Ordinals have been in the spotlight for two weeks. This project makes it possible to create NFTs, called inscriptions, on the Bitcoin blockchain. What results after three weeks?
Ordinals fill the mempool
The ordinals are a project allowing to link arbitrary data (Jpegs) to a satoshi. This docking is done via “registrations” inside a BTC transaction. These inscriptions are similar to NFTs.
We are only at the very beginning since the program allowing to create these inscriptions (order) is dated January 20. Go to Explorer ordinals.com to observe this great art.
It is still too early to predict whether ordinals have a future. Probably not seen that trading volumes and NFT prices crashing.
Nevertheless, more than 73,000 ordinals have already been registered. And the impact on the Bitcoin blockchain is not insignificant. Hence the numerous and contrasting reactions to this novelty.
The first effect of ordinals is the growth of mempool “. This is the virtual waiting room of transactions waiting to be validated in a block by miners.
The graph above shows that the number of unconfirmed transactions is increasing sharply. There are so many that we have already reached the maximum capacity of the mempool (300 MB).
Pending transactions are colored according to the amount of fees they pay in vBytes (sat/vB). vBytes are “virtual bytes” or, in French, virtual bytes.
Why are we talking about virtual bytes rather than just bytes? Transaction and block sizes were measured in ordinary bytes before SegWit. Since then, virtual bytes and weight units (WU) have been designed to quadruple block size while remaining backwards compatible with the 1MB per block rule.
Clearly, since SegWit (segregated Witness), it is possible to create blocks of 4 MB by segregating part of the transaction data in a section (the witness) which is not taken into account by the nodes not having adopted SegWit and for whom the block must not exceed 1 MB.
[La taille des blocs SegWit est limitée à 4 000 000 WU (ou 1 000 000 vB puisque 1 vB = 4 WU).]
Block size inflation
Ordinals take advantage of the fact that blocks are rarely filled. Although the official maximum block size is 1 MB, the SegWit update pushes this limit to 4 MB. The “witness” section also offers the possibility of integrating arbitrary data.
The Taproot update, on the other hand, makes it possible to create extremely large single transactions (typically, ordinals) inexpensively. That being said, the larger a transaction is, the more charges it has to pay in the event of a traffic jam.
In other words, an influx of normal transactions into the mempool would force transactions containing ordinals to pay fees proportional to their size. But the fact is that there is quite a lot of free space.
Before the launch of the ordinals, the largest block ever produced was 2.4 MB. Record broken on February 1 by the luxor pool by mining a block of 3.96 MB (almost reaching the 4 MB ceiling). This block contained 3.91 MB of data, including the now famous Taproot Wizard.
It’s very simple, the average block size has increased from 1.5 MB to more than 3 MB since the launch of ordinals. And as Riot VP Pierre Rochard points out, ordinal registrations now represent 40% of the one million vbyte limit:
A black market for block space?
This growing volume of pending transaction data in the mempool should have caused transaction fees to rise. But this is not what we observe, or very little. The number of satoshis paid by vByte remains very stable.
Moreover, NYDIG notes in its weekly letter that the Taproot Wizard transaction almost filled a block completely without any fees associated with it.
The answer is direct coordination with a minor… Indeed, “transactions exceeding 100,000 vBytes are considered non-standard and will not be mined”says NYDIG. “These transactions, however, can be undermined if directly coordinated with a miner.”
This was the case of the Taproot Wizard which was inserted into a block mined by the Luxor mining pool. The CEO of Luxor seems to smell a good vein:
https://twitter.com/hash_bender/status/1624276972846350338
https://twitter.com/hash_bender/status/1624529320994820096
Luxor hopes that the Ponzian mayonnaise of ordinals will take to sell block space to those who will want to create ordinals larger than 100,000 vbytes. Such transactions will pay off-chain…
Ordisrespector
In summary, ordinals are JPEGs that unnecessarily fatten the blockchain at little cost. Luxor seems to be hoping that some will go so far as to pay them to list ordinals that exceed the 100,000 vbyte limit. The most “rare”…
But will the pools driving this block space traffic share this financial windfall with the pool member miners?…
In the meantime, Riot’s VP has dotted the I’s in the microphone from @PrestonPysh:
“The view that block space is a neutral data layer. That we should be agnostic about the data that fits in there, and let the blocks be a free market, is totally wrong. »
Ultimately, bitcoin was designed to move 21 million BTC without permission. It’s not Amazon’s cloud. Its role is not to store gigas of arbitrary data.
A filter for nodes not wishing to allocate disk space to ordinals is already circulating. The patch comes from Luke Dash /Satoshi:23.1.0/Ordisrespector/
Be an ordisrespector.
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