Bitcoin inscription has increased the average size of cryptocurrency blocks; Here’s how this can lead to blocking.
Impact of Inscriptions on Bitcoin Block Size
Very recently, “Inscriptions” have appeared in the Bitcoin network, basically the application of the BTC blockchain is similar to non-fungible tokens (NFT), but they are not the same.
Unlike NFTs on other blockchains like Ethereum, these Inscriptions are written directly on the Bitcoin blockchain (hence the name). Inscriptions can be data, images, audio, video, or even software.
Since they are directly stored as transactions on the blockchain, they have quickly inflated the size of the chain. This made the asset a topic of discussion in the community regarding its impact on the future of cryptocurrency.
In a recent report, on-chain analytics company Glassnode has shown how this new BTC application is affecting the network. One obvious implication is about block sizes, which are almost always limited.
In terms of impact on the total block size itself, Inscription transactions have increased by 1.74GB since December 15, 2022 (when they first appeared), as shown in the chart below.
Looks like the size contributed by Inscriptions has been rapidly going up | Source: Glassnode
Compared to the 444GB total size of the Bitcoin block, Inscription represents an increase of about 0.4%. Most of this rise comes from Inscription images, which is no surprise considering that the most popular type around.
In total, 93.3% of the data footprint comes from images, while text inscriptions, which are the best below, contribute about 4.59% to the increase. Audio, video and other Inscriptions have a small data footprint.
However, audio and video types are the largest in the average size of Bitcoin Inscriptions. The footprint is still the lowest as the frequency has been significantly reduced compared to image or text types.
Inscription currently only accounts for 4.2% of all transactions on the network, but it’s interesting to see the block size portion it occupies.
The 24-hour MA blocksize share of Inscriptions in recent weeks | Source: Glassnode
Inscriptions occupy 47% of blockspace today, although only 4.2% of transactions, indicating that this type of transaction is more data rich. At its peak, Inscription takes up 60% of the block size.
Glassnode notes that blocks are usually empty before Inscriptions appear on the scene, with transactions only taking up 25-50% of the available blockspace.
“This has changed dramatically since the emergence of the Inscription, with blocks now generally reaching between 80-90% saturation (3.2-3.6MB),” the report explains. “Since blockspace cannot be stored for future availability, one can consider Inscription as a consumer of blockspace that will end up empty.”
Since this is only the current impact of Inscription on the Bitcoin blockchain, one big question remains: what could be the long-term impact on the size of the chain? To answer this question, Glassnode has modeled what the next 14 years could look like for BTC for three block size assumptions.
Evolution of the size of the blockchain | Source: Glassnode
The three block size assumptions (which are based on simulations) are as follows: 1.35MB (which is the 30-day average block size on the day before the Inscription), 2.50MB (the average post-Inscription peak), and 4.00MB (the limit above theoretical).
Assuming that the scenario above the theoretical bound follows, the size of the Bitcoin blockchain will grow to 3.41TB in March 2037. At current hard drive prices, the hard drive needed to store files of this size is only $120. This means that the future impact on data storage requirements in the chain is likely to be insignificant.
BTC price
At the time of writing, Bitcoin is trading around $24,900, up 10% over the past week.
BTC has shot up today | Source: BTCUSD on TradingView
Featured images from Vasilis Chatzopoulos on Unsplash.com, charts from TradingView.com, Glassnode.com