Future Development of Inscriptions
This chapter offers an analysis of the strengths and weaknesses of inscriptions and also provides a future outlook on the market.
Chapter Content
Through the previous chapters, we have understood the basic principles of inscription, its operations, well-known inscription protocols, inscription tools, and how to master inscription. This chapter will analyze the future prospects and advantages and disadvantages of inscription, exploring the potential of this technology.
Advantages and Disadvantages of Inscription
As a technology that realizes minting by directly writing into the blockchain, the greatest advantage of inscription is that it maintains the tamper-proof property by combining it with the blockchain. This method of “recording/issuing” is directly packaged and put on the chain, allowing anyone to view it at any time.
Next, the operation is straightforward. General inscription protocols often use intuitive data formats like JSON, which are somewhat readable by everyone. Simpler protocols can also speed up the development of peripheral tools and ecosystems, a crucial reason why the Ordinals protocol became popular quickly. Moreover, as seen in Chapter 4 and 5, with the assistance of inscription tools, users need only to fill in a few strings of characters to establish the basic inscription information, and then pay the Gas Fee to complete the process.
The last advantage is that it can “Fair Launch”, that is, fair sale. Once an inscription is deployed, everyone can view it through the blockchain. Those who want to participate can directly spend a certain amount of Gas Fee to mint it. For some meme Tokens, this is an excellent testing ground.
Let’s now discuss the disadvantages after considering the advantages. The first disadvantage is that it occupies space on the blockchain. As nodes need to store blockchain information, continual data inscribing onto the chain can burden all nodes’ operations, thus affecting Bitcoin’s main network decentralization. The popularity of some inscription projects often leads to congestion in the Bitcoin main network. Furthermore, these inscription asset protocols have limited scalability. For instance, BRC-20 only supports three operations: deployment, minting, and transfer. This makes it challenging to use as infrastructure or to build products on top of it, such as DeFi. Another significant issue is the excessive reliance on off-chain “Indexer.” Since protocol assets cannot be directly displayed on the chain, they require off-chain indexing for recognition. This can easily lead to security risks and centralization issues.
Future Outlook
First off, Bitcoin’s system, which isn’t Turing complete, lacks the fundamental technology to issue assets. As stated earlier, various solutions have been tried before Inscription, each earning some attention at their launch. Inscription followed suit, generating widespread discussion in November-December 2023. But unlike earlier colored coins, this iteration of Inscription protocols was developed alongside several other protocols, indicating a parallel advancement of technology and infrastructure. Following Inscription’s launch, wallets and transaction markets like Unisat emerged. Established applications such as Magic Eden also embraced Inscription services, enhancing accessibility and user experience. Furthermore, exchanges such as Gate, OKX, and others are offering related Inscription Token services, increasing market visibility and validating this asset type. So, while some may refer to Inscription as a “warmed-over dish,” the current market conditions and user awareness have significantly evolved from earlier periods.
Although the appearance of Inscription is understandable, the community’s attitude is not unified. Most supporters believe it can benefit the Bitcoin ecosystem. Opponents, led by Bitcoin Core developer Luke Dashjr, consider Inscription more like a type of spams on the blockchain, causing network congestion. This concern is not without reason. The basic principle of Inscription is to engrave data on the Bitcoin chain, which inevitably occupies a certain amount of block space. The question is how much it occupies.
Satoshi Nakamoto, at the inception of Bitcoin, did not specify that blocks couldn’t be used for Inscription or other uncommon transactions. Consequently, all voices in the community assert their belief in Bitcoin. Luke Dashjr suggested optimizing Bitcoin technology to prevent Inscription from causing network congestion. However, this suggestion faced resistance and was ultimately rejected.
From an ecological perspective, the trend of inscriptions has exposed more people to the BTC ecosystem, which can be seen as a significant influx of “traffic,” laying a certain user foundation for the future BTC ecosystem. Meanwhile, the emergence of Inscription assets brought significant liquidity to the BTC ecosystem. Behind this liquidity is the demand for Inscription infrastructure, as we see in various Inscription trading markets and Inscription “gold shovels”, which are all products born out of demand.
Many developers have also recognized the influence of the Bitcoin ecosystem and chosen to join it, especially in Layer 2. Following the inscriptions trend, a series of new Bitcoin Layer 2 solutions like BitVM have begun to thrive. At the same time, games like Bitcoin Cats, which issue assets leveraging the Bitcoin trend, have also emerged. This indicates that Ethereum’s ecosystem model can be replicated and adapted to Bitcoin.
In summary, Inscription technology is not without merit. It has brought new gameplay to Bitcoin. Although the vast majority of existing Inscriptions are meaningless meme Tokens, Inscription itself will continue to develop.
Conclusion
Inscription, as an emerging technology, has attracted much attention. We can see that the main application of current inscription technology is asset issuance. As the effect of wealth fades, we believe that there will be more real application scenarios for inscriptions. Also, inscriptions have opened the door to the Bitcoin ecosystem, refocusing the market’s attention on this 14-year-old blockchain, anticipating new vitality from it.
This inscription course ends here, but inscription technology continues to innovate. If you want to learn more about inscriptions, you can:
① Follow the Gate Learn Inscription Column. Here you will find professional content from Gate Learn, professional researchers, and industry practitioners. The latest developments and technical interpretations of inscriptions can be found here.
② Use Gate Web3’s inscription navigation feature, where you can see the hottest inscription protocols in the market and the trading situation of assets within each protocol.
Future Development of Inscriptions
This chapter offers an analysis of the strengths and weaknesses of inscriptions and also provides a future outlook on the market.
Chapter Content
Through the previous chapters, we have understood the basic principles of inscription, its operations, well-known inscription protocols, inscription tools, and how to master inscription. This chapter will analyze the future prospects and advantages and disadvantages of inscription, exploring the potential of this technology.
Advantages and Disadvantages of Inscription
As a technology that realizes minting by directly writing into the blockchain, the greatest advantage of inscription is that it maintains the tamper-proof property by combining it with the blockchain. This method of “recording/issuing” is directly packaged and put on the chain, allowing anyone to view it at any time.
Next, the operation is straightforward. General inscription protocols often use intuitive data formats like JSON, which are somewhat readable by everyone. Simpler protocols can also speed up the development of peripheral tools and ecosystems, a crucial reason why the Ordinals protocol became popular quickly. Moreover, as seen in Chapter 4 and 5, with the assistance of inscription tools, users need only to fill in a few strings of characters to establish the basic inscription information, and then pay the Gas Fee to complete the process.
The last advantage is that it can “Fair Launch”, that is, fair sale. Once an inscription is deployed, everyone can view it through the blockchain. Those who want to participate can directly spend a certain amount of Gas Fee to mint it. For some meme Tokens, this is an excellent testing ground.
Let’s now discuss the disadvantages after considering the advantages. The first disadvantage is that it occupies space on the blockchain. As nodes need to store blockchain information, continual data inscribing onto the chain can burden all nodes’ operations, thus affecting Bitcoin’s main network decentralization. The popularity of some inscription projects often leads to congestion in the Bitcoin main network. Furthermore, these inscription asset protocols have limited scalability. For instance, BRC-20 only supports three operations: deployment, minting, and transfer. This makes it challenging to use as infrastructure or to build products on top of it, such as DeFi. Another significant issue is the excessive reliance on off-chain “Indexer.” Since protocol assets cannot be directly displayed on the chain, they require off-chain indexing for recognition. This can easily lead to security risks and centralization issues.
Future Outlook
First off, Bitcoin’s system, which isn’t Turing complete, lacks the fundamental technology to issue assets. As stated earlier, various solutions have been tried before Inscription, each earning some attention at their launch. Inscription followed suit, generating widespread discussion in November-December 2023. But unlike earlier colored coins, this iteration of Inscription protocols was developed alongside several other protocols, indicating a parallel advancement of technology and infrastructure. Following Inscription’s launch, wallets and transaction markets like Unisat emerged. Established applications such as Magic Eden also embraced Inscription services, enhancing accessibility and user experience. Furthermore, exchanges such as Gate, OKX, and others are offering related Inscription Token services, increasing market visibility and validating this asset type. So, while some may refer to Inscription as a “warmed-over dish,” the current market conditions and user awareness have significantly evolved from earlier periods.
Although the appearance of Inscription is understandable, the community’s attitude is not unified. Most supporters believe it can benefit the Bitcoin ecosystem. Opponents, led by Bitcoin Core developer Luke Dashjr, consider Inscription more like a type of spams on the blockchain, causing network congestion. This concern is not without reason. The basic principle of Inscription is to engrave data on the Bitcoin chain, which inevitably occupies a certain amount of block space. The question is how much it occupies.
Satoshi Nakamoto, at the inception of Bitcoin, did not specify that blocks couldn’t be used for Inscription or other uncommon transactions. Consequently, all voices in the community assert their belief in Bitcoin. Luke Dashjr suggested optimizing Bitcoin technology to prevent Inscription from causing network congestion. However, this suggestion faced resistance and was ultimately rejected.
From an ecological perspective, the trend of inscriptions has exposed more people to the BTC ecosystem, which can be seen as a significant influx of “traffic,” laying a certain user foundation for the future BTC ecosystem. Meanwhile, the emergence of Inscription assets brought significant liquidity to the BTC ecosystem. Behind this liquidity is the demand for Inscription infrastructure, as we see in various Inscription trading markets and Inscription “gold shovels”, which are all products born out of demand.
Many developers have also recognized the influence of the Bitcoin ecosystem and chosen to join it, especially in Layer 2. Following the inscriptions trend, a series of new Bitcoin Layer 2 solutions like BitVM have begun to thrive. At the same time, games like Bitcoin Cats, which issue assets leveraging the Bitcoin trend, have also emerged. This indicates that Ethereum’s ecosystem model can be replicated and adapted to Bitcoin.
In summary, Inscription technology is not without merit. It has brought new gameplay to Bitcoin. Although the vast majority of existing Inscriptions are meaningless meme Tokens, Inscription itself will continue to develop.
Conclusion
Inscription, as an emerging technology, has attracted much attention. We can see that the main application of current inscription technology is asset issuance. As the effect of wealth fades, we believe that there will be more real application scenarios for inscriptions. Also, inscriptions have opened the door to the Bitcoin ecosystem, refocusing the market’s attention on this 14-year-old blockchain, anticipating new vitality from it.
This inscription course ends here, but inscription technology continues to innovate. If you want to learn more about inscriptions, you can:
① Follow the Gate Learn Inscription Column. Here you will find professional content from Gate Learn, professional researchers, and industry practitioners. The latest developments and technical interpretations of inscriptions can be found here.
② Use Gate Web3’s inscription navigation feature, where you can see the hottest inscription protocols in the market and the trading situation of assets within each protocol.