• Ordinals and inscriptions are a made up way of tracking sats (fraction of Bitcoin) across transactions.
• Inscriptions are another made-up convention where sats can be inscribed with arbitrary content, a kind of Bitcoin-native digital artifact or NFT.
• The pro Ordinals and inscriptions case could broadly be understood as “Come for the fun, rich art, stay for the decentralized digital money.”
The Basics Of Ordinals And Inscriptions
Ordinals are a made up way of tracking sats (a fraction of a bitcoin) across transactions. It is a convention of numbering sats in the order they’re mined into existence and tracking them across transactions in a first in, first out (FIFO) method. An inscription is another made-up convention where sats can be inscribed with arbitrary content, a kind of Bitcoin-native digital artifact or NFT.
Benefits Of Ordinals And Inscriptions
The pro Ordinals and inscriptions case could broadly be understood as: “Come for the fun, rich art, stay for the decentralized digital money.” It could also be argued that it’s better than shitcoin NFTs because Bitcoin inscriptions are immutable, always on chain, simpler and more secure than shitcoin NFTs.
Concerns Raised With Inscriptions
The main concerns with Insciptions include reduced accessibility to transact on Bitcoin because of inscription/NFT degens creating a transaction backlog and paying lower fee per real byte due to witness discount; reduced ability for users to run full nodes because of increased storage & bandwidth requirements; also possibility of illegal material being recorded into blockchain discouraging some users from engaging with it.
Impact On Fungibility And Privacy
Ordinals do not meaningfully impact Bitcoin’s fungibility as it does not record any identifying information about individual transactions or coins used in them – thus preserving privacy & fungibility by design. This would mean that data cannot be used to link different types of coins together or associate users with certain coins/transactions which would otherwise compromise their anonymity & privacy settings.
In conclusion, while there may have been some disruption caused by the use of ordinal numbers and inscriptions recently – their underlying purpose does not meaningfully impact bitcoin’s fungibility nor does it significantly compromise user’s privacy settings when engaging with the network – making them an interesting development within cryptocurrency networks overall.