some links to the ever-growing Bitcoin Stamps environment: