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Ordinals Growth in Danger as Bitcoin Bug Fix Could Impact BRC-20 Tokens

Last Updated December 6, 2023 11:16 AM
Teuta Franjkovic
Last Updated December 6, 2023 11:16 AM

Key Takeaways

  • Bitcoin Ordinals and BRC-20 tokens are causing excessive network congestion.
  • A proposed bug fix could halt the creation of new Ordinals and BRC-20 tokens.
  • The potential cessation of Ordinals and BRC-20 tokens is raising concerns about innovation.

A potential bug fix in the Bitcoin network could halt the creation of new Ordinals and BRC-20 tokens, as they are reportedly causing excessive network congestion by exploiting a vulnerability.

Bitcoin Core developer Luke Dashjr raised the issue in a recent Twitter post, stating that inscriptions, the mechanism used by Ordinals and BRC-20 creators to embed data on satoshis, are exploiting a vulnerability in Bitcoin Core to “spam the blockchain.”

Bug Fix to Address Ordinals and BRC-20 Token Spam

According to Dashjr, the Bitcoin Core code has allowed users to impose limits on the size of additional data in transactions since 2013. However, by disguising their data as program code, inscriptions are able to circumvent this restriction.

This loophole has led to a surge in inscriptions and BRC-20 tokens, resulting in network congestion that could hinder the smooth operation of the Bitcoin network.

The proposed bug fix, if implemented, would effectively close this loophole, preventing Ordinals and BRC-20 tokens from being used to exploit the vulnerability. While this would address the network congestion issue, it could also stifle the growth of the Ordinals and BRC-20 ecosystems, raising concerns about the potential impact on innovation and development within the Bitcoin network.

The recently patched bug allowing inscriptions to exceed data limits was addressed in the latest update to Bitcoin Knots, a Bitcoin Core derivative featuring less tested or untested features backported from, and occasionally maintained outside of, the core code.

When questioned on X about the potential cessation of Ordinals and BRC-20 tokens if the vulnerability was resolved, Dashjr affirmed , “Correct,” though existing inscriptions would persist.

Dashjr expressed concerns about the vulnerability persisting in the upcoming v26 release of Bitcoin Core, stating: 

“Bitcoin Core is still vulnerable in the upcoming v26 release. I can only hope it will finally get fixed before v27 next year.”

Ocean’s Update Targets Ordinals Inscriptions, Raising Concerns

On December 6, Ocean, a decentralized mining protocol where Dashjr serves as chief technology officer, announced on X that the Bitcoin Knots upgrade “fixes this long-standing vulnerability exploited by modern spammers.”

In a recent update, Ocean Blockchain upgraded its Bitcoin node software to prioritize “real transactions” over Ordinals inscriptions, a feature that allows users to embed data and non-fungible tokens (NFTs) onto individual satoshis, the smallest unit of Bitcoin. This move implies that Ocean views Ordinals inscriptions as a form of denial-of-service attack on the Bitcoin network.

Ordinals Inscriptions Face Growing Backlash from BTC Stakeholders

Luke Dashjr, a prominent Bitcoin Core developer, has been a vocal critic  of Ordinals inscriptions, asserting that they are “doing huge and irreversible damage to Bitcoin and Bitcoin users.” He maintains that the Bitcoin community never authorized Ordinals and represent an attack on the network.

The introduction of the Ordinals protocol by Casey Rodarmor in January 2023 has sparked debate within the Bitcoin community, with some expressing concerns about its potential impact on network congestion and transaction fees.

The recent surge in Ordinals inscriptions and BRC-20 token minting has indeed led to increased congestion, with over 275,000 unconfirmed transactions and average medium-priority transaction costs rising to around $14 from $1.50.

Ocean’s decision to prioritize “real transactions” over Ordinals inscriptions signals a growing concern among some Bitcoin stakeholders about the potential negative effects of Ordinals on the network.

While this move may help alleviate congestion in the short term, it also raises questions about the future of Ordinals and the balance between innovation and network sustainability.

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