An objective look at the technical concerns behind Ordinals and their implications on the Bitcoin network.
This is an opinion editorial by Mark Goodwin.
ordinal (adj.)
c. 1400, “ordinary, regular; well-ordered, proper,” from Old French order and directly from the late Latin ordinal “showing order, showing order of succession,” from Latin order (genitive ordered) “row, series” (see sequence (n.)). Meaning “to mark the place or position of an object in an order or series” is from the 1590s.1
There are two types of numbers; ordinal and cardinal. Ordinal numbers show the rank or position in a system, while cardinal numbers count the number of units of a thing. You can think of an ordinal as a number used when telling the position of a runner in a race, or even in the direction of driving. “Take the third left.” You can think of the cardinal as the number used when counting the number of jelly beans in the big jar at the fair. In bitcoin terms, the chain block height will be an ordinal number – the 10th block – while the number of satoshis in the transaction fee will be a cardinal number, 1000 sats.
Ordinals is an open source project from Bitcoin developer Casey Rodarmor that consists of two distinct parts; Ordinal Theory and Inscriptions.
Ordinal Theory is an arbitrary but sensible framework for tracing the lineage of individual satoshis using ordinal numbers obtained at the time of publication. At the height of the current block – there have been three halvings starting from 50 bitcoins (50, 25, 12.5, 6.25) – when the correct block is found, a lucky miner can determine 625,000,000 satoshi for himself in a coinbase transaction, which has no input. At the current difficulty, miners use this reserved but empty input as an extra nonce space for hashing. The Bitcoin network is a series of peer-to-peer databases, full of integers that contain the current state of the protocol. You can think of ordinal theory as a conceptual social lens for all the numerical data displayed on the bitcoin block. By creating (cc: consensus) rules to see how individual satoshis are theoretically distributed after a bitcoin transaction, Ordinal Theory only suggests a single perspective for the interpretation of Bitcoin, explained in the Index. Each satoshi is given a unique ordinal number as early as a candidate block, starting from 0, and will continue to count until just below 2.1 quadrillion, with 100,000,000 satoshi groupings conventionally referred to as “bitcoins.” This number is set in the issuance of the block regardless of the extremely rare but valid account of the miner successfully completing the block reward-issuing the output transaction Coinbase transaction without a valid bitcoin address Every bitcoin transaction, except for this Coinbase transaction, requires both input and output In a bitcoin transaction, satoshis from Separate UTXOs, or the output of unspent transactions, are completely indistinguishable and thus fungible atoms when used through the output address. The Ordinal Theory suggests that it is purely social in nature that there is an order for the distribution mechanism, and satoshis are sent in the first in, first out way, and ordered by input. Because of this arbitrary logistic assumption, you can scan your bitco in your wallet for UTXOs to try and find rare ordinals. The two rare ordinals are directly from the consensus itself, such as the first satoshi in the block after half – the legendary ordinal – or even the specific satoshi of the block issued during a private event. There is a satoshi associated with every number from 0 to just 2.1 quadrillion, with various opportunities for numerical repetition, unique integers, and interpretive iteration. Ordinal theorists can even estimate the interpretation of 5,412,388 satoshis as base26, “BLOCK”.
The recently released Ordinal 0.4.2 is a special bitcoin wallet that programs special signatures of bitcoin transactions using rules in the consensus protocol to write any kind of data to the witness sidechain. That is, of course, if it offers a market fee and propagates to willing miners. This software allows, with ease of access, buyers who are willing to buy book space, especially to enter the witness data. In 2017, SegWit, the bitcoin softfork theorized by Peter Wuille and Luke Dashjr., among others, removed the signature data from transactions in blocks and placed them in block extensions of approximately 4MB. By introducing a new metric for block size in the form of weight units, SegWit makes a distinction between bytes and vbytes (four weight units), limits the maximum block weight that is approximately taken four times non-witness bytes (transaction input and output. ) and subtracts from total witness data (signature and unlock script). This was implemented so that the previous generation of Bitcoin software could still validate transactions, but in effect increasing the available blocksize by releasing up the block limit of 1MB set by Satoshi at the end of 2010. SegWit was also built to overcome malleability attacks by divorcing the witness data. so keep the transaction id. The idea of this “sidechain”, economically, will be reduced at the rate of satoshis per vbytes to encourage the rather complex bitcoin script to be launched which has traditionally enabled scaling efforts; The Lightning Network itself requires HTLCs, or hash time locked contracts, to probabilistically enable trust in exponentially more efficient, connection-UTXO payment channels. Taproot, the 2021 bitcoin soft fork enables op_codes and Merkelized Alternative Script Tree (MAST) with a type of transaction called P2TR, or Taproot script payment, as well as raising the standard limit for data relay. While SegWit is a critical ledger state change in creating this witness data block extension, Taproot is more of a system update that unlocks scaling and privacy features. Both of these forks are necessary to specify exactly how Ordinal 0.4.2 operates, but the ability to pay miners for block space to include arbitrary data in bitcoin has existed since the genesis block. This is perhaps most infamously done in OP_RETURN, which allows the output to be used to display a message or encode a key in the available 40 bytes, leaving the UTXO unspendable, but easily prunable from the UTXO set.
Ordinal’s software allows users to generate legitimate bitcoin transactions that contain arbitrary script data such as text files, PNGs or even their own program scripts. The transaction is signed using this modified wallet software, Ordinal 0.4.2, in the form of an op_code “envelope” that is eventually written to the transaction witness data. This envelope is generated using the OP_FAIL code, which by default does not push the following code onto the programming stack. The data for the Inscription, which contains the file type data header and the file itself, is placed in the following OP_IF instance destined to open op_code and sealed with the end program OP_ENDIF if-ran. Because of the use of this op_code, the Inscription data can ultimately be cut from your own node, and the computations required to validate expensive weighted scripts can be under the open Lightning channel. Since block sizes have been static since SegWit, the implications on node runners’ fear of centralization due to the increased cost of running nodes are no worse than if blocks were just routinely full; perhaps even less. Regardless, near a complete block is the desired outcome of a successful bitcoin network and one the network should be prepared for.
The inscription is associated with a specific satoshi of the transaction, and thus can be associated with one recorded in Ordinal Theory. This simulated way to read Bitcoin blocks creates a potential path for users to sentimentally value one satoshi over another. If the holder of the ordinal is willing to exchange more than a single satoshi value, this can, in a certain sense, destroy fungibility. But again, that always happens and can be done on local exchange rates for fiat pairs, market arbitrage, unprogrammed transactions, or even naive peer-to-peer barter. There is no inscription or Ordinal Theory that causes a change of state in the satoshi atomic principle; it is purely a social lens. Privacy concerns decide the same way; there is no molecular tracer in the inscription that tracks your individual in the pure functional function of a bitcoin transaction. They all come out exactly the same, but you only happen to see one like that. You can spend ordinal exactly like any other satoshi.
Bitcoin is a database with a defined consensus, and nothing in Ordinal Theory or Inscription violates these rules. But no one goes against the consensus by running adversarial nodes on Lightning route collecting metadata for surveillance, pin attacks, using chain analysis software, or even bitcoin donation fraud. The point is that the fact that it only works for bitcoin does not mean that it is good for the users of the system. But Bitcoin is a system of rules, not biased, and the arbiters of validity must remain in code. The nodes that Inscribers have aligned since the release of Ordinal 0.4.2 contain the rules of what constitutes a valid block and the dynamic blockspace fee has set the market only that which is valid with economic demand legally. Inscriptions have the unique property of selective impermanence with the potential to leverage the database and increase market demand for bitcoin assets and bitcoin blockspace. The worst action you will take is the one that rushes to destroy the situation you are currently fighting for. Anyone can buy every block forever. Anyone can always fill in arbitrary data in a smart transaction if they want to pay a fee.
But why in the world would you waste your satoshi?
You may accidentally spend the rare.
1 https://www.etymonline.com/word/ordinal