Bankless - NFTs Attacking Bitcoin? with Eric Wall & Casey Rodarmor

Episode Date: February 7, 2023

In today’s show, we’re talking about NFTs on Bitcoin. Yes, you read that right. NFTs are now part of Bitcoin. Ever since the launch of the Ordinals protocol, NFTs on Bitcoin are all anyone can talk about. We brought on the man behind Ordinals and open source Bitcoin developer, Casey Rodarmor, and also Eric Wall, our Bitcoin expert to chat about all things NFTs on Bitcoin and what it might mean for Bitcoin’s future. ------ 📣 MetaMask Learn https://bankless.cc/metamaskshow  ------ 🚀 JOIN BANKLESS PREMIUM: https://newsletter.banklesshq.com/subscribe  ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://bankless.cc/kraken  🦄UNISWAP | ON-CHAIN MARKETPLACE https://bankless.cc/uniswap  ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  🚁 EARNIFI | CLAIM YOUR UNCLAIMED AIRDROPS https://bankless.cc/earnifi  👻 PHANTOM | CROSS-CHAIN WALLET https://bankless.cc/phantom  ------ Timestamps: 0:00 Intro 9:30 Ordinals 12:29 Ethereum vs. Bitcoin NFTs 14:28 Bitcoin Feature Timeline 17:55 Hard vs. Soft Forks 19:16 Bitcoin’s Segregated Witnesses 22:45 Ordinals Origin 32:11 Violating Bitcoin’s Core Philosophy 38:40 Illegitimate Bitcoin Transactions 41:13 Legitimate Bitcoin Transactions 53:55 Eric Prediction & Miner Game Theory 58:31 Bitcoin Fee Market 1:01:31 Fixed Bitcoin Fee Structure? 1:03:58 No Bloat Problem 1:10:38 Summary 1:16:21 Inscription 466 1:19:33 Bitcoin is Fun Again 1:23:50 Closing & Disclaimers ----- Resources: Eric Wall https://twitter.com/ercwl  Casey Rodarmor https://twitter.com/rodarmor  ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures 

Welcome to bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, and how to front run the opportunity. I'm David Hoffman, here without my co-host, Ryan Sean Adams. But nonetheless, we are here to help you become more bankless. And on today's show, this is a very special episode, we are talking about NFTs on Bitcoin. And this has been the absolute talk of the Bitcoin or world ever since Ordinals, this new protocol has started to fill up all the Bitcoin block space with J. PPEGs. Yes, you heard that right with NFTs. NFTs are now part of Bitcoin. And it's through this brand new protocol called Ordinals, which is doing some interesting stuff with Bitcoin blockspace.

And it has caused a bunch of controversy as to whether or not this is a legitimate use case of Bitcoin. Is that even a fair thing to charge an app with being illegitimate? Some people think that this is spamming the Bitcoin blockchain. Other people think that this is just what you're allowed to do with Bitcoin. If you pay the Bitcoin fee, then you're able to get into the Bitcoin blockchain. There's been some other conversations as well as what can you do with NFTs on Bitcoin. Is this really anything useful? Or is this just a place to put monkey pictures on Bitcoin? Did you know, bankless listener, that you can actually run Doom on Bitcoin, and I actually do play a little bit of Doom live here on the show. My two guests are Casey Rodomor,

who is the creator of Ordinals, this protocol that is filling up Bitcoin Blockspace with JPEGs and also and also my good friend Eric Wall who is somebody that I frequently tap into in order to get help navigating the Bitcoin world because as of course I don't pay nearly as much attention to Bitcoin as I do at Ethereum and just the way that Bitcoin works is fundamentally different than how Ethereum works. So I'm bringing in Eric Wall as a technical co-host, co-moderator to help me guide through this conversation with Casey. In this conversation, we talk about how ordinal's work, how NFTs even come to be on Bitcoin. We talk about some of the reactions from the Bitcoin community. While some leaders are offended, most people are actually more

okay with it than what might let on. And actually, Eric walks us through about how this new use case for Bitcoin is perhaps bringing a sustainable fee market to buying Bitcoin block space. While it actually doesn't blow Bitcoin actually makes it even more streamlined. So we actually actually perhaps get a win-win where Bitcoin can actually become more sustainable due to blocks-based demand because of ordinals, because of NFTs on Bitcoin, while also making the Bitcoin blockchain easier to process? How do we get this win-win? Eric Wall walks us through that and more. And of course, we poke fun at some Bitcoin fundamentalists, a hobby as old as time on the bankless program. But first, before we get to all of these conversations, we have to talk to our friends at MetaMask.

And MetaMask has built out this brand new educational platform. which they're calling Metamask Learn. You can go there and check it out at learn. Metamask.io, but it is an interactive course for you to learn about Web3. Through Metamask Learn, you can do things like be guided through how to set up your Metamask wallet, but also learn about core basic crypto principles, like what is Web3, what does self-custody even mean, what are NFTs, what is defy, what's digital identity? Metamask has this very elaborate, highly engaging and interactive course that again you can find at learn.medamask.io and it can be a place if you don't want to teach your mom or dad about crypto but they asked you you can send them here so you can offload

them onto again learn.medamask.io. So check that out there is a link in the show notes if you want to get you or your family members or your loved ones or whoever asks what is that crypto thing you can get them leveled up at metamask learn. It's not often that we do Bitcoin content here on bank lists, but when something comes to my attention via crypto Twitter or whatnot about new utilities on Bitcoin that is external to the actual base Bitcoin protocol, yet it is still a valid purchasing of Bitcoin Blockspace. I get really, really excited. I hope you're excited as well. Definitely pay attention, and I definitely take some time at the very beginning of the show to really parse out these details. The way that Bitcoin is constructed, the philosophy behind Bitcoin

is very different from Ethereum. Bitcoin and its soft forks, which we go through in this episode, Segwit, taproot. They're actually about taking features away from Bitcoin, allowing for the second layer around Bitcoin, something like Ordinals, to be built upon Bitcoin. And so rather than hardforking features in, which is the Ethereum philosophy, Bitcoin hardforks take features out, but that still does enable some expressivity on higher order layers around Bitcoin. So definitely pay attention to the different philosophy behind these two systems. It is a topic of conversation that's always super interesting to me. And you can unpack some of the ways that Bitcoin is built differently.

But of course, we are ultimately going to be talking about NFTs on Bitcoin and all the other second order consequences to that as well. So stay tuned for this great conversation with Eric and Casey. But first, a moment to talk about some of these fantastic sponsors that make the show possible, especially Cracken, who is our strategic sponsor for 2023. Because Cracken has been around for 11 years in the crypto space. And we expect them to be around for all the rest of the while. as well. And so if you are using a centralized exchange to get your boomer money into the

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to make sure you don't miss a drop in 2023. But really, the best part about bank Premium is hanging out with me, Ryan, and the rest of the Bankless team in the Inner Circle Discord only for Premium members. Want the Alpha? Check out Ben the analyst's DGENPIT, where you can ask him questions about the token report. Got a question? I've got my own Q&A room for any questions that you might have. At Bankless, we have huge things planned for 2023, including a new website with login with your Ethereum address capabilities, and we're super excited to ship what we are calling Bankless 2.0 Soon TM. So if you want extra help exploring the frontier, subscribe to Bankless

premium, it's under 50 cents a day and provides a wealth of knowledge and support on your journey west. I'll see you in the Discord. The Phantom wallet is coming to Ethereum. The number one wallet on Solana is bringing its millions of users and beloved UX to Ethereum and Polygon. If you haven't used Phantom before, you've been missing out. Phantom was one of the first wallets to pioneer Salana staking inside the wallet and will be offering similar staking features for Ethereum and Polygon, but that's just staking. Phantom is also the best home for your NFTs. Phantom has a complete set of features to optimize your NFT experience. Pin your favorites, hide your uglies, burn the spam, and also manage your NFT sale listings from inside the wallet. Phantom is of course a multi-chain wallet,

but it makes chain management easy displaying your transactions in a human readable format, with automatic warnings for malicious transactions or fishing websites. Phantom has already saved over 20,000 users from getting scammed or hacked. So get on the Phantom wait list and be one of the first to access the multi-chain beta. There's a link in the show notes, or you can go to phantom.app slash waitlist to get access in late February. Bankless Nation, I want to introduce you to Casey Rotimer. Casey is an open source Bitcoin developer who is building ordinals, which has caused a little bit of a stir in the Bitcoin community,

but overall, a bunch of conversations as to what's going on in this small corner of Bitcoin, which has now been the host of many cool NFTs. At least I think they're cool, other people don't. And also joined with me is Eric Wall, who is my, substitute teacher for Ryan Sean Adams when we need to talk about Bitcoin and all things technical Bitcoin. So Eric is going to help me guide us through this conversation as probably one of the most knowledgeable people about Bitcoin and other related technologies. Casey and Eric, welcome to Bankless guys. Thanks for having me. It's awesome to be here. Awesome to be able to talk to your viewers.

So yeah, thanks so much. Always a pleasure, David. All right. So let's get this thing kicked off. This has created a bunch of hubbub in the Bitcoin world. But I want to start first and foremost with just diving into ordinals specifically. So, Casey, can you just walk us through ordinals? What's ordinals? Yeah, absolutely. So there's kind of two layers to the whole thing. There's the base layer, which is this thing called ordinals. And then on top of that, there are inscriptions, which are the NFTs. So ordinals are a convention, essentially, for numbering individual Bitcoin Satoshes. So they have a unique individual identity, every single Satoshi. And track. them across transactions as they are spent. It doesn't require any changes to Bitcoin. It doesn't

actually take up any data on the base layer, and it is purely an opt-in convention. It doesn't really affect Bitcoin fungibility, which is often a question that I get asked. It's just a convention for people who want to participate in it, like a lens that you can choose to see the same data that everybody else is seeing, but with these additional Satoshi identifiers and tracking. So this was created. I created it, although there was actually a Bitcoin Forum talk post in 2012 that I found after I came up with it with exactly the same scheme. So I think it's actually kind of like a very natural extension of Bitcoin that when you

think about it, everything kind of falls into place. So but then those ordinal numbers or trackable Satoshis or whatever, those can be used to sort of contain content or be assigned an NFT. And this is called inscriptions, which is sort of a top layer. So an inscription is just a piece of content that is included in a Bitcoin transaction, in a part of the transaction called The Witness. And that content is arbitrary. The content model is very similar to the web containing a content type,

which is a string that identifies what kind of content it is, and a body, which are just content bites, that's included in the witness, in a Bitcoin transaction. And then the inscription is made on the first set of the first output of that transaction. Sort of creating this digital artifact, which is then transferred using the ordinal protocol or ordinal theory when I'm being acute. Yeah, it creates these things. I like to call them digital artifacts because the term NFT is very overla. loaded and refers to a lot of different things. And I think these have very unique properties that

people who collect NFTs will like. But yeah, that's the basic idea. And just to make it crystal clear, from the Ethereum perspective, when you create an NFT, you're actually creating a digital object on Ethereum, an actual token. That's not what's being created on Bitcoin. Is it the actual individual Satoshi that is the transferable unit? That is what we are kind of colloquially calling NFT. You said you are assigning a lifespan to an individual Satoshi. That's right. And then the Satoshi has data appended to it. And these two properties together start to appear to look and feel like the NFTs that we know on Ethereum. Is that fair? Yeah, that's right. I mean, I think, you know, things are NFTs, which have certain properties that users are looking for. They want them to be unique.

They want them to be transferable. They want them to have a piece of content associated with them. So I think whether or not these are NFTs is sort of up for everybody to decide according to their own definition of what an NFT is. But yeah, that's correct. Essentially the SATs are already the tokens and they're sort of on the Bitcoin base layer, they are very fungible. If you view them through the lens of the Ordinals protocol, they become non-fungible. And if you then additionally use inscriptions and have like an inscription wallet or an inscription explorer. So the open source tool, which is the wallet and the explorer that I wrote with additional contributors is called Ord. And the block explorer is on ordnals.com. And so if you're

using that tool, then you can see the individual stats. You can see where they are. And you can see the content that is associated with them. So yeah. And then that behaves like an NFT. You can create content that is then in your wallet and then you can send it on to others. The way that you're articulating this, I think, is diving into a particular philosophy that Bitcoin has, where from the Bitcoin blockchain perspective, it doesn't know what is going on with the Ordinals, but then you use this word from the ordinal lens, as in you actually have to opt into looking at Bitcoin through this particular protocol called Ordinals, and then all of a sudden this NFT expression is able to become out of that through NFTs, but like a normal Bitcoin node doesn't actually know what the hell is. going on here. And Erica, this is where I want to turn to you, and maybe you can help us tell this story. When did this feature, some bitcoiners might call it a bug, but I'll call it a feature, when did this feature become like a possible in the Bitcoin blockchain? And can you kind of help just articulate this difference in vision of how the Bitcoin protocol works, which is what more

bankless audience might be used to with the Ethereum world? Yeah. So creating different clients that interpret what is going on inside the Bitcoin blockchain and sort of building meta-procels. on top of the Bitcoin blockchain has existed for a long time. Omni is such an example, which is the first place where USDT, Tether, made their stable coins. Mastercoin and counterparty are also such protocols. The thing with ordinals, and especially in how the inscription part, is made leverages taproot. So we've always been able to embed arbitrary data inside the Bitcoin blockchain using up return, but it was limited to, I think, 80 bytes.

So to the extent that it's been possible to create a protocol that embeds arbitrary data on Bitcoin, that's always been possible. It just became with Taproot, it became significantly simpler to do that in single transactions to embed sizable sums of data in a single transaction. So it's always been possible to create like an NFT layer on Bitcoin. It already exists, like rare pepies, exists. on counterparty on Bitcoin already today. It's just now you can make much larger content types

due to certain limits that were removed in taproot script versus regular segregated witness scripts. I don't know if I'm explaining that in the most simple way, but the way that you can think about it is that it was always possible to embed arbitrary data into Bitcoin. And then in 2017, segregated witness came and we got this extra chunk up to four megabytes of witness data could now be assigned to Bitcoin blocks. However, in individual transactions, there were still

limits to how much data you could put into individual transactions. After Taproot happened, you could basically make a single transaction that takes up the entirety of an entire block. So Ordinals sort of just leverages Taproot to create a more user-friendly experience of more easily buildable and toolable NFT system for Bitcoin. And the language you're using, like, Bitcoin got Segwit, then it got Taproot. If you come from this from an Ethereum perspective, you probably think these are hard forks, but they're not. They're soft forks. Eric, can you kind of walk us through? It feels like we're adding something to Bitcoin when we add Segwit. Is that really the right perspective to take?

And how we already have like this capability to put NFTs on Bitcoin, but then taproot happened and now we have more of this ability. Can you kind of just walk us through how to think about this? Yeah. So a hard fork is an expansion. of the consensus rules. A soft fork is a contraction of the consensus rules. But even though that we're contracting the consensus rules,

when you're contracting, it does actually mean that you can attach extra rules that need to be validated. So all the previous rules, you need to validate them, but now you need to validate extra rules. So actually the validity space is shrinking when you're soft forking.

And because you're adding extra rules to validate, that also means that you can add extra functionality. So you can actually increase the block size through a soft fork and add new types of scripting features inside of Bitcoin using soft forks. And so now there's like the,

and maybe there always was, but there's like this two parts of Bitcoin block space and this part is kind of fuzzy for me where there's like the normal, I make a Bitcoin transaction and that data goes into one part of Bitcoin. And then there's this other part of Bitcoin, which I think Taproot really unlocked,

which is where this NFT data is going into. Can you also walk us through that? Actually, the other part of the Bitcoin data was unlocked in 2017 with segregated witness. Segregated witness stands for like segregating the witness data. And witness data is a strange word, but the easiest way to think about it is maybe like signatures on transactions are witnesses. So in 2017, we wanted to increase the block size of Bitcoin. It was a big political push to increase the block size limit of Bitcoin. But we only really increased it for this witness data, these signatures. And the reason for that is that it's okay to have much more witness data in Bitcoin

because after you validated a signature, you know that a transaction is valid, and now you don't actually need to keep it on your full node anymore. Because you have validated, you can just say, okay, I know that this transaction was valid. I validated the signature. But after you validated a signature, it doesn't really serve a purpose on your note. node anymore. So you can throw it away. Therefore, the witness part of the data on the blockchain got segregated out from the regular data. And the big change here was that because this data can be pruned on full nodes without it stopping being a full node, we changed how much

it cost to embed such data into the blockchain. So now there's a 4x discount for this type of witness data. So it's four times cheaper where you have something called a virtual bite. So even if you put 100 kilobyte file in the witness data of Bitcoin, it's going to get counted as if it's 25 kilobytes because we discount, that's why it's called a Segwit discount, we discount how much that data actually counts for because it's not necessarily going to be on all full notes forever. So we can allow that portion of the data to grow faster. So it's kind of like, for an Ethereum, I would say, like it's kind of like blob space, you know, it's this part of data, you know, in Ethereum with EIP 4844, we allow the block size of Ethereum to grow rapidly

because that block space that we're increasing, it has nothing to do with execution. We're not validating that to any extent. It's just raw data. And also, it's getting thrown away. It's auto pruned every two weeks. This witness data in Bitcoin is not auto prune necessarily, but you can manually prune it. So in that way, it is sort of similar to blob space in Ethereum. Right.

And it's really that the economic cost that's lowered that really unlocks the ability to more viably embed data into the chain. And I think Casey, that's where Ordinals really has carved out its spot in the Bitcoin world, which is like, oh, there's this data that we can take advantage of that's cheaper than the rest of the data. And that lets us do things. Casey, this seems to have always been possible as soon as we had Segwit. When did the idea for Ordinals come into your brain? Yeah. There are actually some other important advantages of Ordinals that we can get into. but just to say them really quick, it's that because the Ornals Protocol can, these like made-up

stats can be stored in normal Bitcoin addresses and transacted with normal Bitcoin transactions and kind of sit in normal Bitcoin UTXOs, it means that there doesn't need to be a parallel infrastructure entirely for wallets and services. The Ord utility, it uses the Rust Bitcoin Library, which is a great, just sort of standard Bitcoin library for its transaction construction and signing. And it also uses Bitcoin. core is the backend for its wallet for a lot of transaction, also some transaction construction and signing. And so I think that's another one of the big advantages is that it integrates a little bit more cleanly into Bitcoin. But yeah, that was an awesome summary by Eric. Everything,

totally completely accurate. And yeah, like so I started thinking about this in early 2022. I've done some generative art. And I sort of saw that, you know, when NFTs got popular in 2017, I wasn't super interested. I just didn't see anything that really spoke to me or anything that I could contribute to as a creator. But then when I saw really, really cool algorithmic and generative NFTs start to get really popular, I thought, like, man, like it would be awesome to be able to make these myself.

And I think I actually wrote a test ERC-721 contract, but for a variety of reasons I didn't really feel like the tooling didn't strike me as much. very good. There are some sort of technical issues. So like every NFT on Ethereum is a separate smart contract. And so technically they can kind of have different properties. You need to audit them for security, for immutability. You need to audit them for where the content is stored. Some of them are, you know, totally secure, totally immutable, no backdoor keys and content is stored on the Ethereum blockchain. Sort of going down in the tiers of like desirability for most

collectors. You know, then there's things that are on IPFS, which are stored by hash. But IPFS is basically like BitTorrent, and people can stop seeding content at any time. Systems like RWeave, you know, I don't want to get too mean or controversial or anything, but I'm not convinced by the economic incentives of those systems. And so as a result, I just sort of felt like I couldn't really be comfortable. Like, I could make NFTs on Ethereum, but I couldn't necessarily be comfortable, like encouraging people to buy them. And so I looked for a way to do it. And that's just because the assurances that the data of the NFT could not be completely fulfilled because Ethereum couldn't host enough of that data? So I could have put the data on chain. Sure, but that's really expensive,

right? I could have made a contract without any upgrade keys. I would have been a little bit unhappy having people like have to audit the code. The way that NFTs are commonly sold on Ethereum and like, I'm fuzzy on this. So correct me if I'm wrong is that, you know, when you sell an NFT on OpenC, you give OpenC permission to transfer your NFTs. So that being the standard by which NFTs are traded, also not very enthusiastic. It really wasn't any one thing. It was just sort of a, you know, loose collection of concerns. So then I, you know, I'm a Bitcoin developer. I used to be a Bitcoin Core contributor, although I'm honestly not exactly comfortable calling myself like a Bitcoin Core dev, because that was a very minor one, and that was a long time ago.

And so I started to look for a way to do this on Bitcoin. So in early 2022, I just started noodling. And one technical difference between Bitcoin and Ethereum is that Bitcoin uses the UTXO model. So a wallet is just kind of these collection of coins. And these coins, you know, they don't have any like permanent identity. They just kind of get created and then destroyed. And so for something like an NFT protocol where NFTs are like permanent, and they don't just go away when you like spend them, you know, they have to be transferable.

That's when I started noodling on this like ordnals thing, this low level, this like trackable sats. And I didn't know how exactly I was going to write the NFT part of the protocol. But yeah, so noodled on that for a long time. And when I came up with the idea of making sats trackable by this pretty simple algorithm, it's basically just you have these sats on the input and you have the sats on the outputs. And then you imagine that they just move. in a straight line across. The first stat of the first output is going to the first set of the first input. Anything extra goes to fees and appears out of the Coinbase reward. And once I had that,

all the pieces kind of came together very quickly. And so started writing an index initially, which could just track these sat locations and see if this algorithm was essentially tractable to use it all. And then started working on inscriptions, which is the sort of assigning content. Like Eric said, it's always been possible to store arbitrary content on Bitcoin. It's just been inconvenient. You know, operturn has the size limit. You could do it in pay to script hash, but there are these standardness limits. You could do it in Segwit scripts in the witness, but there are these weird standardness limits there too. And then Taproot, which I think went live at the end of 2021, that basically just removed all those standardness restrictions, which actually had not been there

to specifically prevent arbitrary data from being published on the chain. There were actually things like, you know, if you're constructing a transaction, you don't want to run into one of these weird restrictions that all of a sudden makes your transaction like non-standard and can't be relayed. So yeah, and then so came up with the construction for putting the content in the witness, which is just sort of like an op false, op-if, and then a bunch of data pushes and an op-endif. and that makes all the data pushes between the op-if and the op-end-if just get ignored.

So from Bitcoin's point of view, it's a no-op. Yeah, and then come up with the assignment algorithm and the wallet and the block explorer where you can actually view these things. So, yeah, that is the rough timeline. And then I think we did a CigNet release in like November of last year. And we got a lot of good testers and a lot of use. And then we did a mainnet release. I think it was January 20th of this year, 2023.

And then, like, things just went absolutely insane. Like, it's been absolute madness, absolute chaos. And I think part of the reason, like, lots of memes, lots of tepe's. And one of the reasons that there's been so much chaos is additionally because of this controversy, you know, should Bitcoin be used this way? Is the discount unfair? Is this an attack vector on Bitcoin? Is this an exploit?

Like, all this drama has certainly. propelled the project into the public eye. Yeah, certainly. And I think that's where I kind of want to turn the conversation to next. But one last question, just to really clarify this, when you made ordinals, the intent was to be utility for art, right? Like it was an art-based project? Yeah, that's 100% correct. And actually, the Ordinals protocol could be used for fungible tokens, you know, for ERC-20 style tokens. But it's actually not very good for that. It's pretty weird. It has a lot of weird details of how it works.

I think you could do that. And if it gets really popular, it's actually can be a convenient way to do that. One nice thing is actually you can do these protocols semi-privately. So you and your friends can elect to give special meaning to some of these sats and then track how they move. But then that special meaning doesn't need to be published to the chain. And you can all sort of agree the sat ranges that you care about and where they are without having to reveal anything to the world. But to answer your question, yeah, like I don't really consider myself.

artist. I make like programmer art. But yeah, it was really focused on how to do art and how to do this like NFT use case. Yeah. So this is where I want to zoom out and get into the mindset of a bitcoiner or the various flavors of bitcoinsers that you see out there. And so this is where I want to turn back to Eric and unpack this story a little bit. We'll talk about to what degree this is offensive to all bitcoinsers or like how many a bitcoins are offended by this. But Eric, putting your offended bitcoiner hat on, how does this violate, Bitcoin or philosophy. And can you just like tell this story? Yeah, I think it's it's pretty easy for me to express that because when I originally discovered the ordinal system, I myself thought that this

doesn't sound like such a great idea. I had to think about it for two days until I came to the conclusion why it's not a bad idea. But the way to think about it is that like we've had issues with people trying to build non-financial use cases on top of Bitcoin since forever. And one thing that you can sort of think about, like, why would that be undesirable? Well, if you think about board ape drops on Ethereum and it just causes these fee surges, like, that's one of the kind of problems that you have when there's demand for your block space that isn't tied to this financial use case. So instead of us transferring ether, paying each other with money, doing finance stuff, we're doing monkey pictures and that is crowding out the finance stuff. That's what you're trying to say?

Yeah, it's causing volatility in the system that is not. as predictable as the financial aspects of it. But even Satoshi was initially thinking about creating ENS-type systems on top of Bitcoin. And it was called BitDNS. And then I think it was Satoshi who decided that actually let's create another coin for it instead. Let's create name coin. And then we've been trying to create all these drive chains and side chains to Bitcoin

so that we wouldn't have all this type of activity on top of Bitcoin just to keep the Bitcoin protocol. as uncomplexed and as unencumbered by other incentives going on in the system, because we sort of think that Bitcoin is too complex as it already is. But the reason that I didn't like ordinals or inscriptions especially, actually, I think ordinals are kind of cool. I think one thing that you describe very well on your blog, Casey, and that Dennis describes on his blog also very well, is that, you know, if you have a bunch of stocks in your

brokerage account, they look completely fungible in your brokerage account. But depending on, you know, you have this first in, first out principle. And that's how the taxman decides how much tax you pay based on, like, are you selling the ones that you bought first? Or are you, so there's queuing systems and there's just ways to think about like all your stocks stack together and are you taking it from the top of the stack with the bottom of the stack? That's sort of a great way to understand the orinal system that I think you described on your blog pretty well.

But the reason that I didn't like inscriptions and inscriptions to just repeat. what Casey said, inscriptions are the part when you embed these data blobs that are attached to specific Satoshis that are getting tracked in the system. So called because you're inscribing quote unquote the SAT. Yeah. And I suppose the thing that I didn't like is that so I've grown over the years to actually appreciate NFTs a lot on Ethereum. And one of the things that I really do appreciate with NFTs on Ethereum is that you can

create these types of arbitrary complex auction. logics, minting rules. And right now, for example, I'm doing one NFT project where I'm implementing a Harburger tax, which is like pretty amazing and undiscovered way of controlling ownership and incentivizing churn. Harbinger taxes are sick. The economists love them, man. Yeah. And you can do that on Ethereum, but I don't think that you can do that with Ordinals inscription NFTs. So I kind of thought that Bitcoin, even though you can make NFTs on Bitcoin, the things that I like about NFTs are these programmable parts to it that make them, you know, potentially more interesting.

So I thought, you know, even though you can do it on Bitcoin, I mean, we should probably still be doing NFTs on Ethereum. And therefore, I don't like that NFTs are now taking up space on Bitcoin. But I came to a different conclusion. Maybe I don't want to take up too much time going through how my own thought process went like maybe we can go back to that. But I've since then come to the conclusion that actually ordinals are not. bad for Bitcoin. If you want me to dig into it, I'm just going to sort of stop here and give you a chance

to interrupt. Yeah, Casey, if you have any thoughts, go for it. I have a few more other topics I want to get to first before we get to that part of it. No, totally, totally fair. And yeah, it's true. Like the programmability of inscriptions and ordinals is very limited. I'm, you know, like, you can't just write arbitrary code and deploy it. And I'm, you know, I'm working on, for example, like a trustless swap, which would let you do sort of these, like, trustless trades. And I have to like figure out how I can like line up the inputs and the outputs and use the different SIG hash flags to like get this very simple functionality working. So I'd say, you know, inscriptions probably occupy like a distinct market segment, you know, where they're not programmable. And so there are lots of things you can't do. I'm really stoked to see how the Harbinger tax goes. That's something I've been thinking about for NFTs. And like I just think it's awesome for people to start experimenting with things that are, you know, more incentive compatible, you know. The philosophy that I've gathered is that there's this word that's gone around there, illegitimate Bitcoin transactions, as in this is not legitimate.

And I can't remember who it was. It was another Bitcoin leader. It was Dennis. How do you pronounce his last name, Porto? Porto. Porto. Porto. Alfoncée.

It's Dennis, anyway. He wrote the blog post on ordinals that got me up to speed and interested in it. So that's sort of why, you know, I jumped in and started to. transfer my Trump NFT cards onto the ordinal inscription systems. That was a big early inscription. That was a big boy. I noticed it. Yeah. It was the same guy

correct me if I'm wrong, Casey, but what I heard is that the guy who made inscription number one, which is a dickbutt, is someone who looked at the ordinal system when it was sort of in beta, maybe on CigNet, and just hard forked it and deployed it on Mainet without

you being ready for it. And then he made a dickbutt on Mainnet using the ordinal system. So that was the same guy. Yeah. Yeah, that was the same guy that made the Trump NFT card for me using the original system. Correct me if I'm wrong. No, yeah, that's roughly true. It kind of didn't need any changes to be on Cignette versus Mainnet, but kind of worked with both. But we had this artificial limitation in the client that if you tried to run out on Mainnet, it would complain because we didn't want people creating inscriptions that might get invalidated if we changed the protocol. Luckily, we never needed to change anything that would invalidate

an old inscription. So all inscriptions that have been made on Mainnet are valid and will continue to be valid. But yeah, so I made a test inscription to see how it works and I was like, okay. And then like immediately like dick butt. Like game developers have this term. It's a TTP, which stands for time to penis. And basically it's the time between when a user like downloads or installs your game for the first time to the point that they can make another user look at a penis or penis-like object, you know, and the ordinals, the inscriptions, TTP, catastrophically low, instruction number one, second one is a dick butt. We have to give a shout out to the guy who did it.

His Twitter handle is Rot 13 Maxi. He's a G. He's awesome. Yeah, super great guy. I agree. So the Bitcoin or philosophy, a Bitcoin or philosophy is that we want Bitcoin to only be about money, monetary premium, monetary premium, monetary premium. And so that's what Bitcoin Blockspace is preserved for.

And if you put anything else in a Bitcoin blockchain, that's not about transferring Bitcoins or using BTCS money. That's like, quote unquote, illegitimate. And I wanted to pause and camp on this legitimate word. To you, Eric, what makes a legitimate Bitcoin transaction? And is this even a fair question to ask? I think that you have the question slightly misframed because the thing that Bitcoin Maximists have been saying is that actually financial transactions are the most economically dense type of activity. that will just bully everything else out, which isn't actually necessarily true.

I mean, we have one Satoshi per byte fees, like the minimum possible, and it's all financial transactions. And now the fees are actually going up, and it's because of these dickbutt pictures are actually finally, you know, it might be possible that the dickbutts are saving the security budget problem for Bitcoin.

Like the dickbutts may actually make it so that we don't need to increase the number of, coins and Bitcoin. So they may save the problem. Like, what could be the solution, but some bitconers are currently, like, really don't want that kind of stuff because they believe that it's going to weigh down the chain and fill it with nonsensical data, which is actually also an incorrect interpretation of what the long-term consequences of ordinal inscriptions actually will be, in my opinion. And I think Casey also echoes this, that when we're talking about bitcoins and their distaste for ordinals and inscriptions.

I actually did go to one of my most, one of the maxis that hates me, basically. And I said, you know, why don't you go to your community and just do a poll and see what do you think? Like, what do you think about the ordinal's inscriptions? And it wasn't like 90% hated ordinals or anything. Actually, 50% of people said, if they pay the fee, it's fine. You know, a lot of bitcoins are libertarians.

Maybe you could argue that the tap route made it very easy to embed arbitrary data onto Bitcoin. Sort of like a mistake. You have Luke Jr., for example, saying that people are lying and tricking the code. Because if you look at how Casey is inscribing data into these blocks, is using this tap script, which is basically like you have op codes, and he has one op code that says OP false. And that means that when that transaction is executing, the Bitcoin node doesn't actually. actually even look at, it doesn't even actually execute the upcodes that comes after OP false. So you can put tons of chunks in there.

And also, Casey, you said that there are no restrictions or limitation whatsoever in Tap Route. That is not like necessarily true. There are still like a thousand elements on the stack that that's a limit. And then there's also a 52 byte limit of each element. But you can circumvent that because of the OP false upcode, I'm going into the things that people are not going to understand. Let's go. Because of the OP falls upcode, Bitcoin doesn't even look at all the other stuff that's going on

inside of that tap script. So none of the other limits are actually triggered. So in my opinion, it is kind of an exploit in some way, in my opinion. Yeah, so it's almost totally correct. Like, it's actually a 520 byte limit to each push. And it applies even to unexecuted pushes. So that's why the body of a inscription, like the inscription content, is chunked into 520 chunk pieces and then concatenated. And the 10,000 stack limit, that's also

like just for the depth of the stack at any one time, like after an op code. So yeah, it is a hack. Yeah. And then there is the standardness limit, which is why, you know, the main block, that massive single inscription block, which I was very surprised to see so soon. I was like, maybe that will happen eventually, but not now. You're talking about the four megabyte block that happened that had to be in collaboration with the minor, right? Because you can't brought cast those transactions on Bitcoin directly. That's right. Yeah, exactly right. Yeah, yeah. Uniswap is the largest on-chain marketplace for self-custody digital assets.

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And make sure you never lose another air drop. One interesting thing is actually, it looks like the Opulse, Op-I-F construction was actually anticipated by some of the authors of Segwit because they didn't want you using Op-Push-Up-Drop, I think, which would be another way of pushing data and then, you know, removing it from the script so that it doesn't do anything. So one dev actually commented that when they were thinking about it, that like up false,

up if would be the preferred way to stick data in. Now, that's not an endorsement. Well, I think it's a hack in the sense of like a weird technical thing that is a little inelegant, not really in the sense of hacking it and an exploit. I don't know. That's up to the Bitcoin community decide. Well, Luke Jr. says that you lie, then you trick the code. So, I mean, that's right.

Yeah, yeah. That's okay. I'll just go to a priest and say some Hail Marys or something and then hopefully it'll be okay. Peter charge said that every time you make an inscription, you have to apologize to your note. So there are those kinds of people. But to get back to the point is that 50% of even the people that people that follow hardcore maxis are libertarian and think that if these are the consensus rules that we all agree to, then let people use that block space. So I don't actually think that there is a majority consensus for soft forking away this TabScript functionality or TapScript exploit or however you want to call it. The thing that made NFTs, big NFTs possible on Bitcoin. I don't think that there's consensus for that. I actually think that the most of the Bitcoiners in this case are actually, they have a fairly

reasonable take. The only problem is that the sort of the high priest that we all have come to trust and respect in Bitcoin, they've been very loud in saying, like, we should work. work with the miners and come up with ways to censor this. So they're giving all Bitcoiners a very bad look. But the Bitcoiners underneath that, they're starting to see now, actually, that some of these people that we've respected for a long time in Bitcoin can have pretty, you know, and not completely thought out ideas.

I need to back that statement up a little bit by also explaining why I don't think that NFTs on Bitcoin are such a bloaty problem in order to make people understand why I say that. But that's going to take me like five minutes to explain. And so I'll pause again and leave the word to you guys. Yeah, that's totally right. And it's like I help run a Bitcoin meetup in SF that meets once a month. Tons of Bitcoiners show up.

I go to a bunch of local Bay Area Bitcoin meetup events. And like most Bitcoiners think it's super fun. I mean, when I say most Bitcoiners, I'm just saying like the slice of Bitcoiners that I interact with in real life. They think it's fun or they don't really care. They're like, okay, whatever, you know, people are going to do things with Bitcoin that I like don't really care about. And so, yeah, it's been just a few, you know, well, I don't know a few, many people have been upset, but it's been, you know, one sort of weird maxi contingent, the toxic maxi contingent.

And a lot of, like you said, a lot of very weird takes from people who I feel like should kind of know better. Like, I mean, like, the miners should censored is like kind of weird because one would think that miners would be incentivized to include such transactions and collect the fees. and then miners sort of attempting to set a higher fee rate for certain transactions implies a level of, if you just try to do it naively, it implies a certain level of collusion between miners to agree to enforce this policy and essentially not undercut each other by doing this. So yeah, it just goes to show that like the Bitcoin community is hopefully diverse, hopefully fractured. A lot of people have a lot of different opinions. And I'll offer a prediction on top of that, which is that if you can make a full block,

like a four megabyte NFT, which we've seen. The one we saw was 3.94 megabytes that we saw. Yeah, I noticed it had a few extra transactions in it. I was like, guys, come on, you've got to make it the whole block.

I think in this case, you know, they were probably trying to get there first. And also, if you look in a block explorer, you can sort of see how this giant ordinal inscription just squeezes these tiny, tiny other. So maybe they did it to just show the scale,

just show like this is how big. Banana for scale kind of thing. Yeah, yeah, maybe that's why I did it. Well, I'm going to share my screen here so we can actually look at some of the things that we're talking about here because I got some tweets and some visualizations pulled up. This is the way you were talking about, right? Eric, where we have this just massive block. Oh, yeah, yeah, yeah, sorry. Yeah, yeah, I was going to make a prediction about this.

So, yeah, if you look at that block, if you look at the fee, it says that it's zero, Satoshi. Like, it didn't pay any fee that transaction. So why did a minor include it? Well, if you think about it, well, the minor has. to receive some, and this is actually good that the miner must have been paid out of band. So they got paid, you know, from the... Over the counter. They got paid in a different channel.

They probably said, you know, send some bitcoins to this wallet and will mine this huge-ass NFT for you. And they had to go directly to the miner to make this happen because otherwise the standardness rules, the policy rules, would have rejected it. So the miners are in a unique position where they can include these giant inscriptions, they take up entire blocks. And that's so special, that's such an exclusive thing that I think that this miner could have asked for, you know, a week ago, people would pay in total in transaction fees like $1,200. And what do you think, like, if you're an Ethereum project or an NFT project and you want to make one block, one giant NFT, I think that you could charge for short $10,000 for it, $20,000 for it.

You could charge maybe $50,000 to put that in a single block. And if that's the case, if you put a huge transaction like this and if you put also a giant transaction fee on top of it, then you actually screw up the game theory of the Bitcoin blockchain because these miners are going to start to re-wore each other's blocks just to include the transaction, which is why it's much better that the people who do offer this payment for the inclusion of the NFT, they go directly to the miner. They pay the minor. Here's the money.

Because then there's no point of reorging out that big NFT by another minor because that's zero Satoshi's per byte. So this is actually a game theoretically safer way to include those large transactions. And all the people that are saying now that, you know, we have a four megabyte block and it pays almost nothing in fees, they just don't understand the relationships between the NFT artist and the miner and that it has to be out of ban to preserve the game theoretical properties of Bitcoin. And I think this minor that did it look sore, they've just invented a new business model.

There are going to be people that are lining up to get full block inscriptions, and they're going to be able to charge $10,000, $20,000, $50,000 per full block NFTs. And they're actually going to start to outcompete other miners because they're making so much more money. While the other miners are making like $2,000, $3,000 per block in transaction fees, looks or it could make $20,000, $40,000 per block. So the whole game, the entire game of Bitcoin mining has just changed forever with this. congratulations, Casey. You just changed the game for Bitcoin. Wasn't expecting it to happen. Yeah, I think if this became common enough that certain miners were making more money, we'd have to think about what is the game theory of that reorging and possibly consider lifting the 400,000 weight

unit standardness limit so that these could just be in the mempool. Just because it would mean that, well, like, if some pool has 1% of the hash rate, maybe you won't bother trying to get them to accept your, you won't even go to them when you want to mine your 4MG block. And so that would mean that the pools with more hash rate would maybe get a disproportionate amount of the revenue. And we probably don't want that. So it might turn into a question of whether that 400,000 weight unit standardist rule is lifted so that these can just be in the normal mempool. And it's an interesting question about that reorg attack, because it is true that very, very large transactions, not only that, they also create an all or nothing kind of situation

where you can include that transaction or you can include all the other transactions that are waiting. You have to select from both of them. So it reduces the cost a little bit of like kind incentivizing miners to mine junk, you know? But yeah, many, many interesting questions. I can't believe that things are heating up like this. The really interesting thing I think about this is, of course, the fee market and Bitcoin's sustainability model. Eric, you're talking about how like this fixes the fee market problem. some Bitcoin Maxis, the archetype of Bitcoin Maxis that I have in my head, actually deny the problem of the fee market in the first place.

And so will this argument even work on them if they can't even admit that Bitcoin might not actually have a sustainable long-term security structure? Have you had any of these conversations? I mean, I'll try to say this in the nicest way possible, but if you don't think that you need a fee market in order to incentivize the security of Bitcoin, I'm not sure if you're qualified to participate in the conversation. I don't know how to say it in a nicer way. That's like it's not a well-reasoned argument that I even feel like it has to be addressed.

I don't know how you feel, Casey. Is there any way that you can steal man that argument that we don't need fees in Bitcoin? It'll be safe. I just don't understand how you're even supposed to understand such a weird argument. Yeah, I think I can probably steal man, like maybe like the most reasonable version of that is like, well, like there are a lot of low fee proof of work chains. that don't have much fees, and, like, those don't seem to really get. But they have issuance. We're talking about post issuance.

So there's no. Yeah, right. Yeah, yeah. But that issuance is very, I mean, no fees. The issuance is worth very little if it's, you know, some alt coin. But that is, I don't really think that I can steal man this argument because, like, because the subsidy is declining. It's getting cut in half every four years.

It's going to go to nothing faster than people think. People say like, oh, you know, it's 120 years before we have to worry about the subsidy declining. Listen, in 120 years, for the last four years, the subsidy is going to be one sat per block. Like, this is not going to provide any security budget, although ordinals give sats names A through Z, and the names get shorter as they go on. So the last 26 sats to be mined will be Z through A. So maybe that will help compensate. But assuming that people don't go crazy for like rare and exotic sats, yeah, we need a fee market. There's just no way that Bitcoin long term can survive without a fee market.

And, you know, like anybody who's very religious kind of about anything, not to pick on religious, but if you're like a fundamentalist about something. And you just think like Bitcoin is perfect and it does not have any problems. And sort of you just deny any hawk of problems. I mean, it's just not a constructive viewpoint that you can really. engage with successfully. So this all happened in this last month, which is crazy. This is one of the first, like, if you call this a Bitcoin app, Bitcoin apps I've seen adopted so quickly, so just furvously. And we've already seen like the fees actually start to show up on Bitcoin, the additional block space demand. And so this is why this has captured mine and Ryan's attention.

It's like, oh, like block space demand. That's like, that's like block space demand is a paradigm that Ryan and I live by. And now I'm seeing this like have this use case on Bitcoin that's creating block space demand. But it's only been a month. You know, it's only been a month. Maybe this is just a flash in the pan. Maybe this is just like, hey, this is a fun meme. Let's put dick butts on Bitcoin. We can laugh about that. That's a good joke. Eric, how like sustainable do you think this is? Like, do you think like, yo, we've perhaps fixed the Bitcoin fee structure? Or is this like, eh, this is a more of a philosophical conversation at this point. We'll see how this plays out. Like, kind of where are you on the spectrum of like how serious this is?

No, I mean, it's 100% early days. We don't know. this is going to play out. I think that we've just added a new sort of natural source of demand for Bitcoin's block space. And I think that that's good. But the one thing that still irks me a little bit is that I do think that Andrew Polstra had this mail on the Bitcoin mailing list where he warned about volatility, like transaction fee volatility. We've already seen that scarcity pricing is a real thing. And even without NFTs, fees can go up and down. extremely fast. So I think, you know, what it might actually accelerate is that Bitcoiners are thinking about actually, can we burn some of the transaction fees when the fees are really high,

and then just have like a constant low inflation instead. We're sort of pushing ourselves through reinventing EIP 1559. That might be the outcome. And that would be, I think, a better outcome than having no solution at all to the security budget problem. So more fees are definitely good. if we can harmonize them over time and we know from Ethereum that we can, I think that if we just figure out how to harmonize those fees that we are amassing through NFTs, then it's going to be a net good. So if we keep on leaning into this maximum case scenario as every single block is four megabytes. Eric, you talked about how this actually doesn't present a bloat problem.

Can you walk us through that? Yeah. So this is actually kind of funny. I'll try to explain it in the, it's a pretty complicated topic to understand, but I'll try to be pedagogical or I'll try to explain it in a simple way. So the first time that you hear about NFTs on Bitcoin, you're sort of like, ha ha, NFTs on Bitcoin, that's dumb or that's funny. And then the next thought you have is probably NFTs shouldn't be on Bitcoin. Bitcoin is for transactions, right?

And then the third thought that you have is actually, you know, it's not true that you can't really bloat the Bitcoin chain in any way because there are block size limits. Every block has a limit that we have agreed on that no. matter how this block is filled, we are okay with this limit. That's what the block size limit is for. We set a block size limit so that over time the Bitcoin node wouldn't become unwieldly to sync. So it's not a matter of weighing the Bitcoin blockchain down with all these NFTs. It's just a matter of what type of content are going to be inside of those blocks. So it's a matter of what type of content is inside of Bitcoin, not how much we're weighing it down. Okay, so now you've become a little bit smarter. You're understanding that we're not

breaking the block size limit of Bitcoin or anything. Now, you can have another thought, which is that actually, though, when you're leveraging TapScript in this way that Casey has sort of invented, you, this is pretty difficult to understand, but most Bitcoin blocks are not actually four megabytes. And it's not because there are not enough transactions. It's because only the witness data is allowed to fill out the block. up to four megabytes. There's a base block in Bitcoin that has a one megabyte limit. And then the witness data has in total a four megabyte limit.

So when you're doing Casey's thing inscriptions, then you can really max out these blocks because you're using the tab script witness data. So if people are doing inscriptions, it might become more common that we see four megabyte blocks. So now you're back to the idea that actually we are making the Bitcoin block heavier to download. But, okay, so stay with me. to follow me a little bit more. I'm soon done. So now the next realization that you're going to

have is that, but what is the reason that witness data is cheaper on Bitcoin? There's actually a reason for that. And it's because witness data is something that after you validate it, you can throw away. You can prune it. So it doesn't have to stay on the note forever. Now, there's yet another thing in that context that you also have to think about, which is that there's something called assume valid. David, have you ever heard of assume valid? I mean, I know. I know. know the op code, but like, I don't know what it does. Casey, do you know what Assume valid is? Yep, yep, sure do.

Okay, assume valid was a pretty controversial configuration setting that was incorporated in Bitcoin core, not that many years ago. I think it was maybe like 2018 or something like that. What the assume valid option does, which is now the default in Bitcoin, is that when you're syncing a Bitcoin node for the first time, assume valid assumes that the signatures up until a certain block height are valid. So you download them, but you don't actually validate them. And then only after a specific block, let's say, halfway in, then you start to validate signatures.

This is a way that they sped up. Sounds like checkpointing. It sounds like checkpointing, but it is different because it happens when Bitcoin Core releases new clients, there's a new checkpoint inside that. So it doesn't come like every 20th block, it automatically checkpoints. It comes from the release cycle, which means that the developers are looking at which block are actually getting. assumed valid in the config. But what we've noticed is that they... Manual checkpointing?

So it's manual checkpointing by the developers in the release cycle and then the people let it install. For technical reasons, it's not quite checkpointing. Like I don't think that, for example, Bitcoin Core will neglect another valid chain because it does not have the checkpointed block, for example. Yeah, so it's more of a soft checkpoint. And also, it still checks that all the balances and stuff like that adds up. just skips the signature validation. So assume valid is much safer sort of than a checkpoint.

However, they keep moving this assume valid checkpoint or whatever you want to call it forward. So the last time they did it was only five months ago. So now we come to the sort of the final conclusion here that if more of the Bitcoin data is getting gobbled up by inscriptions, which is witness data, which is more easy to prune and you don't validate it in most situations, you just download it. It's like the blockchain will consist of more blob space than regular space,

which makes the node actually easier to sync because it has a higher concentration of blob space that you can actually prune. So the node that you actually have to store at the end of the day will be smaller in bytes because you can prune the witness data. And it might even be faster to sync because you don't have to do any computation

on all these inscriptions. So when people are saying this is making it more difficult for people in Africa to sync a node, actually it could be completely so that it's the opposite, that it is actually making the node leaner. And at the same time,

it is increasing the security budget, which makes the system more secure. Boom. Wow. Okay. Yeah, that's the final galaxy brain take, you know? Yeah, right. I love that. I want to try and summarize this.

Okay, so we have a way to create block space demand. Additional utility plugs right into Bitcoin, no hard fork needed. It's already up and running. So we have potentially a way to consume block space that generates block space demand,

which pays for miners to pay for security. In addition to that, Eric, what you're saying is that all of this extra data that's going into a Bitcoin block doesn't need to be validated because they're not transferring Bitcoins. They're not transferring Satoshi's around.

We're just adding in, data into the chain. And so because of this mechanism of assume valid, you actually don't have to do the computational processing to make sure that all these Bitcoin transfers are valid or not because they're not Bitcoin transfers. And so the consumption of Bitcoin blocks base to do crazy NFT stuff is actually not a burden on node requirements. And so you're actually, because you don't have to do the computation to validate the NFT, the more NFT data is in the, the block, the less computational overhead there is per block. And so, boom, we've solved, perhaps solved, Bitcoin's block space demand problem, while also making the chain more manageable

by nodes globally across the world. Is that a fair summary? Yes, except for one tiny, tiny little nitpick, which is that the four megabyte blocks, you actually still have to download it. It's less computationally intense to validate because you don't validate most of it. If it's this four megabyte block that we just saw. There's nothing to validate at all except like the proof of work header in the header hash. But you do have to download more data. But after you download it, you can throw it away. So it does increase how much you have to download when you're doing your first full node sync. Bandwidth goes up. Bandwidth requirements goes up. CPU requirements goes down. Exactly. Exactly. But on the whole, I would say because you then prune it, you can throw it away.

if you combine pruning with skipping the computation, and then you add a little bit more data that needs to be downloaded, but it's still within the bounds of the block size limit. I think all in all, it does create a leaner node. Yeah, like people miss the fact that a full node uses many resources when it's downloading and validating the blockchain. They tend to focus on the size of the data being downloaded and bandwidth, you know, the amount of data that you need to download,

and disk space, the amount of data that you need to download, sort of disk. But for example, signature verification is very expensive. And a huge amount of the, you know, capacity constraints of Bitcoin come from needing to keep signature verification fast during initial block download. So you can, you know, verify everything that you need. And for example, that inscriptions don't contribute to that signature verification budget. And then you could imagine, and this is, you know, an upgrade that is not on the table now, nobody's proposing it. But you could imagine an upgrade that would let full nodes just not download witnesses at all at some point in the future. The witnesses are sort of in a,

they are segregated in the block, so they're elsewhere in a separate Merkel tree. And you could have an upgrade which said, okay, you know, any witnesses that are older than a year or older than this many, you know, Bitcoin Core releases, we're just not going to download them. And I wouldn't want to say whether these are full nodes or not, but these represent a reasonable security compromise. I'd say we don't have full notes in Bitcoin anymore ever since we introduced the assume valid flag as a default. That's a philosophical thing that I can vouch for. I mean, yeah, it's a different security trade-off. And some people run without the assumed valid flag. But yeah, this would give us an additional security trade-off, and it would mean that you didn't even have to download this old

witness data. And, you know, the people who cared about the rare pepés, they would be free to continue downloading and storing and archiving all the rare pepés in the witnesses. And it might even be that bandwidth and disk space no longer becomes a concern for most nodes. But the thing that I think that you need to take away from this is that you saw that, you know, me walking through the realizations and the twists and the turns and then the galaxy brain take at the end. What's happening currently in the Bitcoin discussion is that this thing is very new to a lot of people that haven't thought about this issue, perhaps for some time. And they are therefore at different layers, at different stages. And you saw how much disagreement there are like,

in one realization, you're like, oh, actually, this does create more both. And then the next realizations, actually, it doesn't. And so people are going to be in different steps of the latter, and they're going to yell at each other. And I don't know if they're ever going to all of them reach the Galaxy Brain Take, but let's hope that we with this podcast contribute to some of that today. Absolutely. And I know I have been branded to probably my fault as a Bitcoin hater. But as soon as something like this shows up, I get really excited because it starts to check some of the boxes that I want to see in cryptoeconomic systems that I hope stand the test of time. So I definitely agree with that, Eric, that I hope that this podcast can help produce some of these outcomes.

The last topic of conversation, I want to start with this particular inscription, inscription 466. This warms my heart because one of my first introductions into video games was playing Doom while sitting on my dad's lap, pressing the space bar. And this is Doom in Bitcoin. I don't know if that, I don't know how you shoot. You click on the, so the thing is that it's in an eye frame. We sandbox all the eye frames to keep everything on chain. So if you scroll down, there should be a preview or a content link. Both of those should work.

And that will give you like a full screen preview. Oh. No, no. Yeah, either of those. Okay. The inscriptions content model is very compatible with the web. So we're adding as many content types as we can do. Yeah, this is insane.

I was at the SF Bitcoin Devs meetup, like presenting on inscriptions. And I was playing a snake, like a snake game that somebody uploaded while I was answering questions about how the system works, it may have been the coolest moment of my entire life. And how many kilobytes? This is like 300 kilobytes or something like that or even less. Oh, I don't know. Yeah. This could be very small. I mean, you know, a lot of the stuff in here is like generative. It's like algorithmic like shaders and lighting and stuff. And I don't see very many textures. So I don't think this one was non-standard, which would mean that it's below the 400 kilobyte limit. Yeah, yeah. I'm sure that it's smaller than the 400 kilobite limit. But it's just so cool

to remember how, like, when computers were limited, how clever you had to be, and how small actually you can make these games. Yeah, yeah, yeah. So they actually fit inside, like, a single transaction in Bitcoin. It's insane. Yeah, there's a lot of fun stuff for people to explore. Like, obviously, we support like PNGs, JPEGs, all the normal content types, but also HTML and SVG.

And you need to, it's basically just HTML and SVG. We sandbox everything, so you can't make outgoing web requests when that content is loaded on the server, which means that everything you see. see is guaranteed to be on chain. It's just so much fun to play with. And I'm a big fan of early computer art, you know, like the demo scene and those days when you had to really like scrounge for bytes. I can't wait to see how people, you know, like just exploit the browser standards, write crazy HTMLjs and CSS. And we haven't done it yet, but what we're going to do is we're actually going to relax the sandbox that this content runs in so that you can publish resources

in one inscription and then reference them in the HTML or SVG of a future inscription. So you can actually kind of create this on-chain content library that you can remix inscriptions and you can essentially publish entire websites. Now, obviously, the space will be at a premium, but I think it could be a really cool sort of recursive, composable ecosystem of content. Yeah, and so before I got distracted by playing Doom on Bitcoin, this kind of leads into the question I was going to ask is, you know, putting Doom on Bitcoin. First, it was putting dick butts on Bitcoin. Great. The time to dick is all-time lows. TTP, time to penis.

Time to penis, excuse me. And then we put like Luke dash juniors, don't do this request on Bitcoin. I thought that I just say to the haters that if you really don't like inscriptions and you really think that people shouldn't do it, like don't mention it. Don't tweet to your like 200,000 followers that you should not put monkeys on the blockchain. Like, they're just going to to put monkeys on the blockchain. Like, just, shh. So we get past that phase. And then we're at the phase of like, yo, we can put Doom on Bitcoin. And I just got distracted playing Doom on Bitcoin. And then you, Casey just talked about like, hey, there's like, people can do more things. And I think hopefully, you know, once upon a time, Ethereum had ICOs and they were bad and

terrible. And then they matured into Dow's and yield farming. And so like things in the space, like, and all development, it has nothing to do with crypto. All development matures and progresses as we experiment and iterate. And so maybe I can leave this as an open-ended question, a question for the listener to imagine about, but we've unlocked something here on Bitcoin, and we don't know what yet to do with it. But knowing crypto,

people are going to play around and they're going to try stuff, and maybe we unlock some vast green new field over in Bitcoin land that unlock some new use case that both fixes the fee issue on Bitcoin and makes Bitcoin easier, blockchain to run. And hopefully more fun. Bitcoin is starved for fun. 100%. Eric, do you have any comments on that? Yeah, no, I agree. That Bitcoin is finally, once again, fun again. Do you guys remember

that subreddit had a logo with the wizard that said, you know, join us, magic internet money. Yeah, so if you look at that block that took up four megabytes, that was actually the wizard. Oh, really? Actually, it was a bald wizard because the whole story is that people were, like, you know, Udi Verdeheimer has been trolling about taproot not having any user. case except as the butt of his jokes. So people sort of responded by putting Udi's worst Luna takes and FDX takes as inscriptions in the ordinal systems. And then Udi responded by making this 4 megabyte block where he made Taproot Wizards.com. And it tries to reignite the spirit of having fun with Bitcoin again. And actually I just, like one hour before I jumped on this

podcast, I got the second like wizard that was made. So, Now my profile picture. Do you know the inscription number? My inscription number is 1107. 1107. And Udi's is, I think, 652. And if you want to filter inscriptions from your Bitcoin Core node, you can check out inscription 666,

which is a patch that Luke Dash Jr. wrote to filter your inscription. So very handy to be able to reference these things. How do I search by an ordinal number? Casey, is that possible? It's inscription number. Currently, we don't actually surface a URL to do that because they're unstable. We can't stabilize them.

You can actually type ordinals.com slash inscriptions slash the inscription number, and that will give you the inscriptions list starting with that inscription. So it'll be the first one. And there's a nascent market forming for these things. Like the level of degeneracy is extremely high. Like, it's insane.

People are selling like just, yeah. So I don't know how this is going to turn out. Well, I think we can end it there, unless you guys have any other additional things to say, here's Eric's inscription number with, oh, we got some tunks and cubes, we got the rainbow, we got the Bitcoin Wizard. Let me do the mandatory podcast guest shilling. So, like, yeah, like check out the project at ordnals.com. That's the Block Explorer. You can get the wallet at github.com slash Casey slash ORD.

Great opportunity to learn how to run a full node because you need to run it. I have a much less professional podcast called the Hell Money podcast. It's on YouTube, help podcast. Stop Money, me and my friend Aaron, we do it. Hopefully, like, we sort of bring the fun to Bitcoin a little bit. Shout out to Baria Bitcoiners and SF Bitcoin Debs. If you want to come here about me ramble more about inscriptions in person, you should come to the SF Bitcoin Debs or the Baria Bitcoin Meetup.

And that's it for me. I just want to see what happens. I'm really happy to contribute a sort of an interesting medium, an interesting digital art medium for people. to explore and find the boundaries of. And bankless listeners can get all of those resources. I'm sharing them on screen along with Casey's Twitter profile here at Rotemore. O-R-D-A-R-M-O-R.

That's Casey's Twitter handle. And he looks like he's got all of his links over on his Twitter bio as well. And of course, thank you, Eric, once again, for tapping in to be my Bitcoinser technical co-host. Much appreciated all the way through and through. You can follow Eric at ERC-W-L on Twitter. Casey, Eric, thank you both for coming and helping me walk me through NFTs on Bitcoin. Thanks so much for having me. Awesome conversation.

Thank you so much, David. It was fun. Thanks a lot. Cheers. And like always, bankless nation, crypto is risky, Bitcoin is risky, eth is risky. NFTs on Bitcoin, perhaps also risky. Who knows? But maybe we fix the fee subsidy. So maybe less risk? I don't know. We'll find out. This is the journey West. We're on the frontier. I'm glad you are with us on the bankless journey. Thanks a lot.