Is Inscription a Bug or a Feature?
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Is Inscription a Bug or a Feature?
Accepting a system as decentralized means accepting that it will evolve things you may not like, and also accepting all the failed attempts during its evolutionary process.
Navigating Web3 tides with focused insightsAuthor: jolestar
A tweet by Bitcoin developer @LukeDashjr calling for banning Inscriptions has sparked heated debate. His main argument is that inscriptions are a bug that could threaten the security of the Bitcoin network.
The debate over whether something is a bug or a feature carries profound implications. If it's a bug, then fixing it results in a version that remains in the legitimate lineage of Bitcoin. But if it's a feature, removing it would constitute a fork. Therefore, this topic deserves deeper examination.
However, there is no objective standard to determine whether something is a bug or a feature—the key lies in whether it harms or benefits the software system. We will analyze this issue from two perspectives:
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Do inscriptions affect the security of the Bitcoin network?
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Do inscriptions bring benefits to the Bitcoin ecosystem?
Do Inscriptions Really Affect Bitcoin Network Security?
How to measure blockchain network security has always been a controversial topic. One frequently cited metric is the number of block-producing nodes (miners or validators). By this measure, Proof-of-Work (PoW) systems are often seen as disadvantaged and criticized by advocates of Proof-of-Stake (PoS). Remember those articles where EOS mocked BTC’s decentralization and security with its 21-node setup?
Bitcoin developers, however, often use another metric: the number of full nodes. To ensure individuals can run full nodes on personal computers, strict limits are placed on block size and the UTXO set, reducing the cost of running a node. But how many full nodes are enough? And to what extent do inscriptions impact the number of Bitcoin full nodes? In fact, current statistics suggest that due to the popularity of inscriptions, more people are interacting with Bitcoin RPCs, thereby increasing the number of full nodes.
From the perspective of full node count alone, we cannot claim that inscriptions harm Bitcoin network security.
Let’s take it further—do full nodes really guarantee Bitcoin’s security? Without incentives, why would users voluntarily run full nodes? Would Bitcoin become more secure if I personally deployed tens of thousands of nodes? In reality, what we truly need are not the nodes themselves, but the people and organizations behind them.
Blockchain is a public ledger: the more people who care about its accuracy, the more secure it becomes. Why do users care about this ledger? Because it records things tied to their interests—whether BTC or other assets—as long as they perceive value, they will care about the ledger.
And caring about the ledger doesn’t require every user to run a full node. Any direct interaction with the Bitcoin network contributes to security. For example, using an on-chain wallet or checking transactions directly provides stronger security guarantees than keeping Bitcoin on an exchange or custodial wallet.
What we observe today is clear: the inscription trend has significantly increased direct user connections to the Bitcoin network (e.g., browser wallets), fostered early-stage DApp ecosystems (websites listing inscriptions and enabling PSBT-based transactions), and driven more users to care about what’s recorded on the ledger (as evidenced by the proliferation and traffic of blockchain explorers).
Therefore, even from a security standpoint, inscriptions have enhanced Bitcoin network security.
Technical Value of Inscriptions and Derived Protocols to the Bitcoin Ecosystem
At first glance, inscriptions may seem technically simplistic—just crudely writing data onto the Bitcoin network, relying heavily on a centralized indexer.
But we can interpret them as a form of Sovereign Rollup that treats Bitcoin as a data availability (DA) layer. In this model, clients write directly to the DA layer—a "DA-first" approach—while the indexer acts like the execution layer in modular blockchains, effectively making it a Layer 2 (L2) for Bitcoin.
This model clearly has drawbacks: no sequencer to batch transactions, resulting in poor user experience and high fees; no fraud proofs, raising security concerns. Had a team proposed such a design, few investors would back it. Yet the beauty of markets lies in users making it work anyway. Recently, discrepancies in BRC20 balances across exchanges were resolved through social consensus via Twitter discussions—an outcome proving its viability.
Yet this model has advantages: it follows a protocol-first approach. Public protocols and data formats are defined upfront, with only essential data stored on-chain. Execution and validation happen off-chain. Any team can build an indexer to join this L2 execution network, and all share the same DA layer. In contrast, Ethereum’s L2 solutions each carve out isolated spaces on the L1’s DA layer, competing for space without sharing data.
To illustrate with an analogy: if the L1 is an old king, the L2s are his princes:
Ethereum King: Fight for space and users within my domain. Whoever grabs it keeps the MEV and gas revenue.
Bitcoin King: The land is mine, the users are mine, the transaction fees are mine—but the data is shared. Let’s see which of you can开拓 new territories and attract users to your realms.
This creates entirely different competitive dynamics. Since L1 space is inherently limited, true scaling only occurs when L2s create new, trusted spaces for users.
Thus, inscriptions represent a discovery of Bitcoin’s value as a data availability layer. Combined with the indexer model, they demonstrate a novel way to build L2s—one of great significance to the Bitcoin ecosystem. They are a feature, not a bug.
Possible Solutions
Of course, the concern raised by Bitcoin developers about UTXO set bloat is valid. But it’s not unsolvable. Since inscription protocols rely on off-chain consensus, numerous solutions are possible as long as indexers and the community reach agreement. Here are a few quick ideas:
1. Replace inscription content with hashes. Currently, inscriptions include media files, JSON, etc., taking up significant space. Once indexers mature, only the hash needs to be written to L1, while original content is stored in indexers or users’ wallets.
2. Design a protocol enabling migration of inscriptions between on-chain and off-chain states. When moved off-chain, the inscription is effectively destroyed on L1, consuming the UTXO. To bring it back on-chain, users provide aggregated signatures of the off-chain transfer, allowing verification across indexers.
Another option is adopting a sparse Merkle tree verification method similar to Taproot for on-off chain transitions. I previously designed such a scheme for Ethereum NFTs, but unfortunately, Ethereum NFTs are defined via interfaces rather than data objects, limiting its applicability. This model, however, fits inscriptions perfectly. Interested readers can check the link.
I won’t list more solutions here. My point is that technology is an ecosystem—it evolves through user usage and feedback. Many innovations aren’t designed at desks but emerge from random experiments colliding with user responses.
To quote my article “Language is a Decentralized System”: Accepting that a system is decentralized means accepting that it will evolve things you dislike, and embracing its messy process of failed attempts.
Conflict of Interest Statement
Personally, apart from experimenting with minting BRC20 tokens in May, I don’t hold any assets from emerging protocols on Bitcoin. My analysis focuses solely on their technical potential and impact on the Bitcoin ecosystem.
This article is not investment advice. Long-term thinkers don’t need FOMO—this is just the beginning. Most assets issued by these protocols currently fall into the meme coin category. Whether meme coins can evolve from finite games into sustainable, long-term systems depends on several factors:
1. Will early holders who profited choose to continuously invest in the ecosystem, building real-world applications for these assets—similar to how early Bitcoin holders funded infrastructure? If they cash out and leave, it’ll remain just a meme game.
2. Can infrastructure providers create the necessary space and use cases? This depends both on the capabilities of Bitcoin L2 and related infrastructure, and on the attitudes of the broader Bitcoin community—including core developers.
The future is uncertain, but participants can make it more predictable—that’s the essence of entrepreneurship. @RoochNetwork will explore ways to provide application scenarios for derivative protocols on Bitcoin.
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@jolestar
