It just goes to show that most of the comments here are entirely clueless about the whole ordeal and don't wait for the facts to come out and jump with any nonsense takes. It turns out it is just a new service that has gotten traction attracting some BTC volume in the recent uptick in Bitcoin ordinals. That is it.
All can be found and traced for anyone to see in the blockchain.
Someone is creating tokens with the hope of selling them onwards. Most of them are created by a single entity, who spent about $30M in fees to do so, so presumably they expect people to buy them, and thus profit.
The only reason most Bitcoin users care is that they pushed up fees for everyone else (there is limited block space, so miners take the highest bids). Such few pressure is expected to be the norm eventually, and has happened before, but there's been a prolonged period (years) of low fees so it was a bit of a surprise to many.
Imagine if Visa and Mastercard formed a duopoly and used their market power to extract fees from merchants to the point of warranting government action to cap the fees.
That's funny because bitcoiners can't shut the fuck up about Visa whenever the abysmal throughput of the bitcoin network or its humongous power consumption is brought up.
AI could barely put together a sentence a decade ago but I didn’t tell anyone to shut the fuck up about it, it was pretty cool still even if it barely worked. Almost like technology progresses.
AI had tangible use cases even when it wasn't developed to the point where it could be applied to those. The problems AI is used to solve, existed before the technology to solve them.
Bitcoin, and all the other "crypto"-tokens, have been looking for a problem to solve for 14 years.
It's the new money, I mean it's an investment, I mean it's a store of value, it is a tech backbone for web 3.0, it is an online deed...
Soon they will find something it is reaaaally good at. Might solve some prime number conjecture by accident if they solve enough sudokus, I mean hashes.
You make some great points. Money, investments, banks, programmable money, decentralized organizations, VC where investors don't need accreditation (great for the little guy, bad for the 1%), deeds, remittances, prediction markets. Even capturing a fraction of a fraction of those would be a massive.
I used it quite a few times lately to pay open source contributors in countries that don't have access to Paypal. Paid my rent when Venmo blocked my account temporarily and I had to wait 2 weeks for checks to come in the mail. Used it for Mullvad VPN. Used it to get MJ on a market at far higher quality and better price than locally in Cali. Was super useful.
Paypal in and of itself makes the case, no need for any more.
I am sad to hear that. I was mocking the crypto attempts to legitimise their business proporisiton. All of them have failed, because fundamentally their product does not solve any real problem and once it interacts with the real world it has the same problems as those industries have.
Essentially crypto is like most libertarian communities, they eventually end up inventing regulations, governance and many of the same systems that we currently have, but only after fucking up themselves.
> Even capturing a fraction of a fraction of those would be a massive.
The risk of fraud outstrips any of the advantages, also the risk of lack of regulation on the financial system has brought us great hits like the 2008 banking crisis.
Giving VC access to anyone based on crypto is gonna be a gold rush of fraud, To the Moon tm slogans and other nonsense that will bankrupt as many people as possible before imploding.
I recently paid a lawyer I had to hire in the US with USDC, rather than paying 40€+ on top of exchange fees for each time I wire him money.
Another use case is domains and servers. When big companies like Porkbun, namecheap and vultr offer their services to be bought via Bitcoin there is probably some demand.
Was it done out of curiosity a few times or do you use Bitcoin as a currency daily?
Do you know anyone using Bitcoin as a currency daily? How many people do you think are using Bitcoin as a currency for legal business VS the number of people using it to speculate on its price and/or shady activities?
I'd love to be proved wrong but unfortunately neither of us will be able to collect this information so I guess we have to agree to disagree and live inside our little bubbles.
I use it as a currency kind of to encourage its use. I have several USD accounts to use depending on the merchant, and a couple BTC accounts as well, and I use the BTC whenever offered. My understanding is not many people use BTC as a purchasing goods currency. BTC buys are probably mostly a speculative bet that BTC will become more used and more useful in the future, just like any stonk albeit weirder.
I am only challenging the usefulness of a statement like "BTC is a criminal currency" that is fully applicable to USD just the same.
The problem with using BTC or any other "crypto" token as currency, is that it's not "legal tender" [1], aka. something that law guarantees can be used to settle debts with.
For something to be an actual currency in our world, one minimum requirement would for it to be legal tender. "FIAT" money is legal tender. If I have a 100 dollars in USD, and a debt of 50 dollars, I can settle that debt, period.
If I have a 100 dollars in BTC, and a debt of 50 dollars, my ability to settle that debt relies completely on the creditor to accept BTC as a form of payment. Which is entirely up to the creditor, as he isn't legally required to do so, unless we have an enforceable contract that says he has to.
As long as that doesn't change, and given the fact that the entire value backing of crypto tokens is based on the money invested into them, it is highly unlikely to happen in relevant economies, crypto tokens will not become a widespread currency.
A lot of people laud the fact that crypto is free of government influence. The problem with that is, that this government influence is exactly what makes money work as currency.
A problem to solve? It is not uncommon for companies to loose over 2% of revenue in banking fees and other enforced banking inefficiencies for transactions that could be handled much more cheaply and efficently with crypto solutions
> not uncommon for companies to loose over 2% of revenue in banking fees and other enforced banking inefficiencies
Do you have a source for that number?
And even forgetting that "crypto" comes with both delays and transaction fees, it is also known to be able to lose most of it's value basically overnight. So unless companies want to wake up bankrupt, they'd have to constantly change real money into tokens and back again for their transactions. I wonder how efficient that would be.
not more than my experience, which you can trust or not. if it means anything to you my experience relates to banks in the EU. i also deal alot in multiple currencies
crypto delays are minutes to hours. banking delays are a matter of days. just this week i needed to do a significant transfer with my bank. because i did the transfer after 16:30 (in branch!) i needed to wait until 06:00 for the transfer to happen because it was outside transfer hours. if some crypto coin functioned like this it would be laughed at
As far as I see, average ETH gas prices have been between ~20 and ~170 USD in the last few months. So, by my understanding (happy to be corrected) for a 1k USD transaction, that's between 2% and 17%. It does get pretty good if you're transacting huge sums. It's abysmal for day-to-day payments.
Where did you get this impression? I've been involved with bitcoin since 2010, and replacing Visa has absolutely been the goal since the very beginning.
Satoshi called it digital cash. Turns out it is not a great cash alternative. Therefore it is now an asset. And we can revise history so that Satoshi meant asset all along. I didn’t say ponzi did I? No. good.
I don’t disagree. Bitcoin that isn’t cash has no purpose though. It’s why I left that space, despite having made some pretty fundamental contributions.
« The “electronic cash” envisioned by Satoshi is cash; it is not notes, scrip or bank credits. We have come to think of bank notes as cash, but they are actually contracts for debt. The note holder is owed something by the issuer. Cash is a commodity with certain properties that make it useful as money. Cash is largely gone from the world, and people cannot return to physical commodity money, as it cannot be moved online. Bitcoin is really our only option to guard against inflation, counterfeit, capital controls and high costs in general. Some might take issue with this vision, but that's because they imagine existing banks, financial institutions, and – most importantly – censorship. A global censorship-resistant settlement network is not like anything we've ever seen before. It is, indeed, the goal many people are working towards.
That system will allow people to buy their coffee with electronic cash, but Bitcoin will never carry every coffee purchase on-chain. Those who make the Visa-analogy either don’t understand how Visa works, or don’t understand how Bitcoin works.»
Modern day paper currency are not debt instruments. They are very much cash.
Whether bitcoin is used for direct payments or payment channel settlements is irrelevant. What is important is self-custody. Cash works and has the properties it does because it is a (mostly) fungible bearer bond. Bitcoin is also a (mostly) fungible bearer bond regardless of whether you transact on chain or through lightning.
They are debt instruments. Liabilities of the central bank that issued them.
Cash was the gold that you used to be able to redeem said liabilities for. These days, you can simply transfer the bank's liability to you to someone else, as a way to offset your own liability.
Just because the bank has no intention of ever paying cash at this point ever since Nixon left behind specie payments doesn't change the fact that these notes are still issued as liabilities.
And when I say issued by the central bank, I do mean only the paper bills that are issued. Most money that exists in bank accounts is issued by the various commercial banks that operate within the banking system (when they issue you a loan, they don't go out and find other money; they simply credit your account with the amount of the loan, and that money was simply loaned into existence as a liability of that bank).
By going off the gold standard paper currency is no longer a debt instrument.
There is intrinsically no difference between deciding gold is the scarce thing that we all accept as money, or some specific hard to duplicate paper money. They both serve th same purpose.
> Bitcoin is really our only option to guard against inflation, counterfeit, capital controls and high costs in general.
Cash (and Bitcoin) are just as vulnerable to inflation as traditional currencies. If oil is more scarce, the cost of all oil-based goods will increase, regardless of whether you can mint more BTC or not. Not that it would be any serious difficulty to increase the supply of BTC either - it's ultimately just a number in some program.
Counterfeiting is fixed by all digital payment systems. Visa cards are just as secure from counterfeiting as BTC wallets.
Capital controls are much more easily enforced when you have a public ledger.
High costs are inherent to BTC, at least as the community exists today. And the network itself is completely impossible to scale to anything like a full payments system, as you yourself admit.
Also, censorship is easy to implement on top of BTC: just require miners to be licensed, require licensed miners not to validate transactions from certain wallets, and to ignore blocks proposed by non-licensed miners. Since mining is an extremely centralized and high-capex + high-opex operation, it's easy for a a powerful government to shut down any significant miners who aren't licensed. So, if BTC payments ever become a significant way of circumventing sanctions and censorship, the ban hammer will come down swiftly. Of course, so far BTC is both too low in scale for major governments to care, and too convenient as a honeypot to find sanctions breakers.
You can significantly improve privacy without harming scalability (in fact improving scalability at the same time) [1]. Admittedly you still lose full supply auditability [2].
No, I'm just using the fact that in a Mimmblewimble blockchain, the initial block download doesn't include any data about spent outputs. Neither the outputs themselves nor their rangeproofs. That's the beauty of MW.
You could call that historical aggregation, but normally when people talk about aggregation (as I assume you do) it refers to aggregating transactions before they're included in a block.
In other CT blockchains, that data stays around forever, hurting scalability.
Initial block download isn’t the bottleneck for scalability though. You can quite safely import a year-old utxo set, especially if there are utxo set commitments or if you already have access to a running node somewhere.
In my experience when people talk about on-chain scalability, they mean transactions per second of real-time validation. Maybe I’m wrong but I don’t think anyone in this thread was talking about IBD / validation of historical data.
But even right now in bitcoin you can initialize a node with -assumeutxo to avoid IBD costs. You either get the UTXO set from a node you already control (and its turtles all the way down), or if bitcoin supported UTXO set commitments you simply pick a committed UTXO set from N blocks back, for some sufficiently large N. All block headers are downloaded, but full blocks back to the Nth block commitment are validated.
While technically SPV, this ends up being exactly the same security model overall, since an attacker that can invent (say) a full year's worth of alternate history to fool you can already perform arbitrary double-spends on main net. In addition, although this is not required, for most of bitcoin's history the last year or two of mining represents almost all of the proof of work anyway, so someone who serve you a more-work forked off false chain with a false UTXO set commitment could have also rewritten the block chain since genesis.
Bitcoin's security model already assumes this is not possible. So with UTXO set commitments (which bitcoin will eventually get in some form), you only need to IBD a few months worth of blocks, or maybe a year or so if you are truly paranoid.
Lighntning, also known as not-Bitcoin. Lightning does away with Bitcoin's guarantees, unless you close the channel after each transaction, at which point it costs more than sending BTC directly.
And something like CashApp is even worse - it only uses BTC as a way to circumvent banking regulations, and for name recognition. Otherwise, it could just as easily work on top of regular banking, or do away with BTC entirely and simply work with their own centralized ledger.
This first paragraph is simply untrue. You are always holding a valid signature to spend the latest funds.
The additional assumption vs simply holding your own funds is a throughput requirement: that miners not censor your transactions for some (up-front-chosen) period of time.
With normal funds there is a non-censoring requirement, but it's more vague since the miners may have to censor you forever to make your funds useless.
It is not. If we have an open channel and I send a payment to you and confirm that you have received it (and perhaps that you sent some good my way), I can then close my channel on the BTC network claiming that no transaction happened. Lightning does allow you to punish this, but only if you find out in time - otherwise, the transaction is essentially rolled back - but the goods you sent are obviously not. This way, I can double-spend my BTC and roll back arbitrarily late into the future (assuming the channel stays open).
And related to censorship, I'm not sure what is the point you are trying to make. Still, censoring forever is not hard (you just add some wallet address in a list, and look those up before choosing which transactions to include in a block), and is completely equivalent to how payments censorship works in regular banks as well.
My Visa card doesn't cost me anything to use, because I don't carry a balance. It costs the merchant money to process the transaction, which would get passed on to consumers in general as higher prices. So, if this happened, what you'd see is people complaining about "inflation."
I get that fee right back in cashback + fraud protection + peace of mind from not having to carry cash + money saved by the merchant due to not having to deal with physical cash/getting robbed/etc.
Visa keeps a very narrow margin, for providing... A pretty damn good service.
> We estimate an aggregate annual redistribution of $15 billion from
less to more educated, poorer to richer, and high to low minority areas, widening
existing disparities.
That's almost nothing compared to the rich people spending far more money at shops in the first place, which pays the fixed costs that makes it affordable to even sell to the poor people.
If that's what you think the problem with credit cards is, there's a simple solution to it. Ban usury.
They'll still exist, and they'll still work in nearly the same way they do today, the cashback rate will drop by half a percent, and the credit score cutoff for getting one will go up a couple hundred points. The working poor using them today will just end up using debit cards, instead.
> Such few pressure is expected to be the norm eventually
Or rather, such fee pressure is required to be the norm eventually for bitcoin to remain secure when block subsidies become insignificant (halving every 4 years, 1024x less in 4 decades).
"We leave the conclusions to the reader. However, we notice that by spending only 0.005% of the total Bitcoin supply on transaction fees, a single entity can significantly impact the entire Blockchain regime. This illustrates that if a whale or a governmental actor, possessing hundreds of thousands of Bitcoins, decides to spam the blockchain, they could impede its usability for normal payments."
Well, what is "normal" anyways... For me, the next question is: Who owns that BTC address? Once we know this, we can fairly quickly piece together the link between BTC manipulation and adjacent monetary paths, e.g., US stock market fluctuations and the recent bank failures.
I've paid for things with Bitcoin before. Unless by "essentially" you mean to say that those types of transactions don't make up a significant network volume.
Indeed, and then the cost of a single transaction (around USD 50 currently) will be borne by the sender/recipient, rather than by all Bitcoin holders via increase of the money supply (as is the case now).
(Note that the actual cost is probably higher due to externalities in the waste of electricity and equipment, and borne by all of us.)
if you think about it in the long-term, the rewards eventually go to zero and there's no incentive for any of the miners to mine and the whole thing collapses
Unlike the block reward (mining subsidy) which is set according to a fixed schedule, fees are set by the market. They will go up if demand for L1 transactions go up, but there’s nothing in the protocol to push them up over time.
Satoshi’s vision was for Bitcoin to be used as digital cash[1], so that transaction demand would be enough to sustain the security of the system. Since the “cash” use case has fallen away to the “store of value” use case, it seems a bit dubious.
Transaction costs have recently gone up because of ordinals and NFTs so we’ll see if that sticks.
[1] the Bitcoin paper was called “Bitcoin: a Peer-to-Peer Electronic Cash System”
Did the original "digital cash" thesis ever make sense? It's my understanding that Bitcoin can never hope to scale to meet a fraction of daily real-world transaction volume outside of adopting a so-called L2 solution like Lightning Network, which would seem to defeat the point somewhat.
It certainly couldn’t have covered all of human commerce, but it could cover the sort of transactions where having an uncensorable, irreversible transaction is worth paying a premium for (silk road, etc.)
Well, in practice the mining subsidy is highly variable, as most miners' costs are in local currency, so fees are already set by the market.
But I agree that the NFT thing is really a side-effect of fees being low (thus, cheap distributed storage) which probably at best provides a price floor, rather than a sustainable source of revenue.
Is this accurate? Theres some sort of side-storage mechanism in Bitcoin that you can essentially pay for, but its little trafficked. But its used for NFTs. And for whatever reason this entity bought a ton of "NFT UPCs", which has the side effect of driving up transaction costs because they're spammy transcitions on limited bandwidth.
Someone (possibly, as nothing here is certain) mined most of this worthless "NFTs". Maybe out of passion, maybe hoping to sell them to idiots, maybe just to spam Bitcoin's blockchain.
That's it. That all the conclusions to be had here.
The whole thing is a big nothing.
Idiots duped to pay for this stuff raised the floor for price of blockchain space from artificially low (due to still low adoption) to a more reasonable one (reflecting the value of global replicated censorship-resistant database). It doesn't change much in a great scheme of things. Some Bitcoin users are annoyed that Bitcoin transactions aren't nearly free as they used to, but it was always just a matter of time.
oh yeah, haven't we all had ones of those days where we get excited about something and spend thirty million dollars on transaction fees? :)
(I don't disagree with the rest, but I am chuckling a bit at people wrapping themselves into pretzels trying to find ways to see it as potentially earnestly motivated...)
I disagree with the following, but my understanding is Bitcoin purists believe that ordinals are moving Bitcoin away from Satoshis’s whitepaper introduction of Bitcoin as peer to peer electronic cash. In this mindset, meme coins and nfts are scams or at best unimportant entertainment commodities rather than a core innovation of blockchains. So the use of the Bitcoin chain’s limited block space to create these ordinals increases fees for peer to peer cash transactions and move Bitcoin away from Satishi’s vision.
Probably the reason for leaving the conclusions to the reader is conspiratorial. Since one single wallet is responsible for most ordinals, some people might believe it is a government actor trying to stop Bitcoin from becoming useful as peer to peer cash. Of course this is ridiculous as in fact the original premise is wrong as memecoin and nft entertainment products represent a greater threat to state power than peer to peer cash - as they represent popular sovereign property that a lot of people want.
I think your last statement is completely wrong. NFT's and memecoins are a grift by scammers, no more. People being duped is certainly no evidence of any actual threat to state powers.
Most of the memecoins seem to just be money raising vehicles to bolster exchange profits
Actually, you’re the one who got duped, if you genuinely believe that every single NFT is a scam and that you understand them better than every single NFT owner.
If I believe 99% of all NFTs sold were get-rich-quick scams, and because of that I've never have bought an NFT, how am I being duped? What am I missing by not being involved in it? Or more accurately, what did I miss out on? Seems like I missed out as much as I missed out not getting any Beanie Babies.
What's the 1% was used for ? I to this date haven't seen actual use case that wouldn't be either useless or "why you can't just a database, you own all of the ecosystem around it anyway".
It’s not up to me to know what you should spend your money on. However, your statistic makes no sense. Objectively speaking, many NFTs being minted are technical in nature, such as concentrated liquidity on AMMs; it’s nonsensical to compare this use case to beanie babies. That’s just one example. There are also private communities on social media which are gated and can only be accessed by verifying NFT ownership. Not saying you should care, but there is organic demand for access to those communities and you’re deluding yourself if you think their members are all imbeciles who believed that JPGs were actually being stored on the blockchain, or whatever. There are also examples of video games which use NFTs as interoperable assets.
You probably have a very specific image of NFTs that was fed to you by crypto opponents and which is incomplete and naive. That doesn’t mean that I think you missed out on anything. That’s subjective
NFTs are essentially bearer tokens, very much like literal Bearer tokens in HTTP.
To take one of your examples- gating auth to a community.. the community is usually an off-chain centralized thing like Discord. Due to that, the auth logic sits behind closed doors. Verifying an NFT has no advantages over verifying a random string that only the intended user has. i.e. traditional bearer tokens of some sort.
The only advantage of NFTs is in systems that are completely decentralized or in systems that care about verifying a wallet for some reason (_not_ the same thing as verifying a user who goes through the centralized auth of discord or xbox)
So, for example, if the community itself were completely 100% on-chain. This doesn't exist because chains cannot scale the way simple socket servers do. There may be some chats or games that operate on-chain, but they are slow and feel like 30 year old tech.
Afaik the most popular use case for chains is trading crypto assets. Here, NFTs can be useful for establishing auth (or other on chain utilities like the concentrated liquidity you mentioned), but then it gets to the parent's point - for someone who doesn't care about trading crypto, there isn't a compelling use case, since it all boils down to "beanie babies" - the difference is that it's not the nfts that are the beanie babies, it's the crypto ecosystem driven by circular supply/demand.
> Verifying an NFT has no advantages over verifying a random string that only the intended user has. i.e. traditional bearer tokens of some sort.
I’m so tired of seeing people confidently post like this about crypto. There has been so much effort put into explaining, you really have no excuse anymore to parrot it.
Very easy rebuttal: NFTs can be minted in exchange for currency and can be traded between owners later – both functionalities rely on infrastructure that already exists. More complex rebuttal: you can get peer-to-peer (and even peer-to-pool) loans using your NFT as collateral (again, using permissionless infrastructure that is already built for you). How is any of this applicable right now to a HTTP header?!
Also, the only people I ever heard of mentioning “videogames fully on chain” are crypto opponents; they try to come up with the most bizarre scenarios, to “prove” that crypto is inadequate. It’s so irrational.
> Afaik the most popular use case for chains is trading crypto assets.
Yeah, it’s almost like blockchains are designed to be financial infrastructure. At least you got the basics right, I guess.
So can bearer tokens, client certificates, concert tickets, etc. Put up a webpage that takes payments (including crypto if you so desire) and hands out whatever authentication instrument you want upon successful payment.
> can be traded between owners later
A conventional, non-chain-based system can also include this functionality. Presenting your current bearer token and a contact for the desired new owner would invalidate your current token and email them a new one.
Any system where this kind of transfer makes sense and is willing to allow this kind of trade already has it - you can freely trade video game cosmetic items on most games, you can resell tickets on Ticketmaster (albeit for a fee), etc. If the platform owner doesn't want you to trade then NFTs are of no help either because the blockchain has a publicly-visible history of all trades which the platform owner can use to refuse access to any NFTs that have been traded (so if you want to trade you need to trade the actual bearer token - or private key in a cryptocurrency world - and hope the seller is honest and didn't keep a copy - again crypto/NFTs doesn't help here either).
The problem is that NFTs only make sense on-chain. As soon as you go off-chain you lose most/all of the advantages of NFTs, at which point you may as well rely on an authentication instrument also issued and managed off-chain.
> Any system where this kind of transfer makes sense and is willing to allow this kind of trade already has it
No it doesn’t have it. That was the whole point. The examples you gave had to each build their own in-house bespoke infrastructure for this functionality. With blockchains it already exists, it’s secure and any new app or user can start using it right away.
They don't need their own in-house bespoke infrastructure, the hard part is user identity, and there are many services that will host this for you and also integrate seamlessly with third party providers (Firebase, for example, which will let you identify via Google, Meta, GitHub, Twitter, etc. right out of the box)
The difference between Firebase and Ethereum+metamask isn't a significant development cost for anything beyond a toy weekend project.
The difference is only about trust.
The argument you want to make is that we shouldn't trust Firebase, they could steal our auth tokens and act on our behalf without our permission, so we need trustless decentralized solutions.
That would be a valid argument, but a hard sell to an audience that doesn't buy the premise. I'm not going to debate it.
However, it has nothing to do with the technical layer of auth which is just "prove that you know the secret" in all cases.
Either you don't understand how this works, or you're deliberately avoiding the point.
Where do you think Metamask stores your private key?
It would be trivial for Firebase to release a browser extension that used LocalStorage to store the secret, like Metamask, instead of regular web storage.
How the hell does firebase enable users to interact p2p to exchange a digital asset from one vendor with an asset from another, or use them as collateral for loans?
In the exact same way that blockchain does - you present a token that can be validated by your peers.
However, in blockchain it's the combo of your private key to sign your wallet, along with the consensus engine where decentralized voting decides to accept the generation and association of new tokens.
In centralized servers, it's the combo of your credentials to login, along with the servers that update the database.
Once you own a token, you can create signatures for it that other peers can validate. For example
I've already addressed your points about collateral and loans. That's purely business logic, and has nothing at all to do with NFTs (which are _only_ user<>token_id mappings)
So if i have a software licence and i want to exchange it for a concert ticket that a stranger doesn’t need anymore, where precisely do i go, today, to make this happen? What’s the app name or the website i go to? Because i know exactly where to go to exchange NFTs, in a secure, configurable and trustless manner.
> That's purely business logic
Call it whatever you want, the infrastructure that enables it and that is already functional today is only compatible with NFTs.
Tell me where you go on Blockchain to exchange a software license for a concert ticket?
This doesn't even make sense for most chains since software licenses generally depend on some sort of secrets or drm that can't work on transparent chains (anyone can look at the tx and impersonate the owner to grab an activation code).
The actual product and ecosystem of these things is the hard part. You can't actually do anything at all with NFTs because they are merely mappings of users to random strings.
They have absolutely zero utility in and of themselves. Not as rights to jpgs and certainly not as proof of concert ticket ownership.
The business logic is what makes it all actually work, and can be applied far more easily in centralized systems.
Again, the usefulness in Blockchain is not authorization tokens, it's decentralized consensus, which is only useful insofar as you distrust the centralized alternative.
The auth token itself, whether NFT or any other bearer-like, is neither innovative nor interesting nor inherently useful. It only becomes useful where decentralization is useful and compelling products use it for practical needs.
I'm repeating myself now, no point in beating a dead horse.
NFTs are only spec for smart contracts that dictate mappings between "owners" and "token ids". That's it. End of story. There isn't even a universal requirement that maps from token id to metadata like OpenSea's format.
> NFTs can be minted in exchange for currency and can be traded between owners later
The part of dApps that recognizes NFT ownership for releasing funds is just business logic that can be replaced with anything we can imagine - including but not limited to checking the storage for an Address->RandomString lookup (in fact, if you squint, that _is_ what's happening in transactions due to the step that verifies wallet signatures via cryptographic hashes)
There is nothing at all in the spec that allows for them to have any special meaning in terms of vouchers for currency
> More complex rebuttal: you can get peer-to-peer (and even peer-to-pool) loans using your NFT as collateral
I don't think you understand how NFTs work. This isn't even a more complex rebuttal, NFT contracts don't care if the owner is another contract or a human with a wallet. They only care about the owner to token id mapping. If anything, p2p loans is a _simpler_ example because you're moving the logic out of contracts and into, perhaps, humans who decide to act on nft transfers. It's a weird example imho, but regardless, it's only an extension of the above points.
> How is any of this applicable right now to a HTTP header?!
In HTTP, you acquire a random string (via some web app), and then you later provide it to prove authorization
In Blockchain, you acquire a random public/private keypair (via wallet generation), and you later sign data with this random key in order to prove authorization
In NFTs, you use the Blockchain infrastructure to sign transactions that associate you as the owner with arbitrary token ids.
Do you not see that it's fundamentally the same thing?
> Also, the only people I ever heard of mentioning “videogames fully on chain” are crypto opponents; they try to come up with the most bizarre scenarios, to “prove” that crypto is inadequate. It’s so irrational.
Ok. I mean, I've hands-on deployed CW721 contracts on cosmos with a Unity frontend for on-chain gaming demos. Your ad-hominem attacks are pretty weird from where I'm sitting and, frankly, reek of "dunning-kruger effect". But I don't want to get into a pissing contest, let's stick to facts:
1. Most chains require you to sign transactions all the time. It's a crappy UX. Near avoids this to some extent, and it's a clientside thing that can be skipped, but generally at the expense of security most users aren't comfortable with.
2. Transaction time is slow af compared to what you get with regular socket servers. I'm talking a difference of speed in terms of decades of progress. Not years. Decades.
3. Nodes go out of sync, you have race conditions, there are real problems to solve that robust game server tech deals with and blockchain doesn't concern itself with. Working around these are doable but painful and not out of the box.
4. Most games depend on randomization and/or hidden state that clients cannot be made aware of to prevent cheating. There are some chains like Secret Network that propose solutions to this, but overall, blockchain is transparent in ways that are showstoppers for on-chain games.
> Yeah, it’s almost like blockchains are designed to be financial infrastructure. At least you got the basics right, I guess.
I may have misunderstood your point of gaming. If your point was that games do not need to be on-chain, then it _really_ begs the question of what utility NFTs provide.
Rephrased, in a game that depends on proprietary centralized servers, what do I gain by having a public ledger that the game can query to say I own some asset? Or, alternatively, in a game that recognizes arbitrary decentralized permissions, what do I gain by having proprietary centralized servers? Let's avoid flowery language and deal with reality:
Scenario 1) I buy a sword from Joe on OpenSea. Epic games recognizes NFTs as a generic spec and lets me import it and use in the game. That's wonderful, but in this case I do not need to buy anything from Joe, I can just mint my own sword for free, since they'll recognize any spec-compliant contract.
Scenario 2) I buy a sword from Epic on OpenSea. Epic games only recognizes NFTs that they have the authority to mint. Yay. But now why didn't I just buy it from Epic directly, since I already depend on them fully for auth (they can just migrate the nft contract at will), what does having it on Ethereum add?
Scenario 3) Just like Scenario 2, but Epic recognizes a list of official partners that they trust but do not own. Meh. it's not that interesting. Might be a little more interesting if those partners are themselves DAO-controlled. Still, I think it's more in the category of "kinda neat" instead of "gamechanging"
Scenario 4) I earn a "high score" NFT by playing an Epic game, and they mint an NFT for me (I've gone through their login _and_ associated my wallet with their account). Other games recognize this specific NFT address as being owned by Epic and give special utility. Again, this is pointless, we've already placed all our trust in Epic's closed system, they might as well just expose an endpoint
Fully on-chain ecosystems with no leaks are a different beast imho. Decentralization is cool! It's just extremely crappy for game ux right now. I expect the tech here to catch up eventually. When it does, we can have:
Scenario 5) Doesn't exist now - but I play an on-chain game and earn some NFT. This is then recognized in another on-chain game that gives added functionality. Everything is governed by DAO. Interop can be voted in
This is cool. However, what's innovative about this is that it's basically open-source collaborative business. I do think that's pretty huge, in theory, if it took off. The hard part would be the actual programming and game design to make the interop interesting. The NFT part is still just an auth token, nothing more.
> what do I gain by having a public ledger that the game can query to say I own some asset?
Literally read my comment that you replied to.
> Scenario 5) Doesn't exist now - but I play an on-chain game and earn some NFT. This is then recognized in another on-chain game that gives added functionality. Everything is governed by DAO. Interop can be voted in
Their videos which tease advanced game mechanics look like pure hype to raise money from the gullible. Their white paper says nothing about how this works and their repo has no code.
Here's what I want to know:
Player 1 shoots. Can player 2 see the trajectory of the shot before it hits them?
If yes- how do they avoid cheating?
If no- how is this on-chain?
Eagerly waiting an answer to that
There are many more problems for on-chain games (that are not just trading with pretty skins), but let's start here
(probable spoiler alert: they don't have an answer to that, they don't actually have any on-chain physics or game mechanics beyond trading crypto assets, they only made the demo video to dupe investors)
> Their videos which tease advanced game mechanics look like pure hype to raise money from the gullible.
There’s gameplay demos on youtube dude. There are users beta testing the games.
> they don't actually have any on-chain physics
Again, on-chain physics is stupid. Illuvium is just an example where the assets you obtain in one game are also integrated in a different game (interoperability, because you brought it up as something cool that you didn’t think existed yet).
> that gives added functionality. Everything is governed by DAO. Interop can be voted in
What I mean by functionality is _actual_ functionality. Like, I earn a shield in one game and now it lets me deflect hits with new animations in another, so the DAO would need to vote in code changes. This is what I meant by interop too.
Not being able to see JPGs that you import across games. Like I said, I built something like that as a weekend project and custom cw721 contracts and unity. It's not hard. It's also not interesting to me.
> What I mean by functionality is _actual_ functionality. Like, I earn a shield in one game and now it lets me deflect hits with new animations in another
Yes, literally how Illuvium games work. Eg in the mobile city-building game you build factories that extract minerals, which are then available either to trade with other players or to use in the desktop MMORPG as materials to forge weapons.
That's not what I meant. What I meant is if another game, by a complete third party, used these minerals in ways that change the functionality of the game and required a code change to support, and that the code change and version itself were controlled by a DAO
Like for example if these materials let you build new kinds of structures in Fortnite, if Fortnite were controlled by a DAO, which also implies that the code is running on-chain, because who owns the keys to upload to the Microsoft store etc.
Ooh, so I can take my mount from WoW and use it in, Tetris?
There no practical use case there, unless the other games are pretty much the same. Unless you mean cross-platform, in which case who gets to keep the money you spent?
Those are the same people who stopped BTC from having smart contracts via a full featured VM, moving it away from Satoshi’s vision — right?
BTC was supposed to be liquid as a market for compute by posing and solving challenges to give it an intrinsic value — and the people who gimped it for “Digital (Fools) Gold” are now complaining about scammers misusing the technology?
Well, at least I get to start my day with a laugh.
> Those are the same people who stopped BTC from having smart contracts via a full featured VM
The only person who has ever reduced scripts functionality is Satoshi.
But the conartist pretending to be Satoshi has been paying people to claim otherwise. It's easily falsified.
> BTC was supposed to be liquid as a market for compute by posing and solving challenges to give it an intrinsic value
Citation needed. That doesn't even make sense: You can't give the Bitcoin currency itself "intrinsic value" just because people use it to buy or sell some kind of good or another.
Sure you can: if the tokens are a medium of requesting compute, they take on a base value because they can be exchanged for that service. BTC was a commodity token for compute.
Right now, there’s no native market for BTC to either drive its adoption or create a value even in the presence of inflation. Which is why its “killer app” has remained circumventing financial controls — as that’s the service its network provides. In contrast to ETH.
"The tokens" can't be a medium of requesting compute except in the sense that any money can be used to pay for goods and services. When we talk about something having intrinsic value it doesn't really make sense to argue it on the basis of "you can use it as money to pay people to do stuff", that's an extrinsic value.
(It also seems to be a non-sequitur. If you want to pay people to perform computation for you only the most minimal functionality from Bitcoin's script is required to do so in a trustless manner, e.g. https://bitcoincore.org/en/2016/02/26/zero-knowledge-conting... )
You've also appear to have ignored my correction on your "stopped" and "BTC was supposed to" remarks, if you're engaging in this discussion in good faith and were simply mistaken it would be polite to retract your error.
They can be when the tokens are themselves bounties which can be automatically claimed, eg by posing SAT problems to the network which represent a transformed version of your problem and the script claiming them a solution you can translate back.
This can be (and was prototyped as) a marketplace for optimization problems — until the implementation moved in another direction. Creating a marketplace where the goods can automatically be obtained for tokens is different than fiat currency in meaningful ways and provides a reason for people to buy the tokens at all.
That any money can be used for all that BTC is good for (except evading bank controls) is why there’s slowed adoption following that change.
- - - -
I didn’t respond because thats not my understanding, but arguing over old history isn’t a productive use of time.
Accusing me of “bad faith” because I didn’t respond how you wanted me to and instead chose to engage in the productive part of the discussion is itself poor conversational etiquette — particularly when you didn’t bother to provide any evidence for your claim. Despite claims that doing so would be easy.
Perhaps you should set the example of politeness you purportedly expect.
Let me try to parse out the facts that you've alleged here.
1. That it was Satoshis intention that Bitcoin would have intrinsic value resulting from acting as a "a marketplace for optimization problems" and that this was his vision of bitcoin.
This is false and I don't believe be supported by anything ever posted by Satoshi or any prior version of Bitcoin.
Satoshi even wrote specifically on the origin of Bitcoin's value and didn't make any mention of this intention you suggest: https://bitcointalk.org/index.php?topic=583.msg11405#msg1140... -- even arguably refuting the claim that he thought Bitcoin was intended to have any intrinsic value.
I don't believe using Bitcoin to trustlessly pay for solutions to problems was ever mentioned or discussed by Satoshi, it's possible he considered it but he certainly didn't market bitcoin on that basis. If he had I think it would have rightfully been criticized as not very interesting or important.
2. Specific persons "stopped BTC from having smart contracts via a full featured VM, moving it away from Satoshi’s vision"
I'm aware of well funded campaigns from a con artist fraudulently claiming to be Satoshi making this false allegation so I understand how you could have just been suffering from misinformation on this point, but it's been corrected now and I'd be happy to elaborate on it to whatever level you're interested in.
The reason I've asked for a retraction is because the claim isn't just objectively false-- it's an accusation that persons performed a potentially tortious or even criminal act. Because it's a damaging allegation and one that has been specifically targeted at me, I think I'm entitled to insist that you substantiate it (which you cannot because it's false) or withdraw it.
I'm perfectly happy to talk through any confusion or misunderstanding-- my apologies if you felt my response escalated to an accusation of bad faith too rapidly. From my perspective you made a serious accusation then when it was countered you simply disengaged with it, which to me seemed like you lacked a genuine interest in getting to the truth.
2a. "there’s slowed adoption following that change"
Unless you're referring to Satoshi removing[1] a number of script opcodes that allowed unbounded memory usage and other vulnerabilities in July 2010 there has been no reduction in the functionality of Bitcoin's VM. Presumably not, since virtually all adoption of Bitcoin occurred long after that point. Nor was it a change that produced the sorts of limitations you think exist.
3. "are themselves bounties which can be automatically claimed, eg by posing SAT problems to the network"
Notwithstanding the points at 1. and 2. it's always been possible to make Bitcoin payments which are trustlessly dependent on solving an arbitrary computer specifiable problem. This works fine today and requires very minimal properties from the system, I provided you with a link to an example demonstration. In that example I used a large sudoku instead of SAT because it's better known to a lay audience, but it's equivalently NP-complete.
> particularly when you didn’t bother to provide any evidence for your claim. Despite claims that doing so would be easy
I am particularly confused by this remark: What easily sourced claim did I make that I failed to source? I provided you with a link to a concrete demonstration of trading a solution for Bitcoin, which I believe disproves the central thesis of your remark: the thing you say can't be done can be.
(Though I still don't agree that it provides any intrinsic value to Bitcoin: The ability to make escrows for information that don't require third parties is a reason that Bitcoin is superior to legacy forms of money, but you can just as well say that for its other positive properties such as the ability to be sent world wide online, the fact that payments are made without an intermediary that can block them, etc. I don't think it's a controversial point that properties make Bitcoin a better form of money compared to some other form of money don't constitute intrinsic value because they're not exclusive.)
For your other factual claims 1, 2, and 2a (as I've labeled them): You are asserting something happened which I say is pure fiction. It's generally not easy to provide a citation to prove a negative but if they had happened it would be easy for you to provide supporting material (e.g. the commits making the change in popular bitcoin software).
1. Discussions in the early BTC community and forums, which is why I stepped beyond the debate as that’s not something easy to document now and the debate isn’t a productive use of time.
2. That’s a ridiculous claim; there’s nothing “tortious or potentially criminal” in changing a software in a way I think is dumb or leaves fewer features.
You seem to have hang ups on this topic you’re taking out on me — and as such, can’t handle that my opinion is based on my experience of early BTC, not whatever “misinformation” you’re envisioning since. That’s deeply disrespectful of me — and why (again) I was stepping past what I saw as an unproductive discussion. There’s no way I’ll be able to document to you something a decade ago, largely from in person discussions.
2a. The removal of the math op codes was a poor choice of how to handle security — but drastically reduced the ability of the network.
3. From looking through the link, your solution appears to require external programs and systems besides BTC, rather than being able to prove the SAT solutions directly over BTC and complete the whole exchange directly on chain in a single transaction.
3a. You explicitly said it would be easy to document your objection in the post I replied to:
> But the conartist pretending to be Satoshi has been paying people to claim otherwise. It's easily falsified.
3b. Having a market where you can redeem a token for information/good you want is important to valuing money — and the whole principle of the former gold standard (and arguably what backs money now, in oil). BTC lacked such a good.
- - - - -
Your conclusion returns to the inappropriate tone, so I’m going to exit this discussion because your personal issues with the topic make it clear you’re not going to be able to engage with my perspective in good faith.
> 1. Discussions in the early BTC community and forums, which is why I stepped beyond the debate as that’s not something easy to document now
All of Satoshi's public posts are archived online (e.g. https://satoshi.nakamotoinstitute.org/ and usually available in the original ___location), I had no difficulty providing several examples where statements supporting your position would have been expected if they had any basis.
e.g. In the aforelinked Bitcointalk post (583.msg11405) Satoshi pointed out outright that a good which was purely limited supply and transferable over a communications channel without any other utility would expect to be valued for its utility for exchange.
> in changing a software in a way I think is dumb or leaves fewer features
But that isn't what you alleged, you alleged "the same people" change it to eliminate its source of intrinsic value and violate "Satoshi’s vision", resulting in "slowed adoption following that change". If that were true anyone who'd purchased Bitcoin on the basis of that intrinsic value offered by Satoshi would rightfully say they were harmed by it.
(Which is also why what you claim likely couldn't occur: Once Bitcoin was widely used why would people adopt a new version that reduced its capability?)
The comment about tortious acts isn't conjectural, two of the several lawsuits brought by the con artist Craig Wright alleges hundreds of billions of dollars in damages on the basis of objectively false claims about "removed opcodes" -- a false argument you appear to be advancing here.
> There’s no way I’ll be able to document to you something a decade ago, largely from in person discussions.
Can you clarify for me: You're now claiming that you personally were involved in Bitcoin a decade ago? And that you were having "in person" discussions with Satoshi?
In any case, I was there. I can't recall anything even close to what you're suggesting. If my memory was erroneous I see no reason why you couldn't easily point to them on Bitcointalk, the Bitcoin Wiki, Satoshi post archives, etc. I've been happy to cite my points to contemporary discussions, but I'm limited by the fact that your position demands that I prove a poorly specified negative.
> The removal of the math op codes was a poor choice of how to handle security — but drastically reduced the ability of the network.
Take it up with Satoshi. I don't agree that it actually had the drastic effect you imagine but if your post had said that Satoshi drastically reduced the functionality I probably wouldn't have replied at all, since while debatable it would have lacked the objectively false and accusatory components.
> From looking through the link, your solution appears to require external programs and systems besides BTC,
Obviously you need to have an implementation that actually lets you specify the program and what not, but that is fundamentally unavoidable. If there were a lot of interest support could be included with Bitcoin wallet software. No external system was used, and the software is only external because there hasn't been any cause to integrate it in an ordinary wallet -- it's a pretty specialized use!
> complete the whole exchange directly on chain in a single transaction
That isn't particularly interesting: With the approach you imagine any other participant on the network could see the solution, take it out of the transaction then stick it in their own transaction to claim the funds. With that reality there would be little to no incentive to actually solve the problem since it would just be stolen (as the theft would be automated just as people have done for transactions using insecure keys/nonces).
That approach would also be extraordinarily resource inefficient, since all nodes in the network now and forever in the future would need to directly process the entire problem (which is easily gigabytes in size for any SAT encoding of a problem interesting enough to pay someone else to solve). The approach described in the post eliminates both the theft problem and resource usage problem.
> You explicitly said it would be easy to document your objection in the post I replied to
I see how that may have been unclear.
It would be easy to falsify a positive claim. For example, you could specify your allegation: "The developers of Bitcoin Core disabled OP_BLAZ in 2016" and I would reply "There never was an OP_BLAZ [link to code as of Satoshi's last activity]" or "That was disabled, but it was disabled by Satoshi in 2010 [link to commit]", or "That's still there right now [link to code implementing it] or so on. Falsifying the less specific allegation of "stopped BTC from having smart contracts via a full featured VM, moving it away from Satoshi’s vision" requires proving a vague negative.
> Having a market where you can redeem a token for information/good you want is important to valuing money — and the whole principle of the former gold standard (and arguably what backs money now, in oil). BTC lacked such a good.
I'm not following you here: No special functionality is required to trade Bitcoin for goods or services-- you can just use it like any other money and of course people do exchange Bitcoin for goods and services constantly and at significant scale today. I agree that trade is quite important, and yet also quite irrelevant to the discussion.
The particular snazzy trick of trading bitcoin for machine verifiable facts with absolutely zero fraud risk is cypherpunk sexy but of little interest to most of the world, and as a result unlikely to constitute any substantial basis for Bitcoin's value-- yet it's also perfectly functional in Bitcoin today.
The alternative you imagine of sticking the whole statement to be satisfied in a transaction directly wouldn't be useful due to solution theft and wouldn't have been practically possible in the system as Satoshi created it because script's 10,000 bytes limit[1], and to whatever extent the opcodes were removed made script less useful those changes were made by Satoshi (as I showed), not anyone else. But it doesn't matter because there is a way to do it which doesn't run into those incentive compatibility problems and Satoshi implemented limitations ... for as much as anyone cares (turns out-- not much!).
I think this is the point that gets missed in arguments about state actors being involved. That doesn't matter, what matters is that very few people (e.g. miners, exchanges, whales, etc) can determine very large outcomes for cryptocurrencies, with no way to avoid them.
No, I was talking about Ordinals. FTA, right after the parent's comment:
> However, we notice that by spending only 0.005% of the total Bitcoin supply on transaction fees, a single entity can significantly impact the entire Blockchain regime.
This has nothing to do with a 51% attack. All this article seems to be stating is that someone with large amounts of bitcoin can raise the transaction fees by sending a lot of transactions, which isn't really a surprise since only a limited amount of transactions can fit in a block.
> The total transaction fees spent by this entity to dominate the Inscriptions are estimated to be 1056 BTC as of May 25, 2023... We leave the conclusions to the reader.
I don't really understand what conclusion we are supposed to draw.
> However, we notice that by spending only 0.005% of the total Bitcoin supply on transaction fees, a single entity can significantly impact the entire Blockchain regime. This illustrates that if a whale or a governmental actor, possessing hundreds of thousands of Bitcoins, decides to spam the blockchain, they could impede its usability for normal payments.
Maybe this?
Interesting that someone was prepared to spend 1056 BTC on this. 1056 BTC is ~US$30M (edit: I had $3M before) at the current time.
Short selling and algo trading on exchanges would get counted towards that volume ?
With the exchange scams going around daily o wouldn't be surprised if that number is order of magnitude higher than the actual USD involved and in trading.
If I use 1 million dollars to make 1000 trades in and out of btc in a day that's a billion dollars of volume but maybe a couple of million in market depth could make that stable to enable those trades and a couple mill more could crash it.
Ordinal is a fairly new feature so it isn't terribly surprising that it's not widely used yet. Somebody has to be the first user, just as Satoshi mined most of the early blocks. More concerning is that the Bitcoin blockchain is getting clogged with Ordinals, crowding out other transactions. Spending $29M to DoS Bitcoin is either a really large or really small amount depending on your perspective.
They store JSON using the OP_PUSHDATA. The JSON has known fields like ticker, containing the name of the asset, call type like "transfer", "mint" etc. and an amount field. There are then external indexers that index these transactions and keep tabs.
It is not a feature like GP mentions. It is a fun hack that's being taken too seriously.
Bitcoins have always been non-fungible. Ordinals are just a standard for referencing a specific coin down to the unit (Satoshi) level that can be objectively determined. You can then "Inscribe" a given ordinal with a data payload such as json and image data.
Fungibility is a social/political/economic property. No two macroscopic physical objects are identical either, but we can treat them as fungible by disregarding their insubstantial differences.
That's assuming that the insubstantial differences are detectable.
Monero is fungible not because we choose to ignore the differences between units, but because we actually can't detect any relevant difference that makes it traceable or identifiable in practice.
Monero isn't in that sense either though, as each coin does have a casual history far smaller than the system-- less distinguishable for sure, but indistinguishable not quite! In the case discussed here the users are intentionally making their coins distinctive, which users could also do in monero if they were equivalently stupid. :P
Most belong to Udi Wertheimer, who hints it was funded by faketoshi Craig Wright as an attack on bitcoin. It's a very inefficient way to do 'nfts' on Bitcoin. There exists layer 2 protocol to make this work much better. Bitcoin will evolve and correct issues like this.
LN isn’t even scalable. And even then, the data wouldn’t be saved on-chain which is the main driving point when compared to NFTs on Ethereum which are just links.
On-chain will always have more value compared to inferior ways on L2, similar to how Ethereum L1 NFTs are more valuable than ones created on L2s.
This looks like money laundering. Someone had about $30 million in illicitly obtained Bitcoin. They set up a mining operation, paid themselves the $30 mil in mining fees to mint the NFTs, and now they have legitimate looking mining profits of $30 million.
There was talk on Twitter during the height of this of inscriptions bypassing the public mempool and going straight to certain miners. I can't find it with quick googling, but miners are always free to choose which transactions they include in the blocks they are mining
They choose transactions to include before they attempt mine a block. Then after they successfully mine a block (which is rare) those transactions become a part of the ledger. Usually they take the transcations from public mempool that contains transactions waiting to be confirmed. But in theory miners could include the transactions that were never put in the mempool. Although they would need to have a significant portion of global hashrate to mine such blocks at any sensible rate, not just very occasionally.
This flood of transaction paid high fees, out-competing many other transactions for network capacity. To get your transactions confirmed you had to either outbid the flooder or wait until the flooder either runs out of money or gets tired of hemorrhaging it.
Fraud and misrepresentation in the sphere of cryptocurrency? Say it isn't so!
> This vulnerability may partly be due to the discount for witness vBytes in SegWit,
That's erroneous thinking resulting from a false and confused description that uses the word "discount". An attacker's objective is to deny access to capacity to other participants by outbidding them for available capacity.
It doesn't matter what units the capacity is in or how its measured, all that matters is how much they're willing to spend each and every block to outbid the other participants. The fact that prunable witness data doesn't use up as much of the capacity limit as other data is completely irrelevant to the attackers power.
If, on the other hand, the attack were "we're using up the users disk space and it's cheaper to do it with transactions that have way more than typical witness bytes" that would be another story. But since the witness data is completely prunable it's not a suitable attack on storage to begin with, which is why it counts less against the capacity limit.
> relaxed witness size restrictions in the P2TR (Pay to Taproot) transactions scheme
I think that's also confused. Beyond the overall limit on the block there are no consensus limits. There have been standardness limits which limit what nodes are willing to relay and mine out of the box, but they're not imposed in consensus. My understanding is that recent ordinals floods have involved transactions over the standardness size limits, so at least those are being added with the cooperation of miners (tens of millions of dollars in fees apparently buys a lot of cooperation) so standardness rules are irrelevant, only consensus rules matter. So I think it's doubtful that standardness rules would help, and given the years of relentless harassment of bitcoin developers over other standardness rules like the 40 byte op_return limit I doubt anyone would bother trying even if they thought it might help.
I think people fall into this kind of misunderstand because they fail to think through where transaction fees come from-- they're not specified by the protocol. They're a result of market forces acting between demand and capacity limits so there isn't a way to use up capacity at lower marginal cost since the cost arises directly from capacity.
Or to be more clear: no way at issue here. I believe the authors of the taproot specs intentionally designed it to not need any other limits than the overall block weight specifically because having additional limits creates an avenue for attackers to use capacity at lower cost. An example is the old 20,000 sigops limitation in pre-segwit transactions: An attacker could create small transactions that burned up the separate sigops limit without using much weight, and since the sigops limit is normally not even close to limiting the miners txn selection would irrationally accept attack transactions that displaced more honest transactions than should have been implied by their fees.
I believe that attack vector is closed by the mining algorithm using an ad-hoc solution of the mining transaction scaling a transactions share of the sigops total to the weight limit and using it as the transaction weight in selection. This, in theory, results in an incentive incompatible transaction selection (so a miner following it would eventually be bankrupt against miners that didn't) but thats a non-issue in practice because only attack transactions trigger the maximum operation and when the attack doesn't work there is no incentive to create the attack transactions. But that kind of ad-hoc fix was only really viable because the sigops limit was high enough to never matter for real transactions.
Perhaps more relevantly, on the subject of attacking through denial of service-- the attacker is free to structure their transactions however they like... they only need to burn up capacity. In any case, outbidding isn't normally an attack that creates much concern because it's phenomenally expensive and the expense is ongoing: the to block the next best transaction X the attacker has to spend more that it in fees in each block its blocked from... while the defender only needs to get their transaction in once.
The fact that adding random limits can't actually stop a spam attack (at most it just forces the attacker to shape their transactions in a less distinguishable way) was the first thing people pointed out on the mailing list when this latest generation of spam attacks was brought up.
Not so, a key element in many fraudulent schemes is to use faux transparency to either market the fraud ("Look how popular this is, everyone's doing it!") or to create a false sense of security ("This can't be fraudulent, the absolute worst place to do fraud is on a traceable and a transparent blockchain.").
Beyond that, data isn't knowledge. That there is a lot of data doesn't mean you actually know much of value.
Even if the fraud or false sense of security happens, it is still traceable. That is the whole point. It is there for everyone to see and untangle the actions that have happened on the ledger and can be verified to be faked or not.
> Beyond that, data isn't knowledge. That there is a lot of data doesn't mean you actually know much of value.
The blockchain doesn't just have 'data', it has the 'information' that has the recorded transactions useful enough for those who want to trace the actions that happened on the ledger; fraudulent, faked, or not. This is exactly why tools like Chainalysis exist.
TLDR/non-crypto summary: Bitcoin's developers made changes recently that allow much larger transactions, with blocks up to 4MB in size on the Bitcoin blockchain in support of "BRC-20" tokens, which is Bitcoin's feature reduced version of Ethereum's ERC-20 token.
These same developers block attempts to increase the block size in Bitcoin, which would allow more throughput and transaction capacity.
The increased demand for Bitcoin transactions from BRC-20 combined with the limited block size caused transaction fees to skyrocket, making Bitcoin too expensive (again) to be used for normal retail use.
The article points out that 80% of these giant "BRC-20" transactions were coming from a single individual/entity in control of one private key. Effectively one individual caused the backlog in Bitcoin with sky high transaction fees.
Wow. That is a take my breath away level of untruthfulness.
> in in support of "BRC-20" tokens, which is Bitcoin's feature reduced version of Ethereum's ERC-20 token
It appears that BRC-20 is primarily affiliated with Calvin Ayre, the person backing "Bitcoin SV" and the conman pretending to be the creator of Bitcoin -- the three main entities connected to it are all funded by Ayre and they've been bragging pretty loudly about their disruption of Bitcoin ( https://nitter.it/B2029org/status/1655611301412982784 ). I've heard speculation that the attacks are either a marketing pitch for "Bitcoin SV" (e.g. create congestion on Bitcoin then pivot to the unauditable centralized BSV blockchain, which always has room cause it's easy to scale centralized systems) or an effort to get Bitcoin community members to propose protocol changes to block the flood in order to substantiate the allegations in either of the Ayre-affiliated 6 billion dollar or hundreds-of-billions-of-dollars lawsuits.
I'm not aware of any previous active Bitcoin developer that had anything to do with BRC-20 tokens, if you know of any I'm sure the bitcoin community would be very interested in learning of it.
> changes recently that allow much larger transactions,
Unless you are referring to increasing the capacity of blocks back in 2017, no change to the consensus rules that allowed larger transactions has happened. You can easily verify this for yourself by starting up an older copy of Bitcoin and observe that it accepts everything fine.
In any case, this "BRC-20" crap is mostly only embedding 89 bytes of data ( https://twitter.com/jratcliff/status/1655669410206457865#m )-- it doesn't need any larger transactions. It happens to stuff it into the most recent transaction type, but there is no reason that it couldn't put 89 bytes of data into pretty much any other kind of transaction.
I think the false claim that BRC-20 was made possible by recent changes is mixture of confusion and an intentional deceptive cooperation cracking move, intended to direct even more harassment at project contributors but it's just not true.
The Taproot upgrade made the witness data discount from Segwit available to be used by inscriptions. This is what led to the explosion in BRC-20 transactions that are clogging up the mempool. According to this research, it's all coming from a single entity.
Not so, the very first sentence of your post was a flagrant untruth.
> Bitcoin's developers made changes recently that allow much larger transactions, with blocks up to 4MB in size on the Bitcoin blockchain in support of "BRC-20" tokens,
Okay, go ahead link to this "recent change" in support of "BRC-20" tokens. -- gonna be pretty hard in light of the fact that BRC-20 activity appears to be primarily (perhaps exclusively) by parties connected to the multiple billion dollars in lawsuits against bitcoin developers, and the fact that old versions of bitcoin are just as happy with the same transactions and the limits on transaction size are the same at least since 2017 or earlier.
> what led to the explosion in BRC-20 transactions
The BRC-20 transactions are just embedding 89 bytes of data (see link). They're a spam attack of a sort which has always been possible and is nearly impossible to block, I'm not aware of any basis under which you can argue anything "led to" it other than an attacker being willing to spend millions of dollars a day to DOS attack the the network.
Segwit expanded the blocksize by allowing extra space for digital signatures at a discounted price. Taproot allowed BRC-20 to take advantage of this discounted data, which immediately led to the backlog. Whether that was the intent of the developers or not is not the point of my comment. The statement is factual.
You are arguing about intent and who is to blame for the backlog. My comment has nothing to do with this other than pointing out that the OP shows it is coming from a single entity.
If you assume “good intentions”, BRC-20 is stupid and makes no sense. It’s a reduced feature set ERC-20 token with far less throughput capacity that causes harm to the Bitcoin ecosystem.
I agree this could be an adversary with an incentive to take market share away, it could be someone speculating that a token on Bitcoin could be an opportunity for profit, or likely both.
Yes, in 2017 bitcoin block limit was replaced with a larger weight limit, but "discounted price" is nonsense: fees aren't priced by the protocol. Each block has a limit of 4 million, each transaction uses some amount of the limit and offers some fee. Income maximizing behavior by miners is to fill the block up with as much fees as they can fit within the limit which (if you ignore transaction dependencies and end packing) is accomplished by dividing fees by capacity usage and sorting. Taproot didn't change anything with respect to that, which you can easily verify for yourself by grabbing a copy of Bitcoin from (say) 2019 and observing that it accepts the same transactions. I'm quite confused as to why anyone is bringing up taproot other than that it was the most recent consensus change, but it didn't and couldn't have added any means to add more data because it strictly reduced the set of blocks considered valid (and didn't use the segwit technique of adding a new field to transactions to escape the prior limits). I could offer some cynical guesses, but I doubt they'd advance the discussion.
I'd happily agree these things are not particularly relevant, but you brought them up and stated them falsely.
The rest of your posts continues with the false claims "These same developers block attempts to increase the block size in Bitcoin" -- yet your own post admits blocks can now be 4MB, it was increased. Of course, absolutely zero evidence for your 'block attempts to increase' when your own post contradicts it! lol
> You are arguing about intent
Quite the opposite: "Unless you are referring to increasing the capacity of blocks back in 2017, no change to the consensus rules that allowed larger transactions has happened. You can easily verify this for yourself by starting up an older copy of Bitcoin and observe that it accepts everything fine."
The offense at 'in support of "BRC-20" tokens' isn't even a question of intent, it's a casual impossibility. Bitcoin's capacity increase was in 2017. Taproot (which isn't relevant, but lets ignore that) was designed in 2019-- these things couldn't have been done in support of BRC-20 which is a few months old. Nor would they have needed to, since the BRC-20 data is 89 bytes, people had no problem embedding files tens of kilobytes in size secretly in transactions many years ago.
> I agree this could be an adversary with an incentive to take market share away
I don't see how that's actually disputable. We already know who's funding it, it's funded by Calvin Ayre as the people engaging in it have openly disclosed. ...Unless you want to dispute that Ayre is an adversary! :D Exactly why is a total guessing game, I doubt there is only a single reason.
> TLDR/non-crypto summary: Bitcoin's developers made changes recently that allow much larger transactions, with blocks up to 4MB in size on the Bitcoin blockchain in support of "BRC-20" tokens, which is Bitcoin's feature reduced version of Ethereum's ERC-20 token.
This is completely false. 4MB blocks are possible since segwit in 2017 and BRC-20 has nothing to do with bitcoin, it’s just some third party protocol that assigns meaning to random data stored in the blockchain.
You can append random crap to your transaction and store it in the blockchain if you pay the fee, nothing has changed. The limit is still 4MB every 10 minutes.
2017 is hardly "recently" in bitcoin terms. It's also easy to interpret your comments as implying BRC-20 was a motivating factor for 4MB blocks, which as others pointed out would be nonsense.
Explanation thread: https://twitter.com/mononautical/status/1663383996561072129?...