Unchained - Why All 10,000 OnChainMonkey NFTs Will Move From Ethereum to Bitcoin - Ep. 548

Episode Date: September 26, 2023

Bitcoin Ordinals have exploded in popularity since their launch by developer Casey Rodarmor in January, changing the NFT game with millions of inscriptions to date. But what comes next for Bitcoin-based digital artifacts? Danny Yang and Bill Tai, cofounders of Metagood and creators of NFT collection OnChainMonkey, discuss why they will move OnChainMonkey from Ethereum to Bitcoin, Rodarmor’s proposal to change the Ordinals inscription numbering system, and why they believe more creators should consider moving to Bitcoin. Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform. Show highlights: How the idea for Metagood came up What is give-to-earn and how it is used to reward OnChainMonkey holders The differences between Ethereum versus Bitcoin when it comes to digital assets The creative potential of Bitcoin Ordinals  Why OnChainMonkey will move from Ethereum to Bitcoin Thoughts on Casey Rodarmor’s Bitcoin Ordinals proposal to change the inscription numbering system What are recursive inscriptions How to convince NFT creators to leave other blockchains for Bitcoin Thank you to our sponsors! Crypto.com Arbitrum Foundation LayerZero Toku Guest: Bill Tai, cofounder of Metagood and creator of OnChainMonkey Previous appearances on Unchained: https://unchainedcrypto.com/maitai-globals-bill-tai-on-why-blockchain-is-the-6th-wave-of-technology/  Danny Yang,  cofounder of Metagood and creator of OnChainMonkey Links Unchained:  MaiTai Global’s Bill Tai On Why Blockchain Is The 6th Wave Of Technology  Bitcoin Ordinals Creators Propose Changing Inscriptions Numbering  What Are BRC-20 Tokens? A Brief Introduction Was Bitcoin Creator Satoshi Pro-NFTs? Bitcoin Ordinals Inscriptions Surge Past 2.7 Million  How to Create a Bitcoin Ordinal  Elsewhere:  Bitcoin Ordinals Trading Is Down Bad—But Just How Bad? A New Frontier for Bitcoin? Recursive Inscriptions Explained ‘NFTs will win on Bitcoin’ — OnChainMonkey NFT collection ditches Ethereum Learn more about your ad choices. Visit megaphone.fm/adchoices

One of the things people are worried about with images being put on Bitcoin, how it can really slow down or prevent other people for sending monetary transactions on Bitcoin. But we're showing that with efficient coding, you can actually have the best of both worlds. Hi, everyone. Welcome to Unchained, your no-hype resource for all things crypto. I'm your host, Laura Shin, author of The Cryptopians. I started covering crypto eight years ago, and as the senior editor at Forbes was the first Main Tree Meader porter to cover cryptocurrency full-time. This is the September 26th, 2023 episode of Unchained.

Toku makes implementing global token compensation and incentive awards simple. With Toku, you get unmatched legal and tax tech support to grant and administer your global team's tokens. Make it simple today with Toku. The game has changed. The Google Cloud Oracle built for the first. for Layer Zero is now securing every Layer Zero message by default. Their custom end-to-end solution sets itself up to bring its world-class security to Web3

and establish itself as the HTTPS within Layer Zero messaging. Visit Layer Zero.network to learn more. Arbitrum's leading Layer 2 scaling solutions can provide you with Lightning Fast transactions at a fraction of the cost, all while ensuring security rooted on Ethereum. Arbitrim's newest edition, Orbit, Enables you to build your own tailor-made Layer 3. Visit arbitram.io today. Buy, trade, and spend crypto on the Crypto.com app. New users can enjoy zero credit card fees on crypto purchases in the first seven days.

Download the crypto.com app and get $25 with the code Laura. Link in the description. Today's guests are Danny Yang and Bill Tai, co-founders of Medigood and creators of OnChain Monkey. Welcome, Danny and Bill. Hey, Laura. Great to be here. Thank you, Laura. Honor to be here again. Bill, you were my third guest, if I remember correctly.

Yeah. Pleasure to have it back. The start of the industry kind of at the NECR blockchain summit. I know. I can't believe that was over seven years ago now. But anyway, so part of the reason that I brought you to here was to discuss some recent issues. You could call them in the Bitcoin Ordinals world. And it affects you.

as creators. But first, why don't we give everybody the backdrop of what you've been doing? And we'll start with your backgrounds pre-meda-good. So Danny, would you like to start? Yeah, I'm Danny Yang. Pre-medic good, I started to stand for a Bitcoin meet up back in 2013. That's when I met Bill actually. So that's how we connected. True OG. Yeah, yeah. Early days of Bitcoin when we were all very, I guess, excited by what we could do and the sky is the limit. And, you know, Bitcoin was kind of the center of attention for everything. It was really the only thing. And I started a cryptocurrency exchange in Taiwan called Mycoin that's, that's doing well today too. And then a couple years later,

I started a blockchain analytics company called Bloxier. That was then sold a few years after that. And Bill also was the first investor, both of my, those two, you know, Bitcoin and crypto companies. So I've been busy in this space and just excited to see what's happening today, too, what we're going to talk about because of the new happenings for Bitcoin in particular. And Bill? Yeah, and Laura, I think obviously you've known me for quite a while, but I somehow was able to see some kind of interesting future for Bitcoin back in 2010. That led me to doing some work on a bunch of different things.

Some of the more notable companies that came out of the industry at that time were Bitfury, of course, where I put together the funding for their first major ASIC chip. I'm still chairman of the board of HUD-8 mining, which we spun out of BitFury. It used to be our Canadian operation and had funded a bunch of interesting projects like AirSwap with Joe Lubin and Mike Nova Gratz and Power Ledger and some other things. But Danny, having been the founder of the Stanford Bitcoin Meetup Group, and Laura, you will remember, even back on Necker Island, what I wanted to do was create something like the Homebrew Computer Club for this segment. And Danny had already done that. So, you know, as I was attending the Stanford Bitcoin Meetup Group's young startups like Zappo or BitGo or Coinbase or whoever would come and present at his meetup. And I just identified, you know, Danny as a node with a lot of talent given his PhD in computer science at Stanford. And every question that I had that was technical, he could answer.

And so one day I walked up to him and I said, hey, if you ever start a company, I'm writing a check. And that became the first company he mentioned. And I funded it along with some real OGs like Charlie Lee, Bobby Lee, Jed McCaleb, people like that. And then that turned into, you know, another funding for Bloxier. Both of those companies have been successful. And third time around, you know, I was like, Danny, let's do this one together. So I wrote a check and we put together Medogood. Yeah.

And I just want to urge listeners, if you have not heard the third episode of Unchained with Bill, you definitely should go back and listen to it. Bill, am I remembering correctly? I think your days in the tech industry started in like in the 1980s, maybe. Yes, I'm very old. Yes. Well, you and I are not that far apart in age. So I wouldn't say you're old. However, I remember that just listening to it, I felt like I was getting a masterclass in how internet technology had developed through the decades. So for listeners who are sort of interested in how technology developed pre-crypto and how we got to this point where blockchains were even possible, I suggest that episode. I still remember. being like, whoa, I feel like I'm learning so much, and I just loved it. So as you mentioned, you guys had each other, you invest in any of these companies. So what was the idea behind MediGood and how did you come up with it?

It's around how, you know, NFTs and tokens are actually a very powerful tool, in particular for aligning communities around, you know, a common goal, you know, common cause. So that was the idea for MediGid, actually. Yeah, so let me amplify that a bit. So, you know, obviously given that crypto and Bitcoin in particular, you know, when it started, we're sort of, it is. It's a decentralized thing that allows economic alignment of interest across communities of interest. And of course, the beginnings were all about technology. Then it moved into kind of this like financial sort of phase, which, you know, frankly, I'm not that interested at all the speculative crap.

That just wasn't for me. I was always more interested in the technology and applications for social good. And one of the things that we thought we could do with Meta Good was a lying interest around just getting people to collaborate on missions that made sense and were important for the world. And, Laura, you might remember our little Hanuk kitty that Richard Branson helped us launch. So we did a little experiment many years ago to create the very first NFT. I don't even know if they were called NFTs, but it was a digital asset that when I had put up some of the early money for Dapper Labs, CryptoKitties. If you go all the way back to CryptoKitties, I was funding CryptoKitties. And I told Roam at the time, I said, hey, Roam, you know, it's very fun to spend digital cats around in exchange.

But I want this to have some purpose. So I will write a check if you will do a favor for me, which is create me a special edition Crypto Kitty that I can auction off at an ocean conservation gala that I'm doing in about three months. So that gave birth to something called Hanukkitty, which was a Crypto Kitty with a shell. And we sold that, gave the money to Captain Paul Watson and got him to park his ship in front of the turtle nesting area off the island of Antigua and protect the turtles by having people walk the beaches. So it was kind of the first, first ocean conservation NFT sold for a substantial amount.

And it was also one of the first things that really tied the use case of aligning communities to doing something in the real world that had purpose. So that was the story about why we wanted to try to do something with a broader set of people, make it lower friction, more replicable and scalable. And we have done that. So I'll let Danny take it from there following your next set of questions. Well, you know, one comment that I wanted to make about that kitty was just that I remember like generally, like, because you, you know, you have your handle on Twitter, kite VC, and, you know, you're really into kite surfing and just general like water things. And I remember thinking, oh, you know, this is really interesting because this is a way of just

saying, hey, I have this interest in the real world, and I feel like I can use this technology in a way to kind of spread awareness and generate interest and actually raise the funds to further my own mission with that. So I just feel like there are a lot of things there around how blockchain communities generally think about, you know, they tend to have like specific goals or, you know, values or whatever. And this is, I think, one of the early instances of somebody doing something like that. So back to Medigood, Danny, you know, did you want to add more on the story of how it came together and what the mission is? Yeah, so we're building, you know, the platforms for actually, you know, doing this with entities and ended up launching our own community first on Chain Monkey.

And that's what we've been, you know, focused on the last two years. And, yeah, so. On Chain Monkey. Yeah. I'll just highlight one of the things that, you know, Danny's been able to accomplish by. launching, and he should talk about the technology and the firsts that the company achieved by putting things on chain in the beginning, instead of just, you know, like JPEGs that were digitized and stuck on a server somewhere. He's done some incredibly interesting work putting things on chain generated from the blocks. And he can go to more detail on that.

But one of the results of the community action, as these items have traded, exchange hands, whatever, a portion of that went into a pool. And so now there's a Dow. So, you know, obviously you've done a lot of work on Dow's lower, and I think DAOs are basically a community currency, you know, our community, a community's way to accrue an exchange value. And we had managed to generate an incredibly, you know, for a small, tiny, capitalized startup, we generated a lot of capital in a Dow that has gone on to do real world things, including, for example, the evacuation of Afghan girl, Sharbat Gula, when the U.S. pulled out, somebody had to pay for that paramilitary operation to get her family out of Afghanistan, Italy, and that was funded by her doubt.

And now the community- And I'm sorry, Afghan girl, who is that? That's, so there's a very famous National Geographic cover shot of a beautiful young lady with the staring green eyes. that became a Western icon. And when the U.S. pulled out of Afghanistan, her and her entire family were at risk. So there was a woman, there is a woman named Sophia Swire, who quarterbacked an effort with the consulate of Italy to find a path for her to be evacuated, but it needed funding. And our community got behind it and fueled that whole operation.

This is one example of many things that the Dow went on to fund. We've managed to rehabilitate skate parks in Brazil and just lots of other things that give communities, places and spaces for their members to actually live in the real world where those skate parks, for example, were destroyed by floods. So we restored spaces for them. And now the Dow, it's quite well established and it has a lot more purpose than. aligns with the company itself where the Dow funds are actually fueling the development of the protocols that are aligning ordinals with, you know, the innovations that Danny's created. Danny's work, by the way, if you look at the ordinals GitHub or GitHub, the top several items are all contributions from him. So he's pushing forward many of the things that make

ordinals productive and useful in the real world. And I, I, I, I hit too many points there, so I should stop and let you dissect those. Yeah, well, so let's, we'll go back to just talk a little bit about on-chain monkey. For those who haven't seen, they're very kind of simplified monkey images, I guess, like half of the torso and then up. And, you know, it's just like a circle and then two little arcs for ears. Generative AI art before. AI suddenly became this giant buzzword two years ago. We did this.

We did this before that wave. So the thing about, or actually on-chain R2, so it's called new on-chain monkey, you know, for a reason. And I think the new term that we're being using is called digital artifact, which is actually let me define what that is because that's kind of what we, you know, we were trying to achieve then. We didn't have a name for it. That's what we achieved back then on Ethereum.

But now we have a new protocol on Bitcoin 4. digital artifacts. And that's, you can say it's a subclass of NFTs. So the digital artifact is something, well, first that's ownable. That's kind of a given for NFTs and tokens that were talking about. Although digital ownership is something that's interesting to talk about too. We can talk about that later. But, but then there are a few other properties, basically five properties in total that this is also what Casey Rotamer defined clearly when he defined the Ornose protocol as a protocol for a digital artifact. So ownable, complete, uncensurable, immutable, and permissionless. So I'll quickly go over what each one of those means.

So complete means that the asset itself is completely on-chain or represented on-chain. So that's actually a big difference from the NFT protocol where generally familiar, which is the one on Ethereum and EVMs, which is the ERC-721 protocol for NFTs. So that's one tied to digital certificates, basically. NFT is something that has a unique identifier, a certificate or an ID. and that ID can be basically a link, like an IPFS link, or it could be just a standard ATP, or like a dot-com URL link, right? That's the protocol that developed, you know, after, you know,

after like crypto products and crypto communities, then, you know, the Ethereum community formed this basically a very broad and simple NFT protocol right around here. You know what on digital certificates because you're trading unique identifiers on Ethereum blockchain. And that went on for many years. years. The on-chain NFT community kind of formed a little later, and on-chain monkey was one of them, too, which we wanted more than just a certificate or pointer. We want the actual digital

asset to be represented completely on-chain. So that's completeness. The second is uncensurable. I mean, that's kind of a given property of Bitcoin and many of these open permissionalists. So unconsorable, immutable, and personalists. Those are other three properties that you have with this basically with this particular protocol of, you know, Orrinos. Those also may or may not be true for all NFTs

or for, let's say, ERC 721 NFTs. So like these are the kind of five kind of significant properties of a digital artifact that, you know, we were, we achieved back on Ethereum, but now that we have a new protocol,

we're doing it on Ornodeo's because it's created around these, these properties. And just to touch on the image, as you described it, Laura, so rather than a drawing, per se, that is stuck on a server that a pointer goes to with like most NFTs, Danny basically wrote a math expression with a data table where algorithmically every one of those things is generated on the fly. So it's actually, you know, it's truly, truly on chain. So to all the elements that he described, those five properties, it's coming off that block. So it's a, it's a, you know, much more true to the spirit of these centralized assets. Exactly.

That's a part of the generative art side of thing. In particular, when I launched on chain monkey in 2021, it was, so Ethereum and blockchains and Bitcoin, they're like, they're a public good. And also anything that you write onto the chain costs quite a lot of money, right? Or rather you use it up and someone else cannot use it. So you had to pay for that usage. And to actually put 10,000 images onto the blockchain is very expensive. So you can actually write code that generates the images, which is much more compact. And then actually part of the art of the original art of Onchain Monkey back in 2021 on Ethereum was that this whole collection of 10,000 had to be an interesting collection of 10,000 images.

So it's not just kind of random monkey images, but there's kind of interesting distribution across the whole collection. and done in a very compact representation on Ethereum. And in this case, it was done in one transaction, which is kind of also showing kind of the kind of, the whole thing was birthed in one kind of atomic transaction, one transaction. And that was a challenge because within one transaction, there's a certain limit to how much you can do in a given Ethereum transaction.

So that was kind of the uniqueness first of just doing a whole collection that's on chain with these properties of digital artifacts in one transaction. And that was also what we achieved when we did it on Bitcoin early this year. So we actually created the whole 10K collection of Anche Muckie on Bitcoin. So all these 10,000 images and metadata describing them in a single inscription that only also took up very few bytes of Bitcoin's block space. So it used less than 20 kilobytes of Bitcoin block space for 10,000 images. So that, you know, on average, is less than two bytes per image, which is, you know, super efficient on Bitcoin.

So it didn't affect the network, the Bitcoin network. That's one of the kind of the things people are worried about with, you know, images being put on Bitcoin, how it can really, you know, slow down or prevent other people for sending monetary transactions on Bitcoin. But we're showing that with efficient coding, you can actually have, you know, the best of both worlds. Yeah. And I just want to point out for listeners who aren't aware.

I'm going to describe this the way that I know it works on Ethereum, and then you know you could translate for Bitcoin. But, you know, on Ethereum, I'm sure you're aware you have to pay gas. And so it's somewhat similar to driving a car where certain transactions take less gas, meaning, you know, it's like a simple transaction would be similar to, you know, if I here in New York City want to go across to Jersey City or something, that's like a short distance. Whereas it would cause more gas if I want to go to Philadelphia, even more gas if I want to go to DC. And so like creating an NFT takes a lot of gas because you're making a unique object. And so the fact that you were able to do 10,000 of them in a single transaction, I think, is, you know, what you were talking about there about,

how that was, you know, remarkably efficient. And then one other thing that I wanted to mention about on-chain monkey was you also introduced this concept of give to earn that I think aligns pretty well with the mission of the collection. So can you just talk about that concept? Yeah. So we have a community currency called the banana that the only way to receive it or you can say to mine it is you give it to someone else and then you get one yourself and you can do that a couple of times a day. And that's been going on for nearly two years now. and I think probably about just over a million bananas have been mined in this way. And basically our community has been doing this.

And it promotes its earn. We also define a set of values from our community from, you know, beginning when we launched it, rise that our community, you know, kind of shares, you know, on a daily basis too. We stand for respect, integrity, sustainability, and enrichment. So, and both the give to earn and the rise values are, you know, kind of the core part of our community on change. monkey. And Laura, what we wanted to model were, you know, kind of very, very, very basic economic

principles. So if you think about, you know, a group of people as they exchange items, you grow the economy. So we wanted to steer our economy in a way that was for public benefit in a way. So, you know, as people do good things for each other and give, you know, things to each other, they also earn. So it's sort of, you know, decreative little bits of karma that spawns on other bits of karma as currency that become giant, giant, you know, economic value. That's what we are driving. Yeah, it's so funny right when you started that description, I was like, oh, like karma. Anyway, okay, so we've sort of hinted at this, but, you know, obviously, as you mentioned,

you guys started on Ethereum and then you, you know, began also putting, you know, parts of your works on Bitcoin in particular collection called On Chain Monkey Dimensions 300. Talk about why it is that you started on Ethereum and why you eventually decided to, you know, launch something on Bitcoin. And we'll get later to your even bigger news about eventually moving everything over there. But let's just start with that first step. Yeah. So it's because Oral's protocol, you know, happened also at the right time where the markets understand

NFT is a little better. And we've seen an FIT ecosystem develop on, you know, Ethereum, Salon, and other chains. Yet Bitcoin didn't really have much of a, you know, NFT market. And then this protocol, Ornance protocol, basically happened along. And it's actually a very simple and elegant protocol that takes advantage of many properties of Bitcoin, particularly the UTXO model of Bitcoin. That's the core of the Ornance protocol. all.

So. Unspent transaction output, which is like the change from every transaction. Yeah, which is very different from, you know, Ethereum and account, like the account-based model of Ethereum. Accounting model is more, I guess, intuitive for people generally. It's like your bank account. Well, Bitcoin's ledger is tied around this UTXO model. And this ledger, so Bitcoin has this very simple scripting language, simple by design,

just, you know, Bitcoin has these great properties. But because it doesn't have the smart country that Ethereum and EVMs have, right, it's been difficult to create a kind of a native Bitcoin, non-flingible asset on Bitcoin. And that's what Casey was able to do with the Ornows Protocol. So it's actually quite Bitcoin native using the same ledger accounting model of Bitcoin, which is the UTXO model. So this is really powerful thing. So that anyone define any basic digital.

asset on Bitcoin. So that that digital asset or that digital artifact, you know, has with property, as I mentioned before, which is, you know, those five products that people can basically own and trade them. So, so that happened, you know, basically end of last year early this year. But it was still in the very, even today, still in the very early days of that particular implementation of the protocol and even the definition of program. And that's why we have, we'll talk about this inscription number debate. that that's been going on the last week or so. It's mainly around basically how early it is.

But we recognize that this was something pretty significant for Bitcoin. It is basically, you know, kind of the, I'd say, you know, the winning, you know, NFT protocol or standard on Bitcoin. So that, you know, and it'll be quite important, you know, leading to and post the next halving, you know, for Bitcoin. And we're already seeing that with, you know, the most. majority of Bitcoin transactions, you know, this year has been Bitcoin ornals related. And a lot of the mining fees that are going to the miners who secure the Bitcoin network are coming from, you know, Bitcoin ornode transactions. So it's already having an impact while it's still quite an early market where actually

many people don't quite understand the protocol yet and haven't really dug into, you seeing kind of the significance and what you could do, you know, with it. And so I think we're talking about OCEM dimensions. That was one thing that we launched, that we wanted to show what you could do with this protocol because it's more than, I think people in general think of entities as basically a digital certificate. So you just need to define some unique identifier,

and that's your NFT. While with the Ornose protocol, it's actually because it's not tied around the Tidea of a certificate, it's actually tied around the complete asset itself. Then it's, you know, what is that asset? What could you do with it? And initially, what people did with it was just, well, we can basically make images onto Bitcoin. And that is actually, as we talked about earlier, can be very expensive when you want to, you know, images are, you know, basically, you know, larger file size type of data assets.

And if you want to just do that on Bitcoin, it's going to be expensive and inefficient. So with the OCEM dimensions, we are showing, well, wait a second, we can actually write code that generates images or other things, even beyond images. And so it's actually, you know, it's an artifact that's based off a code that generates, you know, actually 3D renderings of, in this case, it's a, it's usually as a statue of OCEM Genesis monkeys. So it's actually, you know, 3D rendering of an animated and, you know, it's, it's a statue of Ocim, the genesis monkeys. and it's actually pretty cool and high resolution because it actually scales. We're actually rendering them from the data on Bitcoin into any browser.

So it scales to the size of the display a bunch of cool properties of what you could do with this protocol. And so that was the art of this particular collection. And a couple of questions. So for ordnals, I believe that they're still, I don't know if they don't if they have quite the same level of expressability as Ethereum NFTs. Correct me if I'm wrong.

The way that Ethereum NFTs can be, you know, for instance, like a domain name or tickets or, you know, other things besides. Yeah, like. You mean the use cases of NFTs or because actually the expressibility of Ethereum entities is really, it's a unique identifier. And then you identify and they can point to whatever you want. Right. For what the design for Ornos is around, as I said, the digital artifact. So what you want to create is actually what you can basically what you can describe, you know, in a, you know, some bits and bytes on Bitcoin. Would that include something like a like a blockchain domain name?

So you, so because it's actually tied around basically, you know, just, you know, data. you could, so actually this is a kind of powerful thing where people are, because it's just data on Bitcoin that has these properties, you can make that data mean whatever you want. So you could even just say, well, this data is the same as the Ethereum identifier for NFTs. So it could, it could potentially represent all those things. But what people are doing with it is actually they're to find their own new protocols on top of the Orlos protocol. We're saying, well, you know, this, this is how, like this data that I'm writing has these meanings. and I'll use it to do something else. So that's actually the really cool.

One of the really cool things about Orrinosis is that it's launching additional, people are launching additional protocols on Bitcoin using, you know, this new protocol because it's basically the, it's basically the, or as a data layer, right? It's a data layer or anything else that you want to develop. I'll throw one word out there for Danny, which is a foundational data layer. So if you think about Bitcoin in the quote old days when we did that first podcast, seven years ago. You know, it was kind of a store of value. And then during the speculative phases, it became a risk asset. But there was a big gap in between where there was not any

real perceived utility for it other than storing or speculating. And that giant gap was filled by Ethereum and the many other chains that emerged, you know, all of those. You know, there's many of them. But what Ordinals does is it creates this foundational layer that allows the data to represent whatever you want it to represent. And it introduces the capability for developers to fill that gap with the Bitcoin blockchain, which is, as everybody knows, the most robust old guard chain out there. So it's kind of just finally filling that gap that allows a whole ecosystem and sets of economies to be built on the original chain.

Yeah. I guess just from what you're describing, it almost sounds like what you're saying is that it allows for more Ethereum-like capabilities that then, you know, the way Ethereum has like multiple D-Fi protocols built on it, it would allow to, okay, okay. So, all right, that, well, super fascinating. So we're going to discuss more about that, more about Bitcoin Ordinals generally and also why you guys decided to move your entire collection over from Ethereum to Bitcoin. But first, a quick word for the sponsors to make this show possible. Toku makes managing global token compensation and incentive awards simple.

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The game has changed. The Google Cloud Oracle built for Layer Zero is now securing every Layer Zero message by default. Their custom end-to-end solution sets itself up to bring its world-class security to Web3 and establish itself as the HTTPS within Layer Zero messaging. messaging. Visit layer0.network to learn more. Join over 80 million people using crypto.com, one of the easiest places to buy, trade, and spend over 250 cryptocurrencies. With the crypto.com visa card, you can spend your crypto anywhere and get rewarded at every step. Up to 5% cashback instantly, plus 100% rebates

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Propel your project and community forward by visiting Arbitrum.io today. Back to my conversation with Danny and Bill. So as we mentioned, you're now going to be shifting your entire metagood NFT collection from Ethereum to Bitcoin. Why did you decide to make that shift? Why not just keep

the original where it was, have your dimensions over on Orinels? Why cause such a disruption? Yeah, we see it as kind of the natural shift. You know, Ornos Brokaw is something that's quite significant

for Bitcoin and for crypto overall. So it makes sense for us to make this move. and also kind of to lead the way and show that, you know, this is something that is worth, you know, other communities and then people, you know, using. So, so we're bringing our communities to, you know, Bitcoin Oranos. And we also inscribe, so OCEM dimensions was that, that high definition is 3D art. But OCEM Genesis is our original, the SVG, you know, 2D, you know, images that we launched, you know, two years ago. on Ethereum. And also on Bitcoin, we were, as I mentioned, you know, we were first to also show you

could do that in a very efficient way on Bitcoin. And we inscribed, you know, 10K of these monkey images back in early February. So now we've been waiting to basically distribute them also in this new way called, you know, parent child collection problems so that, you know, everyone who owns the Ethereum one can basically upgrade to the Bitcoin or an old. And that's happening around the next few weeks that we should start down migration. So that is, yeah, our big group. But what was like the reason why you thought, you know, instead of just we'll have one on Ethereum, one on Bitcoin, like why move everything over to Bitcoin? Yeah.

For what we're doing, it's around basically the protocol is a better fit. So protocol around digital artifacts is a better fit than one around digital certificates because we were. So Ornode didn't exist when we launched in 2021. So if it had existed, we would have launched directly on Bitcoin. This is the protocol for digital artifacts. Also, that's why we're moving now because now this exists and it makes sense for Onche Monkey, you know, art collection. Okay. Now let's just talk a little bit about what's going on in Ordnals these days because creator Casey Rotemore made a proposal last week that was somewhat surprising.

And, you know, as you describe, there's, you know, this way of numbering each of the ordnals or because of, yeah, the numbering of the Satoshi's in the whole Bitcoin blockchain. But he proposed deprioritizing that system. So why did he do this? Like, what problem is he trying to solve? Yeah, so let's go back to the Ornose Protocol. So I describe it and basically there's three parts of the Ornose Protocol. all. Part one is the Satoshi's or Orno Theory itself, which is how you identify Bitcoin or the Satoshi is the smallest unit of a Bitcoin. So Orno Theory is identifying or numbering them in order.

And there's actually no dispute about this. That's very clear. In fact, this is this original idea was first publicly proposed by Charlie Lee back more than 10 years ago in Bitcoin talk, like how you could basically number UTX. and Satoshi's within the Bitcoin graph so that you could do some things with it by this first in first out method, basically, or no theory. So that's kind of long established and independently people had these ideas. The second part is around the inscription. So that is new.

That is basically the ability to write data onto Bitcoin. That part, how you define the inscription to be included or the data that someone writes to be valid or included in this protocol. That has been evolving over the last year. So that's where actually this debate, actually, that's the source of this debate. The third part is how do you map the inscription to the Satoshi or the Orno? So that actually is very important because that's the assignment of ownership of the inscription. So these are basically the three parts that define orno protocol. Basically, part one is just what the heck is an Orno? Part two. Part two. Two is what the heck is an inscription.

And part three is how do you assign the ownership of inscriptions to Ornos? Because Ornodeos are a thing that you can own because Ornos are Bitcoin, right? So Bitcoin is a ledger of a Bitcoin. Okay. So it's the second point that has been causing, I guess, the most debate because the definition of a description is still getting finalized. And it should be final kind of by the 1.0 release. We're at the 0.9 release of the Ornose protocol implementation.

So I think during this last year, we're kind of figuring out, and in fact, now we're quite close to kind of pretty much the definition of an inscription that everyone can be happy going forward. So the issue is because it has the definition of the inscription has changed slightly over the last year, then you have some inscriptions that were not recognized or recognized at different points in time. And so people had already numbered them. So this is then based on the off-chain indexing of all inscriptions. So we mentioned earlier, inscriptions are kind of immutable, right? And that's still true. The inscription itself is the data that you write on Bitcoin is immutable. And the sequence of them is also locked in by the Bitcoin ledger or Bitcoin blockchain itself tells you,

you can look up the inscription and see how they're ordered. The issue is that when they came out, you know, whenever they did, at the time of when they were recognized by the protocol, the display or the indexers that showed the inscription to people on the website, ornose.com in particular is the main one that people go to. There was basically a numbering of them that was layered on top of the on-chain data, and that number is the inscription number that is basically that people are debating, because the number, basically they numbered them sequentially.

by the indexer. And so someone, let's say, bought the number 1,000, right, and inscription number 1,000. And the value and attachment to that inscription was actually more the number than the actual data of the inscription. And so people were trading and assigning value to that inscription

which because of the number, right? And later on, when the description, what the definition of inscription was a little broader, there might have been a couple other inscriptions that actually on-chain were earlier than that 1,000, inscription number 1,000. So if you count them through, then

an inscription 1,000 becomes, let's say, 1,010, right? And that number has changed. Because a lot of value is tied in the number for the early ones. You know, obviously the people own them are, you know, upset or worried that that affects

the value of their order in inscription. And so that's what we're kind of debating. In the long term, it's actually not a big deal, but in the short term, it's actually, it's nice to see the community, the whole Orno community now. You know, in this debate of what's the description and how do we move forward and how do we solve, you know, the issues. Both sides have legitimate points on this. On the Ornows team side, the reason that Nort Casey is proposing, Basically, you could say this renumbering, or rather the de-emphasis on the description number is that this is a more general and scalable way for the future.

Because you don't rely on this indexing, this particular indexing. You rely on actually what's the ordering on chain because you can always look at, you can always look on the Bitcoin chain to see what the actual ordering is. But I think that there will be a basically kind of a solution that is preserved. both because there is the numbers were part of the ornose growth in history like the the reason inscriptions took off in the early days was actually around this number because people actually like the numbers so that helped grow in the early days you know or not's protocol you know one possible solution for this is really the ornors protocol develops in the most general and you know scalable and best you know best way while you can actually use the protocol itself to record

the early inscription numbers up to some at some point right and so you you have to have both. But right now, you know, it's still, it just came up last week. So, you know, people are kind of learning about the issues and, and kind of weighing in on both sides and possible solutions. I can't predict what's going to happen, obviously, but, you know, humans get excited about funny things sometimes. And to me, individually, it's not that different than phone numbers. You know, like everybody has a phone, not everybody, but most people have a phone number. Different people are attached to those numbers. Some are perceived as more interesting or valuable or not.

But some of those numbers are more sought after just because they're interesting numbers. So where does this all go? I have no idea. I think in the end, the asset value will overcome the number, but we'll have to see. Yeah. And is there any particular method by which the community will come to resolve this? because obviously, you know, Bitcoin, it doesn't quite have the same tools around like Dow's and stuff the way that we see in Ethereum.

So is it just since Casey said so, then, you know, as long as the community discussion seems to be supportive, it'll go through? Or like, how does this even get decided? That's a great point. It's basically how does a protocol that you get, you know, get further along and how do you do improvement proposals, right? Like BIPs for Bitcoin. And that is, that is something that also, I think it is a good time right now to kind of

work out more clearly, you know, overall for this. One of the things that was suggested a while back was having something like Bix, but for Orono, so, I mean, OIP, they caught it OIPS. So I think we'll probably have something like that where, you know, people can propose things and then it gets, you know, discussed and discussed. and then, you know, someone will implement it and it might go into the protocol. Okay.

And just you might have said this, but for the record, you are supportive of how to resolve this issue. I think it's, so there, so right now the discussions are happening in the Ornose GitHub. So actually, if we can share the link later, but in, you know, or not, basically GitHub slash ornose slash ORD,

there's a discussions tab. And actually the most active one right now is around this, the inscription numbering. And so I propose something in there, which is basically something that can let the ORD team develop, you know, as they want to, which is to simplify the implementation of the protocol. While we also inscribe or basically use the protocol itself to record all the inscription numbers up until now, so that people can basically in a permanent and immutable way, always have that inscription number that they were, that they received when it happened. That's kind of the history of this.

So you have to use the tool of R&O to record the history of what happened up until the protocol updated, upgraded, to the 1.0 release in particular. Okay. So one other thing that I saw on a technical list, level that you had been discussing, Danny, was how you generally feel that standards are needed in ordinals. So talk a little bit about what problem you're seeing there and how you think that should be resolved. Yeah. So I think this is back to also the earlier point of me, how do, how does ordinals kind of improve, right? Our ordinals is still not at the one point of release. So

there are, basically, there are a few powerful features that have not come out yet. Yeah, one of the actually around recursive endpoints and reinscription. So those, because they, some of these haven't come out yet. And also people are writing new, you know, meta protocols on top of Orenot. So there's actually a, it's kind of like a Cambrian explosion of thing, which is actually great. But to get more adoption generally, you know, people do need to and say, well, these are, these are like certain ways that you can can do things so that it's, it's easier for people to interoperate.

And so one is around just, you know, how do you define basically NFT collections? Like ERC 721 also had a metadata standard that was widely adopted. So people can basically create the, you know, this NFD collections and browsers or no, sorry, NFT marketplaces could all use them and it could be very easy across. all the different, you know, third-party software. For Ornos, it's still quite early, so we're still figuring that out. In fact, the collection problem is, or even just defining the Orono collection, that was, I think, one of my main point early on is, you know, we, up till now,

the standard way to create a basic Orono collection wasn't standard. So that was kind of the main point first. is just, well, people want to create collections of Orinos, but there was no standard way to do it. So people kind of just did it their own way. It's like freeing crypto kitties on Ethereum. Yeah. So with a recent release, that standard is almost there, which is what I mentioned here, this parent-child collection problem is standard. Or I think someone is using the term genetic parents now, which is kind of cool because, you know, Bitcoin, this UTXO model is a directed graph.

So you can actually basically create collections based on like a family tree type of, you know, structure, which is unique basically to Bitcoin for our collections. So that should produce some level of scalability and, you know, more usability, a lot more activity on the chain. And obviously what's good for ordinals if that happens is good for Bitcoin, if that happens. And obviously if it's good for Bitcoin, it's good for the whole ecosystem because all of the assets kind of flow together. So everybody that's listening to this should want the standards to come, the scalability to be there, and the Cambrian explosion that Danny talked about to just accelerate to make the whole ecosystem a little happier. Yeah, in particular, the having is coming up in spring next year.

And that's going to be a big, it's kind of built-in growth mechanism. in the Bitcoin protocol, right, because it forces the issue of we need growth in Bitcoin or else the miners who secure Bitcoin will suffer, right? So, and that's, we've had that the last three cycles because of this, this forcing issue. And now, you know, we have this basically this deadline, right? The having it's coming. You need growth on Bitcoin. And one of the great opportunities for growth is Bitcoin or not.

So that's also why, you know, we're moving everything over to Bitcoin because we see this as a, you know, great, great time in the market to be building. on Bitcoin using this new protocol. That's actually very powerful. And it also helps answer a little bit of the question, if it all works, what happens when there are no more block rewards? You know, because this has been a question overhanging the Bitcoin ecosystem for a while. Like, you know, why do you put up a mining operation when you know that eventually there's nothing to come out if you do the work? Right. So presuming that there is utility. Well, from the block. Yes. Yes. So I think.

Like you would still hopefully generate, There we go. And what causes this? I think the percentage of transaction fees driven by ordinals now is what, Danny? It's about half. Yeah. So already in a year and a half, it's half. How of the transactions are all the other stuff over 13 years?

Which is great and good for Bitcoin because I think, yeah, before then, security was a big question mark for Bitcoin. So one other technical kind of innovation that looks super interesting is, again, something that I saw you had written about, Danny, called recursive ordinals. So describe what those are and give some examples of what they are or how they work. Yeah. So recursion in terms of programming or math is when you have a self-referential function. In the Ornose case, you know, Casey defined them as recursive inscriptions. So basically, inscriptions that call other inscriptions, not quite your own description, although you can, I suppose.

But yeah, so the idea is that it's actually the idea around this is like it's composability or modularity of code in particular. So if you're a programmer and you're writing programs, you often want to call other functions or other programs that other people have written. And that's actually kind of power of this. this idea of recursive inscriptions that if you create an inscription, you can actually reference other inscriptions in your inscription. So that's recursion. That's what recursion refers to in the Ornos sense. And that's very powerful when the inscriptions in particular can be code because then

you can actually write code that calls other code. And you can use anyone's code because, you know, Bitcoin and Ornos is a public ledger. So any inscription in the past that's done something, you a future person can use that in their inscription. And one example would be when we inscribe OCRM dimensions, we said this was 3D generative art on Bitcoin. But we also inscribe several code libraries, 3.js and p5.js. And also some compression libraries. Those libraries can be used by other people in the future.

And that's what's happening. Other people are actually using the 3.js and the p5.js, in particular for doing gender of art, because those are very popular libraries, you know, for, you know, digital and generative art. And they don't have to basically, you know, re-inscribe those, or they don't have to inscribe those themselves, right? Because block space is expensive. They can just, you know, use them in their inscriptions without, yeah, because it's already on-chain. And also, in terms of, you can think of it even as a kind of decentralized GitHub.

People can actually, you know, write, you know, more code and snippets of code that other people can use. and also it's a record of all the code. So you know, you can see the provenance of, you know, who authored it. But then also who uses it, which is pretty interesting. You know, basically you're building, you can say these applications on Bitcoin that also are building blocks for others and have a whole history of, you know, who's using them in their code. So that's pretty much a new thing. Like that thing doesn't, this type of thing didn't exist before. So, you know, it would be quite interesting to see how it developed.

I'm a little bit confused. I'm sorry, maybe I missed something in there. So I asked you about the recursive ordinals. Yeah. And I thought it was that the data kind of like can get updated and so you could have, yeah, like an NFT that sort of changes over time. But then now you're suddenly talking about almost like a mini blockchain within the blockchain where you're kind of tracking state. Are they the same thing or did you suddenly start talking about something else? So, let's see, recursion is referencing other inscriptions. But there's also this idea of, you know, how do you track state and changes of state? And that's also possible with these inscriptions, which is, I guess, a different topic.

But I was talking about how recursion is, you know, basically referencing other inscriptions so you can use them in the building blocks for future inscriptions. So basically a type of composability on Bitcoin. Okay. Okay. Well, so I have to ask you, you know, because here we are talking about ordinals and there's definitely a lot of commentary about them, but trading volumes are way down. According to Dune Analytics trading volume in May was about $120 million.

And for August, it was like roughly $12 million is down by 90%. So why do you think that is? and where will the market go from here? Yeah, I haven't followed the actual training line. So you're referencing or no's trading volume, right? Yeah, yeah, I look that up specifically on Dune. Okay, okay. Yeah, well, I mean, the market is very, it's a young market.

You know, there aren't, it's one that the protocol is still being developed. So, you know, it's, I think when the protocol reaches the 1.0 release, it'll be more attractive for people to work on because then you actually more clear what you can build and what you can't build. Right now there are still lots of question marks on that. And yeah, I mean, we're, I mean, NFT volume is down, you know, globally for all, like, you know,

ecosystems. So I think that's just a sign of the market right now that we're in. And in particular for Bitcoin, Ornos is, you know, It's still very new. So, you know, most people have might have heard of Ornos, but they haven't really actually tried it or dug in. I mean, the wallet infrastructure is just being developed. There are, you know, two wallets, you know, experts and a leather that are really, you know, innovating on and making it easier for people to use Bitcoin Ornos.

But it is still actually relatively hard, you know, hard to use because, you know, it's so new. All right. Well, one thing that you're working on that could. potentially make it a bit more consumer-friendly is an Ordnals marketplace for digital artifacts. It's called Osura, or maybe I mispronounce that, you tell me. Why don't you tell us about that? Yeah, so that is one, it's just going to be a curated marketplace for owners. It's because it is kind of the Wild West, you know, we want to curate what we think are kind of the high, and high quality, you know, ornose.

And we see that's also where this market in general will go over time because, you know, Bitcoin is, you know, basically the highest market cap blockchain that's considered to be the most secure. So, and decentralized and, you know, some great properties. So, you know, people who have very expensive and high value, you know, NFTs or they want to create very high value, you know, digital assets, they probably want to secure them on the most secure chain. And so I think that's the opportunity that Bitcoin and Bitcoin Ornos has. So we're focused on that market. And also because of the properties of being a digital artifact, it does

cost more to create these. And as the transaction fees on Bitcoin goes up over time, it's going to be impractical to be making, you know, let's say, you know, NFTs or digital artifacts that are like $5 or $10 because just after creating them might cost you $50 or $100. So it'll basically have a kind of a filtering mechanism for people who want to secure, you know, high value assets. So that's our focus kind of for the long term of where we think the market will go on Bitcoin. You know, I'd recommend for people that are students or not of American financial history to read a book by a stock trader in the late 1800s named Jesse Livermore. And he wrote a book called Reminuses of a Stock Operator. And in that era, as Danny was describing Wild West, there were many, many, many small exchanges all over the place where kind of penny stocks, I'm calling him penny stocks, but just shares of things would trade.

And these places were called bucket shops. And he would basically go around and trade on these things. And he made and lost a fortune, I think four times that in today's, the value would be like a billion. So, you know, make a billion, lose a billion, make a billion lose a billion. And he kept a journal and he wrote about all of his experiences and why he may have lost money or how he felt. You know, it's an amazing thing for people that are engaged in that kind of thing. And over the years, a lot of those bucket shops disappeared because they were not high integrity places with high integrity assets. And so what Danny and team want to do with Osura is create a place.

You know, I don't know that it will be a regulated place like the New York Stock Exchange, but the world needs a place where there's trust in the trustless system that we are, that the things that you are buying and selling, the people that you're working with have the right motivation to do good and to build a system that is meaningful for this world, not just, you know, scam everybody. So that's what Osura is about. Great. Well, one thing is, you know, at this moment, we kind of have pretty vibrant communities, NFTs already on Ethereum and Solana. It sounds like you're already, you know, working with some that have made it in those blockchains to, you know, come and work with you on Bitcoin.

What are those conversations like? How easy or difficult is it to try to persuade creators to leave other chains to do NFTs on Bitcoin? Yeah, great question. Well, first, I'm not. I think NFTs will do well on all the chains, a number of chains will overdo well. I mean, because they're their own ecosystem, and they have pros and cons. So, you know, Ethereum's like Big Pro is the smart contracting, or you can do a bunch with the smart contracts.

And Bitcoin's pro is actually this digital artifacts protocol. And also Bitcoin itself, because Bitcoin is that complementary, you know, blockchain security model, right? Because everyone else has moved towards proof of stake in some form. While Bitcoin is, you know, we are proof of work, you know, this is that security model. And that, I mean, that model is, you know, it's quite significant. I think also there's probably just going to be, you know, one winning proof of work change just because of the expense of, you know, proof of work. So Bitcoin is that chain, most likely, right, because that's the biggest network for that.

So we are focused first on actually just art because people understand art as an FD and also as a digital artifact in particular. Also artists, you know, when they're creating art, you know, they care about kind of lasting or the longevity of the medium, right? And so Bitcoin Ornos chooses, you know, Bitcoin is the medium for Bitcoin Ornos. And there are actually a lot of great properties of this medium for art. And so, you know, when that's kind of. of explained to artists, then they actually quite appreciate, you know, being able to do this. Right now, there's still some technical challenges for being able to do art on Bitcoin. But that's those things that are, you know, we're working out too.

And, yeah, so one of the artists that's coming over launching on Ashura later this year's is Alexei Andre, who's all known for friendship bracelets and 720. He's been an art block artist for a number of years and has some very amazing, you know, generative art pieces. So he's going to be launching a generative art collection, you know, on Bitcoin Oros on Osorah. And, you know, I think I hear a lot of, there are more and more artists who are looking into this. It's still pretty early days because we were talking about earlier, the idea of just being able to do a collection with the standards, it hasn't been clear yet. So, you know, if you're artists, you don't want to just, you know, launch on an unclear platform. But those are, it's becoming more

clear it. And I think towards the end of the year, it'll be, you know, yeah, actually a very, I think, attractive medium for art. But you can do more with Ornos, as we mentioned earlier. So I imagine one of the things that's next on your plate is managing this transition from having the on chain monkey collection on Ethereum over and moving it over to Bitcoin. Because you already have so many NFT owners out there, talk a little bit about how you're going to do that. And it seems like you probably need some participation from them. So it just seems like it might be a really challenging proposition. But tell me, you know, what your next steps are.

Yeah. So one of the things is, so NFTs have done pretty well the last, as in bringing new people into the crypto ecosystem the last couple years. So Ethereum in particular, like actually a lot of people joined Ethereum, you know, the last cycle who didn't even own Bitcoin or, you know, like Ethereum is the only thing they have. right. So now it's actually this new thing. Bitcoin is the new thing for them. And so we were educating them about how basically how to basically create a Bitcoin wallet. And in prison, or not's aware of Bitcoin wallet because as I mentioned, there are only a handful of those.

And then, yeah, how to basically secure that. And then it will make the migration very, very simple from Ethereum to Bitcoin and have some interoperability, basically. Because we have a pretty complex ecosystem already built up on Ethereum. So we're working on bringing that to Bitcoin. All right. Well, it has been such a pleasure chatting with both of you. Where can people learn more about each of you and your work? Yeah, I'm on Twitter.

It's H-U-U-U-E-P or Danny in lowercase upside down. And I'm just kite VC, moniker for my kiteboarding venture capital stuff. And, Danny, you want to point them to our website? Yeah, so onchainmucky.com. and that's both, also the Twitter handle is OnChain Monkey. Perfect. All right. Well, it's been a pleasure having you both on Unchained.

Thank you, Laura. Thank you. Great to be here. Thanks so much for joining us today. To learn more about Onchained Monkey and Bitcoin Ordinals inscriptions, check out the show notes for this episode. Unchained is produced by me, Laura Shin, with help from Kevin Fuchs, Matt Peltcher,

Juan Aranovich, Megan Gavis, Jenny Hogan, Shoshank, and Margaret Correa. Thanks for listening. Unchained is now a part of the CoinDesk Podcast Network. For the latest in digital assets, check out markets daily seven days a week with new host, Noel Atchison. Follow the CoinDesk Podcast Network for some of the best shows in crypto.