In 2023 , Bitcoin core developer Casey Rodarmor launched an innovative protocol " Ordinals ". This protocol allows the creation of unique non-fungible tokens ( NFTs ) by writing data in Bitcoin’s smallest unit, the Satoshi. These NFTs , or "inscriptions," are similar to words carved on stone tablets and are permanently recorded on the Bitcoin blockchain.

What is Cryptocurrency Inscription?

Bitcoin inscription is the process of embedding any data or content into the smallest denomination of Bitcoin - Satoshi Nakamoto.

Generally speaking, the word " inscription " refers to something written, bent, or carved onto something else. But what are inscriptions in cryptocurrencies? Here, it is the process of attaching metadata to a cryptocurrency. For example, the inscriptions in Ethereum and Bitcoin are called Ethscriptions and Bitcoin Inscriptions respectively. It is equivalent to the relationship between gold and gold ornaments. After processing steps, gold becomes gold ornaments, but its essence is still gold.

Bitcoin inscriptions, also known as "Ordinal Inscriptions" , are a new way of writing additional information or digital artifacts on the Bitcoin blockchain. The engraved information includes pictures, videos, text, audio, etc. These additional data are attached to single Bitcoin units ( satoshis ), the smallest unit of Bitcoin representing 0.00000001 BTC , and are digital works of art.

What is a Bitcoin block?

Each Bitcoin block has a limited data storage space and can be regarded as a ledger that records financial transaction data. When a certain number of transactions is reached, the block size will be capped and no more transactions can be accommodated. Historically, the block limit has been capped at around 1.4MB . However, with the introduction of Bitcoin Inscription and a series of network upgrades, such as Segwit and Taproot , the size of each block has now increased to 2.5MB .

Cryptocurrency inscriptions of other public chains

With the launch of Bitcoin’s inscription protocol, other public chains have also launched their own inscription protocols. Dogecoin’s DRC-20 protocol records on its smallest units, “elons,” while Solana ’s SPL-20 protocol reached explosive growth in November with more than 400,000 inscriptions. Ethereum’s Eths , or Ethscriptions , allow for the engraving of various files up to 96KB on the mainnet, which benefit from the security and decentralized nature of the Ethereum network.

The prospects and prospects of inscriptions

Although the emergence of Ordinals is still in its early stages and still needs to be improved in terms of liquidity, breadth and market acceptance, its launch has undoubtedly attracted the attention of the cryptocurrency market. Some worry that this may be just a short-lived hype, similar to the dot-com bubble or the ICO mania of 2017 . However, there are also those who believe that even a bubble will leave something valuable behind. Since its birth in 2009 , Bitcoin has developed from a game currency to a widely recognized "digital gold", and some countries have even adopted it as legal tender.

After the launch of the Ordinals protocol, activity on the Bitcoin network surged, mining fees ( GasFee ) soared, and transaction volume once exceeded Ethereum's NFT market. All this shows that no matter how the market changes, we should keep an open mind when it comes to the exploration and application of new technologies in order to discover and cultivate their potential value.