NFTss (non-fungible tokens) have really burst into the media space in recent years and their arrival on the Bitcoin blockchain is not without noise. Every time we talk about NFT’swe obviously think mainly of blockchain networks EthereumSolana or different Layer 2. However, NFTs are taking shape on the Bitcoin blockchain and this is not without consequences.
NFTs on the Bitcoin Blockchain and OP_RETURN
The appearance ofassets digital on the bitcoin blockchain is an ongoing goal, but some of bitcoin’s biggest advocates don’t like the idea. Digital collectibles using the Bitcoin blockchain have been around since 2014, and several projects have made it their lifelong mission to bring NFTs to the king blockchain.
OP_RETURN is a feature of the script method of the blockchain Bitcoin which allows small amounts of data to be included in a transaction. This feature has often been used to the creation of NFTs on the Bitcoin blockchain by storing metadata and a unique identifier for the NFT in the data field OP_RETURN. Strong advocates of the use of OP_RETURN for the NFT on the network Bitcoin already demonstrated the following advantages at the time:
- Decentralization : The NFT’s created on the Bitcoin network using OP_RETURN are stored on a decentralized, tamper-proof ledger
- Security : Transactions on the Bitcoin network are secured by the mechanism of consensus proof-of-work, offering a high level of security for NFTs
- Interoperability : NFTs created on the Bitcoin network using OP_RETURN can be easily transferred between different platforms and applications
This solution allowed, among other things, the creation of RarePepe or of Omni for the first version of USDT, before it was considered obsolete, where newer protocols seemed far more useful.
It is finally the Tapscript proposal (of Taproot) which will allow, years later, the creation of a new project on Bitcoin, with Ordinals.
Ordinals a Bitcoin exploit turned NFT project
The project NFT Ordinalsfor example, has only been live on the Bitcoin mainnet for a few days, and has already been used to mint dozens of NFTs on the blockchain, not just jpegs: pdfs, videos, audio files and more.
The NFT project comes to life in reality through taproot latest update exploitallowing each Ordinals transaction to potentially fully fill a bitcoin block (4 MB), greatly exceeding the limit imposed by OP_RETURN.
This therefore worries many members of the bitcoin communitywho see through this exploit, the possibility that transactions Ordinals leave no room for any other transaction on the network.
Obviously, this operation is not optimal for the creation of NFT collections as we usually know them. However, the security and the decentralization of the bitcoin network are attracting more and more NFT enthusiasts.
Despite widespread belief, existing NFTs in the ecosystem today are often not truly on-chain. They more simply represent a pointer, redirecting to a file (often an image) hosted elsewhere. Ownership of NFTs is linked to a blockchain, but the file it refers to is on another server, which often raises a question as to the real decentralization of NFTs. On the other side of the spectrum, the On-chain NFTs can be very problematic. Indeed, when they are directly integrated into the blockchain, each node in the network will download the data. And like the On-chain NFTs should be stored on each full node forever, the data download will repeat for each NFT.
“This use of block space is probably the least impactful compared to the other things you can do“, Explain rodarmorthe creator of the project Ordinals “The nodes download this data, but then they ignore it“. Indeed, these transactions are specific: they must be downloaded by the nodes, but they no longer need to be kept in memory.
Finally, the debate on the legitimacy of NFTs on Bitcoin goes back to a much deeper debate concerning the very principle of Bitcoin. 2 camps clash here: is Bitcoin a tool against censorship, a store of value or a peer-to-peer digital payment method…
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