Inscription: The cure is worse than the disease
Ever since the infamous Taproot Wizard 4mb block Bitcoin miners have been fighting to block the inscription. The inscription is clearly It’s bad for Bitcoin, but the way Bitcoin miners are trying to stop it will be much worse than the damage the inscription could cause.
Inscriptions work by using tricks in Bitcoin Script to insert images or other data into the Bitcoin blockchain. They essentially put data into an unreachable block of code followed by actual spending terms so that users can claim the ordinal/NFT. This is a very ingenious trick, but it breaks many of the assumptions many Bitcoin investors were operating from. Previously, the main way to insert data into Bitcoin was OP_RETURN. This was basically an op code for data insertion, but it presented two problems for NFT users. This makes the coin unusable and limited to 80 bytes by mempool policy. Inscriptions have the advantage that the only size limit is the block size, and because the data is in the witness rather than the output, you can insert 4x the data with the benefit of a witness discount. This shattered the assumption of many Bitcoin users that theoretically 4MB blocks would never happen, because it would be foolish to only have eyewitness data. But NFT folks have found a way to monetize it. Now this is a common place and we have seen numerous inscriptions occur, leading to increased fees and block sizes.
But now that it’s happening and it’s become common, we can’t stop it.
In retaliation, Bitcoin miners are proposing a way to “stop” the inscription, which will cause much more serious damage than the inscription. Almost all proposals to stop inscriptions boil down to preventing these transactions from entering the mempool. Mempool is the battleground for Bitcoin transactions and we must preserve it. Mempool only works if it is the best way to provide miners with transactions with the highest commission rates. If we lose that guarantee, people will move to centralized systems and we may never get the mempool back. Filtering out spam transactions from the mempool will not stop the inscription, it will only delay it by a week at most. , they are already in back-channel communication with the mining pools, and if we block them from the mempool, the only pools that receive these fees will be the shitcoin sorting pools. This has already happened in many shitcoin networks where mempools have been shut down for one reason or another, and now the main way to broadcast transactions is through a centralized API. This essentially creates a permissioned network, where anyone can run a node but cannot access Bitcoin without access to the transaction broadcasting API. We are currently seeing Congress working harder and harder to regulate nodes, miners, and wallets, and losing Mempool will make this problem 1000x worse. There are also serious security issues as losing the mempool would result in no trustless fee estimation, but that is beyond the scope of this post.
Additionally, filtering transactions based on “spam” indicators can lead us down a dark path. The most economical ways to trade Bitcoin are: ~ no The most personal. The most popular way to protect the privacy of on-chain Bitcoin today is to perform a CoinJoin. CoinJoin is not necessarily a financial transaction, just spending money on yourself along with others. If you set a precedent that you have to justify the usefulness of your transactions to avoid being considered spam, people will soon find ways to exploit this to get CoinJoin and other privacy-preserving technologies banned from the mempool for spam.
We have seen many shitcoin bubbles over the past decade and this one is no different. The shitcoiners will eventually lose the idiots who buy their scams and things will go back to normal. But we can’t shoot ourselves in the foot trying to stop things early when we can just wait for them.
#SaveTheMempool
This is a guest post by Ben Carman. The opinions expressed are solely personal and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
