atlanta-bitdev-socratic-seminar-15.md

Bitcoin Socratic Seminar #15

• Topics: https://atlantabitdevs.org/2023/02/21/bitcoin-socratic-seminar-15/

Ordinals

• P2TR txs taking off!

  • https://twitter.com/murchandamus/status/1624834282534449153
  • Almost no one was using P2TR before ordinals
    • context: TR = taproot
    • TR was the softfork added to bitcoin ~2 years ago
    • it was deemed so important and such an obvious win for bitcoin that it took precedence over other BIPs
    • it was, arguably, rushed through the approval process using speedy trial only to not be adopted much for 2 years
    • TR provides lots of benefits: multiple spending paths (MAST), schnorr sigs (efficieny gain)
    • These primitives provide benefits like: key tweaking, coin recovery, complex spending scripts, taro, ordinals, more privacy, etc.
    • BUT! noone was using it, soooooo ... ??
    • Now, P2TR txs are skyrocketing which begs the question: Are ordinals bad for bitcoin?

• Ord has benefits for bitcoin! (whoa 🤯)

  • https://podcasts.apple.com/us/podcast/cd91-ordinal-inscriptions-with-casey-rodarmor/id1546393840?i=1000599243477
  • Casey spoke to ODELL in a Citadel Dispatch couple weeks ago
  • In the episode he made many interesting points:
    1. ord requires a full node, but what exactly is a "full node"? historically, this is an area of much debate
    • https://en.bitcoin.it/wiki/Full_node
    • full node, pruned node, archival node
    • how Casey expained it:
      • Pruned node = verify txs, but doesn't save all data (i.e. no witness data)
        • not fwd compatible w/ segwit nodes
        • can receive new tx and block data, and validate it all, but missing witness data
        • no witness data => cannot create new txs since it does not have full, validated UTXO set w/out witness data
        • if it does attempt a send (new tx), it will effectively create a new coin (not bitcoin)
        • segwit nodes will not accept the tx
        • implies that txindex=0 (i think)
      • Archival node = Assume valid is unset or set to something other than 0
        • doesn’t check txs "buried deep in chain"
        • aka syncs block headers and stores block + tx data
        • does not validate every tx + block from genesis to current tip
        • implies that txindex=0 (i think)
          • By default -txindex=0 when running bitcoin core
            • if you do not set txindex=1, bitocin core wont maintain robust tx-level data
            • it will, however, store tx data about:
              • txs in the mempool or relay set
              • txs pertinent to addresses in your wallet
              • txs pertinent to your "watch-only" addresses
            • so it wont validate and store global tx data
      • Full node = assumevalid=0, txindex=1, segwit v2 (TR) enabled
        • what is assumevalid? https://gist.github.com/bnonni/2a46b30fe171bfc8523edd4a835f8644#assume-valid
      • More nodes online? good for bitcoin
      • More FULL nodes online? very good for bitcoin
      • Is this a good externality of ord? 🧐
    2. ETH NFT "Degens" Moving to Bitcoin
       • created a new feature for ord called teleburn
       • lets you burn a NFT on ethereum and create an equivalent one on bitcoin
       • can prove ownership of bitcoin one bc you use your keys to create
       • eth "burn" means you send it to an address that you can cryptographically prove has no private key
       • no priv key == no ownership (aka no one owns it, its "burned" in affect)
       • Is more bitcoin adoption from the ETH / alt chain crowd a good thing for bitcoin? 🧐
    3. Blocks are full, fees are up
       • Was this not the point of segwit v1? Blocks with 4 MB weight, 1 MB size => more space for txs
       • Drove fees down initially until blocks fill, but did blocks fill? 🧐
    4. Don't have to adopt ordinal theory
       • ordinal theory is opt-in
       • while the data does live on-chain, and if you run a segwit v2, full node, you will store that data
       • however, you do not need to adopt ordinal theory and index, number and inscribe your sats
       • if its not universally adopted, does that make it "real"? 🧐
       • its a philosophical question

• Anythony Towns proposes an alternate method where data is stored off-chain

  • To me, this is the same idea as taro
  • Create arbitrary assets offchain, submit to chain via tx as origin point, all verification data lives with users
  • In this case, you're swapping one open source protocol (tarod, tarocli) for another (nostr)
  • Personally, I think this would be a downgrade as compared to taro because its not clear to me that nostr is here to stay
  • However, Lightning Labs has a stake, from a company perspective, in seeing that taro comes to life on mainnet
  • Aka I would bet SATs that taro gets implemented and adopted by LND nodes; I would not make the same bet on nostr
  • Ordinals has taken off BECAUSE it is onchain, at least that's the thinking given the failed past off-chain nft projects (list)