Inscription Pricing
As we stand on the cusp of a global economic contraction thanks to over 50 years of USD fiat currency, the fight for Bitcoin’s future is raging in real time on Twitter, with the approval of a physical Bitcoin ETF eagerly awaited. secretary. But in the trenches of Twitter, there’s a debate going on about what Bitcoin is and how we should and shouldn’t use it. I covered this battle in detail in Orange Label, but to summarize, there are two camps in this battle: monetary maximalists and block space demand maximalists. The big question is: Should the inscription be part of Bitcoin and how can it be stopped?
The purpose of this article is not to sway you one way or the other, but to share some figures on what your inscription may be priced at over time. Over the past year, we have seen the BTC price and hash rate double, and during that time, inscriptions have led to significant changes in block space demand. Fees rose to the highest in four years as Mempool removed reasonable fees.OneThis means that there are too many high fee transactions in the Mempool, so lower fee transactions are being removed from the Mempool. This means that low-fee transactions had no chance of being included in the block. What started as a comical novelty 12 months ago has brought in countless new Bitcoin users. This is an undeniable fact if we look at the number of reachable nodes in the network over the past few years.
As Bitcoin Twitter began to split on the topic, a meme emerged suggesting that the inscription would be priced as NGU technology does its job. This leads to the next logical question: At what point will the inscription be priced? That’s a matter for the market to decide. For now, you can simply run the numbers to see how much your inscription will cost as the price of Bitcoin rises.
A calculator
I love table calculators.23 I use it quite often when creating stories. For this piece, I wanted to know how much it costs to engrave a 100kb photo at various prices. It then turned to asking how much BRC20 shitcoiners are spending and when will this nonsense end. For reference, the size is approximately 50 bytes or 0.05 kb. I was able to track it4 Simplified formula for creating an inscription:
Ordinal inscription cost calculator formula
Total USD cost = ((((Inscription size in KB * 1000) / 4 * Commission rate)) / 100,000,000 ) * Current BTCUSD price
Important variables in this calculation are file size (KB), commission rate (sats/vbyte), and current BTCUSD price. Using this little bit of information, I was able to create a simple static table that allows us to see how different sizes of inscriptions increase the USD cost with fees NGU and BTCUSD.
This chart shows a lot of information, the most important thing to me is how expensive it will be to store data in blocks in the near future. Let’s look at an example 100kb image. The current fee is around 100 sat/vbyte and $50,000 BTCUSD, which costs $1,250 to engrave. That’s a big pill to swallow. Now let’s look at the poopcoin token BRC20 used for money laundering. The size is approximately 0.05kb. ‘The current fee is around 100 sat/vbyte, which is $50,000 BTCUSD, and it costs $0.63 to engrave. It’s a small amount, but these things are engraved on a single truck. We are talking about collections of 1m units. So, it is not a small amount and there is not a single BRC20, but a huge amount is being created. Questions about the liquidity of these things are for another post.
If you move down the chart with the BTCUSD price higher for each inscription size, you can see how ridiculous the situation is. If BTCUSD reaches $1 million, 200 sat/vbyte, our humble 100kb jpg will cost $62,500 to engrave. Similarly, the same BRC20 increases to $25 for a single token. This kind of price starts to set prices for really stupid coins like monkey pictures or memecoins.
As you can see, the cost of producing these inscriptions increases linearly with increasing BTCUSD. This alone would price out a large portion of the market. However, you should ask yourself that as the overall market size increases, will there be an influx of new entrants that will create additional demand? That means your pond will be bigger and your fish will be bigger. Small fish cannot be eaten.
What to expect?
It’s hard to think about what might happen next because there are so many plausible outcomes. But what I want to talk about again is the meme I mentioned at the beginning of this article. The inscription will be priced. Just crunch the numbers. I don’t lie. It’s unlikely that inscriptions will disappear in the short term, but there will come a point when it becomes too expensive for stupid things to exist on the chain. Low time preference activities take precedence.
I think the overall epitaph ecosystem continues to evolve. This means that people’s minds and opinions will also continue to change. We’re seeing thoughtful commentary from developers5 warning6 Changing the protocol to address or remove the use of inscriptions will only encourage people to “exploit” other parts of the protocol for valuable block space. We are seeing new and emerging ways to fund inscriptions and encourage data seeding through Bitcoin+ torrents such as ReQuest, Durabit, and Precursive Inscriptions. An inscription is a thing, block space is precious, and people are willing to pay for it. Bitcoin is for the enemy and it’s only going to get weirder. Deal with it, let it boil over, but don’t forget to have fun.
- What is reasonable is subjective, the market is clear. I’ve seen transactions removed with fees as high as 20 sat/vbyte, which I think is outrageous in recent memory. ↩︎
- Easy to understand hash price ↩︎
- Satsflow Scenario ↩︎
- Someone made this and it’s pretty handy. I created a table in Google Sheets using this formula: https://instacalc.com/56229 ↩︎
- “Concept NACK.
I don’t think this is in the interest of users of our software. The advantage of participating in a transaction relay and having a mempool is that you can predict what the next block will look like. Intentionally excluding transactions that have a very clear (no matter how foolish) economic demand undermines that ability without removing the need for verification at mining time.
Of course, anyone is free to run or provide software that delivers/maintains/mines whatever they want, but if having a realistic mempool is not your goal, you can also run it in -blocksonly mode. If this is your goal, much greater resource savings can be achieved.
If this is an attempt to not only view certain transactions but also suppress their use, this will result in a practice where, at best, those transactions are routed around the node that implements them, or at worst, the transactions are submitted directly. Miners face serious risks due to centralization of mining. Non-standardism has historically been used to discourage burdensome practices, but (a) it’s much less relevant these days when entire blocks are standard, which doesn’t reduce the cost of running a node anyway, and (b) I think it’s powerless to stop transactions. There is already an existing market that pays tens of BTC per day in fees.
I believe the demand for block space posed by many of these transactions is largely misplaced. But deciding not to see this is burying your head in the sand.” – Peter Wille Link ↩︎ - “Ever since the infamous Taproot Wizard 4MB block Bitcoin miners have been fighting to block the inscription. “The epitaph is certainly bad for Bitcoin, but the way Bitcoin users are trying to stop it is probably much worse than the damage the epitaph could cause.” – Ben Carman Link ↩︎
