How to delicately handle BRC-20 and ordinal numbers without breaking Bitcoin

For months, Bitcoiners have been furiously debating the Ordinals phenomenon and the large amounts of trading activity and congestion they have brought to the chain.

It is a very subtle conflict where it is difficult to find the right “ideological” response. I won’t try to give a definitive answer here. Because ultimately it depends on the community as a whole. But I hope we can all agree on some common ground rules that can help resolve disputes without entering another war that results in a bitter hard fork.

A story about free markets and a higher purpose.

The complexity of the debate lies in the cognitive dissonance that Ordinals cause within the Bitcoin community. It’s safe to say that Bitcoiners are very pro-free markets, pro-liberty, and pro-financial freedom.

And on the one hand, ordinal numbers are the purest expression of free market will. If some people are okay with paying to trade with rigged tokens that push the capabilities of Bitcoin Script to the limit, who are we to say this is a mistake?

The foundation of the Bitcoin network is to use self-interested economic incentives to produce positive outcomes for everyone: neutral value settlement and the creation of a payment hierarchy.

Miners, one of Bitcoin’s core pillars, are generating huge profits through Ordinals.

And the long-term benefits of Ordinals and BRC-20 to the network are undeniable. Ordinals boosted the commission percentage of miners’ overall revenue to around 10%. This is similar to what we saw during the most active phase of the 2021 bull market.

Some Bitcoin users may choose to ignore this issue, but the fact remains that without mining rewards, Bitcoin security would be weak at best. It follows that anything that can promote the use of the Bitcoin blockchain is good for Bitcoin. Yes?

Of course it’s not that simple. Ordinal numbers make it more expensive to use Bitcoin for what it was designed to do: payments and transfer of value.

Some hard-line Bitcoiners would probably have a heart attack if they saw the community embracing speculative trading in shitcoins as a “solution” to their security budget problems. And that isn’t entirely wrong.

Bitcoin was created as a means to break away from the tyranny of central banks, provide everyone in the world with access to money in the most difficult times in history, and serve as a neutral layer that people can use regardless of their economic, geographic, or political background. Speculative trading in shitcoins doesn’t exactly serve a higher purpose.

So while Ordinals are perhaps a legitimate use of Bitcoin that fits the free market-oriented principles that Bitcoiners share, they ultimately prevent Bitcoin from achieving its true purpose. How do you reconcile this?

Is pragmatism the name of the game?

There is currently an unresolved issue on Bitcoin Core GitHub that suggests treating Ordinals as a vulnerability in Bitcoin Core. The only appropriate response here is to eradicate it by any means possible.

That’s certainly one way to think about it, but I think this approach is too reckless a response. Bitcoin is beautiful in its simplicity and robustness. The community has rightfully resisted any meaningful changes to Bitcoin’s fundamentals over the past few years.

Ordinal numbers and BRC-20 are a bit of a trick, but they still follow Bitcoin’s rules. They pose no more risk to Bitcoin than the overzealous traders of 2017, who caused the largest increase in Bitcoin fees to date. In spiritual terms, it is also not much different from the Omni protocol, which introduced tokens to Bitcoin using the OP_RETURN field (USDT is probably the most famous user).

The consensus in the Bitcoin community is that most users should use L2 solutions to transact with BTC, and the main chain should be reserved for very high value and high cost usage. This is ultimately the only way to fit sufficient transaction fees into the current block size to ensure a long-term security budget.

If L2 achieves mass adoption, the majority of Bitcoin network usage will be the data layer of these auxiliary protocols. I don’t think this would be the worst thing in the world. And if I had to choose, I would choose Bitcoin as the data availability solution for extremely sensitive information. This is a long way ahead of custom solutions whose future largely depends on the coffers of a single development company.

But the core argument is that changing Bitcoin must be extremely slow, methodical, and computational.

I understand the hostility towards the way Ordinals are primarily used today, but they can also be very useful for non-speculative purposes. I will definitely choose them to save my next Wikileaks.

There is also an argument for speculators. Without them, Bitcoin would not have reached the global popularity it has today. This has always served as a Trojan horse, a way to bootstrap the network effect needed to make Bitcoin a global currency.

Unless BRC-20 and Ordinals put Bitcoin at realistic risk, we need to ensure they have time to evolve and grow. This doesn’t mean you have to do anything at the network level to get more support. Simply put, if it works, don’t fix it. We will see real value come from this experiment.

This is a guest post by Robbie Greenfield. The opinions expressed are solely personal and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.