Full Concept Analysis: A Revolution About Inscriptions

Written by: BlockSec

On January 10th, Eastern Time, the SEC officially approved 11 Bitcoin spot ETFs!This historic moment is destined to be recorded in the history of the encryption industry. And a brand new concept surrounding Bitcoin——inscription, also frequently appears in front of investors around the world.

The addition of many myths of wealth and the continued influx of capital have made Inscription, a new concept that claims to be able to revolutionize the Bitcoin ecosystem, even more popular. Recently,As the market value of Bitcoin heats up, the popularity of inscriptions has also reached its peak.

But the vast majority of people are like looking at flowers in the mist or looking at the moon in the water. Although the price increase of inscriptions is dazzling, most people still have little understanding of inscriptions. What they see is the rise in prices, but they often ignore the technical implications behind it. This state of half-understanding undoubtedly increases the uncertainty of investment. SoWhat exactly is an inscription? How is it implemented?Don't worry, this article will take you about 10 minutes to read and give you a comprehensive explanation of the inscription.

Origin – Bitcoin Inscription

In January 2023, the Ordinals protocol proposed by Casey Rodarmor announced the birth of Bitcoin Inscription.The Ordinals protocol allows users to convert text, images, videos andcontractWait for data to be written directly to BitcoinBlockchainXiaobai Navigation.

From a rough perspective, isn’t this Bitcoin’s NFT?But above Bitcoin L2 Networks, such as Stacks, have already fulfilled this need? Wait! Note that Ordinals isWrite directly to the Bitcoin mainnet instead of the Layer 2 network. This change directly affects Bitcoin, a huge financial entity. The amount of funds affected by this change is completely different from that of Laryer2.

️So how is this agreement achieved? Know that Bitcoin is not fully intelligentcontractExecution Environment (EVM), how can we add new protocol support to Bitcoin?

This starts with the design principles of the entire BTC network and the repeatedly changed protocol. In the original design of Satoshi Nakamoto, the Bitcoin ecosystem has the smallest indivisible unit - Satoshi (1/100,000,000 of Bitcoin), and each Satoshi is minted by miners after proof of PoW, and naturally has different and unique characteristics. Serials number. With the help of this unique serial number, Bitcoin can be traced back to its minter and owner. In the 2021 upgrade, the Taproot protocol was added, allowing some complex information to be written into notes, and the upper limit of information that can be stored in a block was expanded from 1M to 4M, which allows more rich information to be written into BitcoinBlockchainProvides technical potential.

The essential principle of the Ordinals protocol is that it extends the sequence number information on Satoshi. Specifically,Ordinals 协议利用了聪上独一无二的特性，将单一的序号进行了扩展，加入文本、图像、视频和合约等数据。从而使得每个聪都成为了一个独特信息的载体，并将数据存储在比特币链路上，从而保证其不可篡改性。

For example, we take out a UTXO and prepare to engrave the inscription content "hello, world!" on it. We need to record the information content of Ordinals in the taproot remarks, and then engrave these records on the first inscription of UTXO during the transaction, thereby recording the content of the inscription on the chain. (Of course, these contents need to be serialized before being deployed on the link)

If there is no note for this transfer or the transaction fails due to special circumstances, the note message will not be considered valid content.

In the early days when the Ordinals protocol was proposed, a large number of users used it as a carrier for NFTs. However, in the BRC20-protocol proposed on March 8, 2023, a homogeneous currency protocol similar to ERC20 was proposed on the Ordinals protocol. Thus, the market for inscriptions began to take shape.

We use a simple example on ordiscan to illustrate the ecological transaction process of this BRC20 currency:

First, the project team needs to deploy a series of inscription assets so that subsequent people can mint this series of assets. How to do it specifically? First, the project party records the executable code (scription) that complies with the brc-20 rules on a Satoshi according to the Ordinals protocol, and then sends the Satoshi with the code engraved on it to the chain.

Specifically, the project party used the BRC20 protocol and deployed an SAIThe token series of

On the chain, this satoshi with the code imprinted on it is sent out and is used by BitcoinBlockchainRecord. At the same time, off-chain, the server listening to the Ordinals protocol on the Bitcoin chain discovered this code that complied with the protocol. As a result, the virtual machine off the chain executed this code. That is, the off-chain virtual machine deploys a brc20 token named SAIX and configure all properties. After this, other users can use the mint method to mint their inscribed assets.

After that, users who need to mint inscription assets can use the brc-20 protocol to mint inscription assets belonging to the user in transactions. For example, the user invoked the mint action, thereby minting 6250 SAIX. The owner of the inscription at this time is the payment address excluding the GAS fee after the transaction is initiated, such as bc1p4802...nqah89gr in the picture.

After successful casting, if the user needs to transfer his inscribed assets, he can transfer 6250 BERUs by inscribing brc-20 on Satoshi as the above code says. Of course, the target address of this Bitcoin transaction naturally has these brc-20 tokens.

So we can roughly understand,比特币生态的铭文其实是依赖于 Ordinals 协议所产生的，记录在比特币区块链上的另一种虚拟资产。The project party will engrave the information recorded in the inscription (including pictures, web pages, and token names) on Satoshi in accordance with the agreement. Then the user performs financial attribute operations such as mint and transfer of assets based on the special codes in the transaction. Compared with the previous Layer2,The significance of Bitcoin Inscription is that it directly expands the hugely funded Bitcoin mainnet, introduces the possibility of diversifying assets, improves the flexibility of the Bitcoin ecosystem, and thus taps the potential of the Bitcoin ecosystem.

Derived extension - EVM inscription

After Bitcoin inscription became popular, the EVM chain also proposed the concept of inscription. However, since the EVM chain has a smart contract design, the diverse information functions brought by the inscription design have already been realized by smart contracts. Therefore,The ecological story carried by EVM inscriptions is slightly different than that of Bitcoin inscriptions.

Due to the Gas design of smart contracts in Ethereum, the gas fee required for any successful contract interaction is at least greater than 21,000, which has caused problems for users of the entire ecosystem.Heavy gas fee pressure. Ethereum Inscription bypasses the design of smart contracts and aims to move the operations that need to be performed off-chain by sending data fields to EOA. When the off-chain Inscription virtual machine listens to the data field on the chain that complies with the protocol rules, the Inscription virtual machine will execute the result and match the execution result to the on-chain hash that sent the transaction at that time, thereby saving the need to perform operations on the chain. handling fee.

Here we give an example of the ERC-20 inscription protocol. First, the user transfers 0ETH to his or her EOA address, thus triggering the monitoring mechanism of ERC-20 inscription and triggering the inscription server to parse the content of calldata. At this time, the content of calldata is similar to the BRC-20 protocol, which specifies p-protocol, op-behavior, tick-token collection, id-the id number of the current token and amt-the number of operations. According to the content in calldata, after the off-chain EVM inscription server monitors the transaction, it will execute the transaction content, mint the corresponding token to the current EOA account, and record this token in the off-chain index.

as far as I can tell,The inscription operation of EVM is mainly to reduce the expensive handling fees on some EVM links, thereby making transaction costs cheaper.. Although this design will be easily reminiscent of Layer2. However, Layer 2 mainly expands the main network and has a complete smart contract execution environment, while EVM Inscription mainly reduces handling fees and does not have a complete smart contract execution environment. Therefore, the current design of EVM inscriptions mainly focuses on reducing the handling fees of EVM links as the ecological function it carries.

Inscription common protocols

The Ordinals protocol is the cornerstone of the Bitcoin Inscription protocol. In addition to the Ordinals protocol, many common Bitcoin Inscription protocols have been born.

Bitcoin Department – Famous Project

• BRC-20: Ordi, sats, rats

• ARC-20: ATOM, Realm

• Bitmap

• Rune:Pipe

Ethereum Department – well-known projects

• Ethscription: eths, Facet

• IERC-20：ethi

Current status of inscription ecology

The current status of inscription ecological transactions on BRC-20, on January 11, 2024,The 24-hour volume is close to $12.27M.

The current status of the Inscription ecological transaction volume on ETH, on January 11, 2024,The 24-hour volume is close to 53.66ETH (139,516 U).

Overall, the current Inscription ecology is still dominated by the Bitcoin ecology, with increasing transaction popularity, huge transaction volume, and significant growth in total funds.

Conclusion

By deeply exploring the principles of inscription and its innovative role in the Bitcoin ecosystem, we can easily find that the introduction of inscription technology is not a temporary gimmick or a simple technological iteration. It represents the Bitcoin network’sSafetyA big step forward in performance, scalability and practicality. The implementation of the Ordinals protocol and the BRC20 protocol has opened new application scenarios for the Bitcoin blockchain. However, users still need to remain cautious. The market for inscription assets is still in its infancy, and its value and trading rules are constantly evolving. Therefore, a deep understanding of how these new technologies work is crucial for anyone looking to invest or innovate in this space.

The article comes from the Internet:Full Concept Analysis: A Revolution About Inscriptions

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