Proposed and developed by Casey Rodarmor, Bitcoin Ordinals, which are similar to NFTs, refer to digital assets inscribed on the smallest BTC unit, satoshi (SAT). The process of inscribing digital assets on satoshis (SATs) can be attributed to an upgrade on the Bitcoin network called Taproot in November 2021.
Once you understand inscriptions, we can then talk about recursive inscriptions, which allow users to call for data from existing inscriptions — providing a way for developers to break the 4MB block limit on the Bitcoin network. Think of it like having software spread across a number of CD-Roms or flash drives — except they’re all plugged in at once and can reference each other.
Bitcoin ordinals and recursive inscriptions are, at the very least, controversial. Conservatives are not fond of these new technologies amid concerns that they are burdening an already congested network.
On the other hand, developers and enthusiasts receptive to the technologies believe they elevate the Bitcoin network to be competitive in the dynamic crypto industry — and allow BTC to do far more than operate as a currency or store of value.
This article will discuss several aspects of Bitcoin ordinals, recursive inscriptions, and why investors and developers should pay attention to them.
5 Things to Know About Bitcoin Ordinals and Recursive Inscriptions
1. Bitcoin Ordinals Bring NFTs to The Bitcoin Ecosystem
Prior to the introduction of Bitcoin ordinals, NFTs were a preserve of building platforms like Ethereum, Solana, Cardano, and the Binance Smart Chain among others.
Many people refer to Bitcoin ordinals as NFTs on the Bitcoin blockchain, however, according to Rodarmor, the former differs slightly because, unlike NFTs, their data is inscribed on-chain — making them complete digital assets. It is impossible to alter any files or artifacts inscribed on the Bitcoin blockchain because they are stored on-chain.
The developers describe Bitcoin ordinals as digital artifacts and not directly as NFTs. They rely on the primary blockchain on which they are inscribed and not a sidechain or a separate token.
Nonetheless, Bitcoin ordinals bring additional functionalities to the Bitcoin network, making it possible to mint Bitcoin NFTs directly onto the blockchain. After the transaction has been completed successfully, the inscribed data permanently becomes part of the Bitcoin blockchain and will be viewable or accessible via Bitcoin wallets that are ordinal-enabled. Online ordinals viewers can also be used.
2. Bitcoin Ordinals vs Bitcoin Stamps
Bitcoin Stamps refer to ‘Bitcoin Secure Tradeable Art Maintained Securely.’ They are essentially digital collectibles that are stored directly on the Bitcoin network. A glimpse into their history reveals that they originally used Counterparty protocol. This network can convert images into encoded files which can then be broadcast to the Bitcoin blockchain.
Bitcoin Stamps are different from Bitcoin ordinals and other tokens because they are stored in unspent transaction outputs (UTXOs). Think of these transactions as the change you get after breaking a larger bill.
Note that Bitcoin Stamps tend to attract higher transaction fees compared to other tokens. However, they stand out because they allow for minting of larger quantities. Like ordinals, they face criticism over their impact on the network’s block size and transaction fees.
The sole purpose of Bitcoin Stamps is to create and store items on the Bitcoin blockchain. Due to the way they are created using UTXOs, they cannot be pruned.
Unlike Stamps, ordinals can be pruned by nodes that remove old witness data.
3. Recursive Inscription Enable 3D Games on Bitcoin And Much More
2023 has most certainly been a game changer for the Bitcoin network, thanks to developers like Rodarmor who are not afraid to push the limits. The goal for these developers is to achieve mainstream adoption for the largest blockchain not only as a store of value but also as a competitive platform — a canvas for innovation and self-expression.
The introduction of ordinals, which gave artists the ability to tokenize and authenticate their works on Bitcoin’s immutable blockchain, ushered in the era of recursive inscriptions to allow data exceeding Bitcoin’s original 4MB block size limit.
Rodarmor fronted recursive inscriptions as a solution to the block space limit on the Bitcoin blockchain to allow the creation of extremely complex data structures stored on the network.
Recursive inscriptions function by creating a chain of inscriptions, each calling data from existing inscriptions. This method supports the creation of complex data structures that can get arbitrarily large because each inscription can point data to a future inscription, thus surpassing the 4MB limit on every inscription.
Recursive Inscriptions 101
A recursive inscription calls data from prior inscriptions. Could be an image or some script which massively saves data/fees
Brandon Marshall (@marshallmixing) tweeted about his website that uses recursive inscriptions
Sounds complicated? Nah,… pic.twitter.com/K3j3sBYNrK
— Doggfather (@DoggfatherCrew) June 13, 2023
Ultimately, recursive inscriptions have made it possible for developers to consider hosting large amounts of data supporting features like 3D games, videos, music, and books, among others.
Before ordinals and recursive inscriptions, the Bitcoin blockchain served basic purposes like transactions and storing value. The blockchain could only support simple files of not more than 4MB data, locking out complex 3D video games that come with higher quality graphics and a more immersive experience — essentially what the gaming community expects.
The impact of recursive inscriptions is expected to be enormous and advance Bitcoin use cases to 3D video games and bring to life ebooks, music videos, and large data sets for real-world assets (RWA) just to mention a few.
4. Not Everyone is Convinced
The community is divided now more than ever on the developments of these new technologies and whether they should be allowed, or shelved to save the sanctity of the Bitcoin blockchain.
Some are also concerned that continued adoption promoting additional developments could further clog an already congested network, making it expensive for people who simply want to use the blockchain for value transfer.
There are apprehensions that these additional technologies, relying on the Bitcoin blockchain could harm marginalized people who rely on the network for their day-to-day survival. Many marginalized communities in developing countries rely on Bitcoin to receive and send money, as well as receive aid. An expensive network could disrupt the lives of these communities.
Marginalized peoples in developing countries will have to pay more to run their Bitcoin nodes and send transactions because privileged wealthy whites want to put JPEG drawings on the blockchain as status symbols. Just because you can doesn’t mean you should.
— Bitcoin is Saving (@BitcoinIsSaving) January 29, 2023
According to the ordinals creator Rodarmor, Satoshi in the Bitcoin script intended the blockchain to support up to 4.3 GB of data stating that he “wanted to design it (Bitcoin) to support every possible transaction type I could think of.”
You could have done 4 gig OP_RETURN inscriptions in Satoshi's original client.
— Casey (@rodarmor) May 29, 2023
However, the implementation of the “IsStandard” in 2010 by Satoshi himself only supported a few transaction types, limiting the block size to 4MB with the possibility of new data types gaining adoption and being whitelisted in the future.
5. Layer-2s Can Help With Speed
According to Neil Jacobs, a Bitcoiner and the co-founder of FOMO21Shop, the emergence of layer-2 blockchains could help to remove the transaction pressure on the blockchain as they support more transactions at significantly low fees. Moreover, the community cannot ignore the impact of Lightning networks which increase transaction throughput and lower transaction fees.
Ultimately, L2s are being built out in part do to the anticipation that the fee market would be robust and small transactions wouldn’t be practical on the base layer anyway. As far as too costly to run a node, I’m not sure how large of an impact it will have. Time will tell.
— Neil Jacobs (@NeilJacobs) January 29, 2023
The Bitcoin ordinals protocol has been in existence for about 10 months since its inception in January 2023 while recursive inscriptions are only a few months old.
The Ethereum network has grown over the years to become what it is today — the largest smart contracts platform supporting many DeFi ecosystems.
Hence, developers who are eager to push for an advanced Bitcoin blockchain argue that new technologies should be allowed to go through all the development stages and evolve as opposed to stifling innovation.
The idea of watching a music video, immersing yourself in an expansive metaverse world, or a 3D video game hosted on the Bitcoin blockchain is tantalizing at the very least.
Developers who dare to dream believe that all these features and much more are possible. The Bitcoin blockchain remains the strongest immutable network in the crypto industry. If adopted, it could help to reduce the impact of hack attacks in the decentralized finance (DeFi) sector, which continues to rob investors of their hard-earned money while jeopardizing the future of merging digital sectors.
Further studies and developments are required to advance these ideas and learn their overall impact on the Bitcoin blockchain. The community should focus on gradual development and adoption to support innovation while ensuring that the network is not clogged.