For months, bitcoiners have been bitterly debating the Ordinals phenomenon and the large amount of trading activity and congestion they brought to the chain.
It is a very nuanced clash in which it is difficult to find the correct “ideological” answer. I won't try to give a definitive answer here, as that's ultimately up to the community at large. But hopefully we can all agree to some common ground rules that can help us resolve the debate without getting into another war that results in bitter hard forks.
A story about the free market and higher purpose
The complexity of the debate lies in the cognitive dissonance that Ordinals trigger within the bitcoin community. It's safe to say that Bitcoiners are very much in favor of free markets, freedom, and financial freedom.
And, on the one hand, ordinals are the purest expression of the will of the free market. If some people are okay with paying to transact manipulated tokens that are pushing bitcoin Script's capabilities to the limit, then who are we to say this is a mistake?
The foundation of the bitcoin network lies in the use of selfish economic incentives to create a positive outcome for everyone: the creation of a value-neutral payments and settlement layer.
Miners, as one of the key pillars of bitcoin, are making huge amounts of money from Ordinals.
And we also cannot deny the long-term benefits of Ordinal and BRC-20 for the network. The ordinals have managed to promote the bitcoin-miner-revenue-fees-vs-rewards/”>percentage of fees in total miners' revenue to about 10%, which is similar to what we saw in the most active phase of the 2021 bull market.
Although some Bitcoiners may choose to downplay this issue, the fact is that without mining rewards, bitcoin's security would be fragile at best. It follows that anything that can boost usage of the bitcoin blockchain is good for bitcoin, right?
Of course, it's not that simple. Ordinals make it more expensive to use bitcoin for what it was designed for: payments and transfer of value.
Some hardline Bitcoiners would probably have a heart attack if they saw the community adopting speculative bullshit trading as a “solution” to the security budget problem. And they are not so wrong.
bitcoin was born as a vehicle to escape the tyranny of central banks, to give everyone in the world the strongest money ever designed, and to serve as a neutral layer for people to use regardless of their economic, geographic or political background. . Speculative trading of Shitcoins doesn't exactly fit that higher purpose.
So while Ordinals are probably a legitimate use of bitcoin that fits with the free market-oriented principles shared by Bitcoiners, they ultimately prevent bitcoin from achieving its true purpose. How do we reconcile this?
Is pragmatism the name of the game?
There is currently an unresolved issue bitcoin/bitcoin/issues/29187″>affair on bitcoin Core GitHub which proposes treating Ordinals as a vulnerability in bitcoin Core, where the only appropriate response is to remove it in any way possible.
That's certainly one way to think about it, but I think this approach is too knee-jerk reaction. bitcoin is beautiful in its simplicity and robustness, and the community has rightly resisted significant changes to its fundamentals over the years.
Ordinals and BRC-20 are kind of a gimmick, but they still follow bitcoin rules. They are causing no more danger to bitcoin than the hyperactive traders of 2017, who caused the biggest spike in bitcoin fees to date. Even spiritually, they are not that different from the Omni protocol, which used the OP_RETURN field to introduce tokens into bitcoin (USDT is probably its most famous user).
The consensus in the bitcoin community is that most users should use L2 solutions to transact btc, and that the main chain should be reserved for extremely high-value, high-cost use. After all, that is the only way to include enough transaction fees in the current block size to guarantee the security budget in the long term.
If L2s were to gain mass adoption, then most of the use of the bitcoin network would be as a data layer for these secondary protocols. I don't think this is the worst thing in the world. And if I had to choose, I would choose bitcoin as the data availability solution for extremely sensitive information, far ahead of custom solutions whose future largely depends on the coffers of a single development company.
But the key argument is that if we need to make changes to bitcoin, they have to be extremely slow, methodical and calculated.
While I understand the hostility towards the way ordinals are primarily used today, they can also be very useful for non-speculative uses. I would definitely choose them to host the next Wikileaks.
There is also an argument to be made in favor of speculators. Without them, bitcoin would not have achieved the global popularity it has today. It has always acted as a Trojan horse, a way to initiate the network effect necessary to make global money with bitcoin.
As long as the BRC-20s and Ordinals do not realistically endanger bitcoin, we must ensure that they are given time to evolve and grow. This does not mean that something should be done at the network level to support them further. Simply put, if it works, don't fix it: we may see something of real value as a result of this experimentation.
This is a guest post by Robbie Greenfield. The opinions expressed are entirely their own and do not necessarily reflect those of btc Inc or bitcoin Magazine.
