Still no consensus on the “inscriptions” issue. Meanwhile, Bitcoin’s decentralization continues to diminish day by day. What’s the problem?
We recently wrote about the criticism faced by Bitcoin Core developers. Finally, one of them has broken the silence on Peter McCormack’s podcast, What Bitcoin Did.
But before diving into that, let’s recap what we’re talking about. Inscriptions are arbitrary data external to the Bitcoin protocol. The most well-known are called “ordinals.” These are image files (JPEGs) inserted into a Bitcoin transaction, disguised as a public key.
The “ordinal theory” is a convention also external to the Bitcoin protocol. It allows for a conceptual mapping of ordinals through a virtual numbering of satoshis. The goal is to keep track of the ordinals from one transaction to another (proof of ownership).
These inscriptions are widely criticized and often described as scams that undermine the network’s decentralization. They must also be considered an attack.
On one hand, we have ordinals (very large JPEGs) that have the detrimental effect of inflating the blockchain’s size. Today, it takes at least 600 GB of memory to run a full node.
And on the other hand, even more toxic inscriptions, the “STAMPS,” which generate phenomenal amounts of UTXOs. UTXOs are small pieces of code that mathematically link your bitcoins to your BTC addresses (your public keys).
The number of UTXOs has more than doubled since February 2023! There are now 180 million, totaling 10 GB. The problem here is not so much the memory required (although it’s a concern), but rather the lengthening of the Initial Blockchain Download (IBD) time.
“It took me 26 hours to download the entire blockchain up to February 2023, and an additional 55 hours for just the last year. The explosion of the number of UTXOs makes the IBD time extremely laborious,” said the founder of Ocean Pool.
“The situation is much worse than before. It’s an order of magnitude difference. This isn’t FUD. The more we turn a blind eye [to the inscriptions], the faster we accelerate the centralization of the Bitcoin network. At this rate, we’re on track to add more than 48 hours of IBD time every year.”
In other words, in just ten years, it will take 24 days to install your node… And this is true even if we take into account the improvement in Raspberry Pi’s power, which doubles every four years.
“The Raspberry Pi is a nano-computer the size of a large pack of cigarettes that allows you to install Bitcoin Core to run your node and participate in Bitcoin decentralization.”
“In 2022, I could complete the IBD in less than 48 hours with a simple Raspberry Pi 4. I now use a Raspberry Pi 5 with a processor that is twice as powerful. The Pi 5 reduces the processing time for the same amount of data by 50%. And despite that, the IBD took more than 82 hours instead of 48 hours!”
These figures are frightening. Do we really want to extend node installation to several weeks? Not to mention countries where internet connection is far from Western standards.
What is Bitcoin Core doing?
The question has obviously been posed to Gloria Zhao, one of the five developers with a PGP key allowing them to publish new versions of Bitcoin Core on GitHub (twice a year).
Gloria is the least experienced of the big 5, having joined them less than two years ago. Her salary is paid by the OKCoin exchange (about $150,000 has been allocated to her via Brink).
Gloria insisted during her interview with Peter McCormack that “there is nothing she can do that is not entirely public.” “I recognize that I have a lot of privileges on GitHub, but there is nothing we can do that is not completely verifiable,” she emphasized.
Certainly, but not submitting code is just as consequential as submitting malicious code. And that’s where the disagreement lies. Many are calling for an update to the filters to curb the inscriptions. Among them is Luke Dash, the second largest contributor to Bitcoin Core.
Filters are the nickname given to rules preventing certain transactions from being relayed to a miner’s node, which will add them to a block. There is, for example, the “dust limit.” A transaction will not be relayed by nodes if the amount sent is lower than the transaction fee.
The code to prevent relaying transactions containing ordinals exists, but the big 5 remain passive. They seem paralyzed by Bitcoin Magazine, whose CEO manages an investment fund that invests notably in the inscription business…
One of the few excuses put forward by Gloria Zhao is that nothing should be done that could go against miners’ financial incentives.
This argument is difficult to justify if the decentralization of the network is at stake. What will happen to Bitcoin once centralized? Financial incentive should not cause ideological blindness. We need to be rational. Engineers don’t deal in ideology.
We now await explanations from the other four core devs. If the arguments are not convincing, we will need to start asking questions. For example, about the revenue that an exchange like OKCoin collects on inscriptions and draw conclusions from it.
