This article was published in Bitcoin Magazine “The question of inscription.” Click here For your annual subscription to Bitcoin Magazine.

Let me start by admitting that the rankings are amazing! Ordinal Theory is a very clever way to tokenize individual satoshis, and Casey Rodarmor deserves high praise and appreciation for tinkering with the blockchain and making Bitcoin fun again. For the first time in Bitcoin history, we have NFTs on the heaviest proof-of-work chain, indelibly preserved forever!

Okay, now that we got that out of the way, let's dig into some “inappropriate” history. The rankings were not the first, far from it. Tokens have existed on the identification layers on top of the Bitcoin blockchain for at least a decade. Most of them were flashes in the pan like colored coins; It was never released, like RGB; Or under the radar all the time, like the counterparty.

You may not have heard of Counterparty — a shockingly large number of Bitcoin users — which launched in 2014 with a fair “proof of burn” that sent 2,130 bitcoins to an unrecoverable burn address, but you may have heard of Rare Pepe, a group that “ An early and pioneering allegory on Bitcoin consisting of 1,774 playful, humorous works themed around Pepe the Frog. RAREPEPE (Series 1, Card 1), commonly referred to as the “Nakamoto Card,” sold for over half a million dollars during the height of the NFT craze. The HOMERPEPE card (Series 2, Card 32) was likely the first significant NFT card ever for $38,000 in 2018 and then again for $320,000 in early 2021.

Oh, did I mention I'm the original Rare Pepe artist? I submitted an article called CHAMPAGNETNT (Series 25, Card 38) that satirized the then-current ICO boom, and eventual bust. The great thing about Rare Pepe's collection is that it serves as an illustrative time capsule of what was happening in Bitcoin (and cryptocurrencies) during the 2016-2018 era, warts and all. But this was all before 2021, before NFTs became bananas, so there wasn't a lot of speculation or profit expectations. They were just a group of guys (mostly men) hanging out on Telegram and making cool artwork to share with friends. I gave away half my card stash without even stopping to think if it was worth something “someday.”

Let's skip ahead a few years. It's early 2023, and Ordinals are making waves as the shiny new thing. What makes Ordinals a novel? A clever way to calculate first-in, first-out, which reimagines satoshi waves as individual, traceable particles. It's an abstraction, because satoshis don't really exist as individual, non-fungible units. But if everyone agrees on which accounting method pays first, we can all collectively believe it exists and therefore it exists! The wave function collapses thanks to the observer effect of ordinal theory. Once they exist, we can also pretend that owning a particular one corresponds to ownership of a particular inscription on the blockchain, just as a star registry gives you ownership over a distant sun. Ordinal theory is a lens through which blockchain can be viewed in interesting new ways. It's like magic!

So when I first found out about ordinal theory, I was completely blown away. I've always thought, “Well, you can't bring something new into existence simply by claiming it exists using an arbitrary counting method that is completely outside of the system itself.” But apparently you can! The artificial walls that had been built in my mind around “crazy ideas that could never work” suddenly disappeared and I could see a clear path ahead: I could make things up too! And this is how Bitcoin stamps were born. Well, not exactly. Ideas are a dime a dozen, but executing the idea is actually what brings it to life. I've had the privilege of working with some great programmers and engineers who were integral to the launch and development of the Bitcoin Stamps protocol: Kevin, Arwyn, Regan, B0B Smith, and many others. We were also fortunate enough to leverage a decade-old counterparty protocol, maintained through many lean years by braves like JDog and Joe Looney, to quickly bootstrap Bitcoin Stamps.

So what exactly is a Bitcoin stamp? Well, they are safe, tradable works of art that are permanently preserved.

Essentially, an image file, such as a JPEG or GIF, is converted into a long Base64 string – Base64 is a way to encode binary data as printable text – which is appended with a URI (uniform resource identifier) ​​“stamp”: and placed in the image file. Counterparty transaction description field. Explorers and wallets convert these long Base64 strings back into viewable images.

Here is the Base64 encoded string of the first Bitcoin stamp (#0):

Seal:iVBORw0KGgoAAAANSUhEUgAAAAUAAAAFCAYAAACNbyblAAAAHElEQVQI12P4//8/w38GIAXDIBKE0DHxgljNBAAO9TXL0Y4OHwAAAAABJRU5ErkJggg==

One of the big selling points of Bitcoin Stamps is the preservation of data once it is minted on the blockchain. How is data persistence achieved? The way the counterparty usually works is to encrypt the data in the transaction's OP_RETURN. The size of OP_RETURN is limited to 80 bytes which is quite limiting from a “storage” perspective. However, OP_RETURN works well for traditional NFTs that use an HTTPS pointer to a resource on a third-party server like AWS. Usually, when you tell people that art isn't actually “restrictive,” it's like telling them that Santa Claus doesn't exist. Sadly, it's true: the vast majority of NFTs over the years are merely indicators of off-chain art which makes them very vulnerable to bit rot. When the AWS bill stops being paid, the art is gone forever.

However, there is another way to encrypt larger amounts of data using standard counterparty transaction: multi-signature encryption. Essentially, when transaction data exceeds 80 bytes, the counterparty instead aggregates that data and encodes it into bare multi-signature keychains, using a 1-in-3 quorum where two of the three keys are used to deceptively store the data. The only actual recovery key in multisig that can spend the output is a burner: the artist does not actually have control over the corresponding private key. We call this technology KeyBurn because it ensures that data stored within a UTXO cluster cannot be removed through spending.

Bitcoin stamps happen to be very heavy on SIGOPS (signature operations) as a result of how the data is stored. Typical transactions do not have many SIGOPS, which has led some mining pools to reduce costs over the years, and not count them when including transactions in a candidate block. Everyone knows the maximum block size, but did you know that there is a limit of 80,000-SIGOPS per block as well? I was not! I found out when news first broke that F2Pool had created an invalid block that was rejected by the network for exceeding the SIGOPS limit due to all the stamp transactions in it, which were associated with very dramatic mining fees. An expensive mistake! Then they did it again shortly after. This means losing 6.25 BTC twice, not including transaction fees.

How is this different from ordinal inscriptions? Well, I would say that Rodarmor has come up with the most responsible solution for recording data on-chain by putting it in the SegWit witness data structure. This is a data structure designed with optionality in mind: Don't you want it? That's okay, once the node verifies the signatures, the data can be easily discarded. In fact, nothing needs to be downloaded before the block marked Assume Valid at all! The cameos are designed to respect the wishes of the contract's contestants, and what did Rodarmor get for being so generous?

Anger! How dare you store your JPE images on my node!

Bitcoin Stamps takes a different, less polite approach. Data encoded in multisig is not only kept in blocks, but also in UTXOs designated as unused outputs. This data is difficult to “prune” since each node, by default, maintains a complete copy of the UTXO set. So, while coins are stored in a contiguous blockchain data structure called a “witness” which, by design, makes pruning easy, Bitcoin stamps are stored in physical blocks in the underlying Blockchain data structure as well as a set of UTXOs held in memory by each node.

Here's how it breaks down:

Ordinal patterns: These are stored by post-SegWit, full archive nodes only. Pre-SegWit nodes would never know your beautiful JPEG files existed. sad.

Bitcoin stamps: stored by all node. a period. Pre-SegWit decade. The post-SegWit decade. Complete archive nodes. Pruned SPV nodes. They all get Bitcoin stamps. All nodes are important.

I like to make this analogy: ordinal patterns are like drawing with chalk on the sidewalk on a sunny day. Bitcoin stamps are like spraying graffiti on the sidewalk. He is very rude and antisocial. They are also very difficult to remove.

Now you're probably wondering: This sounds too good to be true Mike, what's the problem?

Well, there's a problem: permanent storage on the blockchain isn't cheap. Bitcoin Stamps does not use witness data, so it does not benefit from the witness discount. As a rule of thumb, Bitcoin stamps cost at least four times as much as Registration Ordinals. But hey, you get what you pay for, Amirite? And before you accuse me of fear mongering, there have been very real discussions by many core contributors about changing the default IBD (Initial Block Download) setting in Bitcoin Core so that newly created nodes don't see your JPEG files in the first place.

As I write this, Luke Dashjr's OCEAN mining pool has just been launched to great fanfare, and it appears they are deliberately not moving data past OP_FALSE as a means of monitoring ordinal patterns.

Although there are some theoretical methods for clipping Bitcoin stamps from the UTXO pool, such as UTreeXO, they are much more intrusive than ignoring witness data and come with their own trade-offs for full node operators. The arrangements, generously, make pruning easy while Bitcoin Stamps make it very difficult.

Minting Bitcoin stamps is much more expensive than minting ordinal coins, but we have found that the limitations can result in fine art. In the words of Leonardo da Vinci: ““Art lives from restrictions and dies from freedom.” The artist community that has grown up around Bitcoin Stamps tends to gravitate toward pixel art and SVG because they compress more efficiently than, for lack of a better term, raster art.

Size/cost constraints have also led to more recent innovations through redundancy where a JSON file is minted indicating a number of “attributes” of previously minted stamps. By reusing these “attributes”, the cost of a large cluster is reduced several times by removing redundant data across the cluster. Audio stamps that emit only the song notes (similar to the old-school MIDI format) and AI stamps that emit only a generative initial wave are additional innovative approaches that overcome limitations and provide new results.

Do you want redeemable Digen tokens? Yes, we also got it in the form of the SRC-20.

Would you like to participate in Bitcoin Stamps either as an artist, developer or collector?

There is a thriving Telegram community full of people who are happy to answer any questions you may have, which can be found here: t.me/BitcoinStamps

Here are some links to the ever-growing Bitcoin Stamps ecosystem:

• STAMPCHAIN.IO
• Sealed.Ninja
• RARESTAMP.XYZ
• STAMPVERSE.IO
• OpenSTAMP.IO
• THESTAMPWALET.COM

This article was published in Bitcoin Magazine “The question of inscription.” Click here For your annual subscription to Bitcoin Magazine.

The post Everything Old Is New Again first appeared on Investorempires.com.