Bitcoin Developers Divided: Should BRC-20 Ordinals be Censored or Not?

The excessive number of BRC-20 tokens produced through the Ordinals protocol has led to congestion on the Bitcoin network and a surge in transaction fees, prompting blockchain developers to engage in a discussion on how to control the on-chain activity.

The bitcoin-dev mailing list, known for hosting discussions on Bitcoin development, is currently witnessing a lively debate on how to address the issue of excessive BRC-20 token mints that are causing network congestion and skyrocketing transaction fees. The community is deeply divided on whether radical solutions need to be implemented to tame the surging on-chain activity.

The steep rise in transaction fees has compelled certain Bitcoin users in Africa to explore alternative payment methods such as stablecoins. Meanwhile, major crypto exchange Binance has announced plans to integrate the Lightning Network, a "layer 2" scaling solution for Bitcoin. This surge in on-chain activity has proved to be lucrative for Bitcoin miners but has sparked a philosophical clash for blockchain purists who believe in the original vision of a decentralized, censorship-resistant peer-to-peer payment network.

“Real bitcoin transactions are being priced out,” wrote mailing list member Ali Sherief, who started the thread on Sunday. “Such justifiably worthless tokens threaten the smooth and normal use of the Bitcoin network as a peer-to-peer digital currency, as it was intended to be used.”

Sherief suggested addressing the issue of Ordinals token mints by creating a Bitcoin Improvement Proposal (BIP) or modifying the Bitcoin Core software, which serves as the primary platform for interacting with the Bitcoin network.

There are dissenting voices, such as Michael Folkson, who is a member of the London Bitcoin Dev meetup group and believes that Bitcoin should stick to its current state.

“Consensus rules are set and the rest is left to the market,” Folkson wrote. “You may not like this use case, but assuming you embark on a game of Whac-A-Mole, what's to stop a group of people popping up in a year declaring their opposition to your use case?”

'Mass minting'

With the Ordinals protocol, it is now possible for users to imprint data onto the smallest units of Bitcoin, namely satoshis or "sats," resulting in the creation of distinctive non-fungible tokens (NFTs).

On March 8, a Twitter user named Domo leveraged the capabilities of Ordinals to embed fragments of JavaScript Object Notation (JSON) data, thereby facilitating the creation of an overwhelming number of fungible tokens, many of which have a total supply in the quadrillions, but are largely without practical value.

Sherief was prompt in noting that the tokens created by Domo were actually self-described as "worthless."

“These will be worthless. Please do not waste money mass minting,” Domo tweeted in March. CoinDesk reached out to Domo seeking comment on whether he still considers BRC-20s worthless but he is yet to respond.

More than 14,300 tokens have been minted so far, with some having a total supply of 420 quadrillion. The BRC-20 tokens' total market capitalization came close to $1 billion earlier in the week, with ORDI, a test token created by Domo solely for the purpose of demonstrating the BRC-20 minting process, leading the way. At the time of reporting, ORDI was trading at $7.90 with a market cap of $161 million, as per data from CoinGecko.

The recent surge in BRC-20 token creation prompted a number of developers, including Sherief, to classify them as spam earlier this week, leading to discussions on how to limit the chaos caused by excessive minting.

“I think everyone on this list knows what has happened to the Bitcoin mempool during the past 96 hours,” said Sherief. “Due to side projects such as BRC-20 having such a high volume.”

Bitcoin's mempool, which serves as a repository of unverified transactions, has experienced significant congestion, with the number of unconfirmed transactions nearing half a million at one point. For the majority of 2022, the number of unconfirmed transactions had remained below 50,000.

'Spam filtration'

In February, Luke Dashjr, a seasoned Bitcoin developer, devised a patch filter for Ordinals spam named Ordisrespector, which identifies Ordinals transactions and prevents them from being processed. Dashjr joined the conversation on Sherief's thread and advocated for a modification to Bitcoin Core that would eliminate such contentious transactions, which he deemed to be spam.

“Action should have been taken months ago,” Dashjr wrote on Monday. “Spam filtration has been a standard part of Bitcoin Core since day 1.”

As of now, no modifications will be implemented to the Bitcoin protocol or Bitcoin Core, which means that the token minting process will likely persist.

“Miners are making millions of dollars from these inscription transactions,” said veteran Bitcoin Core developer, Peter Todd, in response to Dashjr. “Many people like myself will continue to run nodes that do not attempt to block inscriptions.”

Source Coindesk