BTC Renaissance: Ordinals brings innovation to life, with the launch of BitVM and BitStream

撰文:TinTinLand

In addition to high-profile ETFs, this year's Bitcoin ecosystem has ushered in new vitality and opportunities. The birth of the Ordinals protocol and the birth of the BRC20 protocol have brought a new wave of energy to the entire Bitcoin ecosystem and ushered in a surge in inscriptions. As soon as new technologies such as BitVM and BitStream came out, they attracted widespread attention in the industry and brought new hope for the vitality of the Bitcoin ecosystem.

At the same time, the BTC ecosystem is expanding rapidly. New projects from DeFi, Wallets, Marketplace, BRC20, Ordinals, Infrastructure, and other fields are constantly emerging, accelerating the expansion of BTC's ecological territory.

From the Ordinals protocol's "Jubilee" program, to the launch of the ARC20 token standard, from the rise of the BRC20 token standard, to the asset distribution of Taproot Assets, the new computation on Bitcoin by BitVM, and BitStream's decentralized file hosting incentivized by Bitcoin payments, TinTinLand has compiled the recent hot trends in the BTC ecosystem for you to take you to gain an in-depth understanding of the current state of the ecology and explore the unlimited potential of the latest technologies.

Ordinals Agreement: Revenue Increases, "Jubilee" Plan Underway

**In January of this year, the Ordinals protocol was launched by Bitcoin Core contributor Casey Rodarmor and officially launched on the Bitcoin mainnet. The protocol allows users to create Bitcoin versions of NFTs – described on the Bitcoin network as "digital artifacts" – that support content in JPEG image, PDF, video, or audio formats. Similar to many NFT projects on the Ethereum chain, these "digital artifacts" will be minted on the Bitcoin network.

At present, the income of Ordinals inscriptions is constantly increasing. According to Dune data on November 13, the cumulative fee income of the Ordinals inscription mint of the Bitcoin NFT protocol Ordinals reached 2433.5 BTC, or about $90,286,981. The total number of inscriptions currently minted reaches 40,089,490.

On November 14, Casey, founder of the Ordinals protocol, said that the Ordinals protocol is officially considering a "Jubilee" at the Bitcoin mainnet block height of 820512. That is, starting from the selected block height, the new inscription is processed so that the inscription that would have been marked "cursed" becomes the "blessing" inscription, giving them a positive number, which may mean that the cursed inscription will be out of print. The curse inscription is actually an unrecognizable inscription in earlier versions of the ord.

The Ordinals protocol continues to evolve and is gaining a lot of attention from the community. Following the Bitcoin SegWit upgrade, the Ordinals protocol enables more information to be included in a single block by separating witness data. Earlier this year, the project opened up new avenues for asset transfer by inscribed data such as images, text, audio, and more on Bitcoin's Satoshi. In October, the Ordinals protocol also underwent a major update, with the release of version v0.10.0, which added a variety of features such as batch inscriptions, adding metadata, and endpoints of inscription numbering.

ARC20: A token standard that is more in line with the spirit of Bitcoin

Ordinals isn't a perfect protocol, and three months after its launch, an anonymous developer launched the Atomicals protocol in September of this year to address its shortcomings. Its basic unit "atom" is composed of the smallest unit of Bitcoin, the sat, which means that each unit of ARC-20 token will always be supported by 1 sat, realizing 1 Token = 1 sat, more in line with the fundamentalism of Bitcoin technology.

The ARC20 token standard, provided by the Atomicals protocol, also generated a lot of community attention in September this year. The Atomicals protocol is dedicated to driving token innovation on Bitcoin's unused transaction output (UTXO). Unlike Ordinals, which were originally designed for NFTs, Atomicals has rethought the way to create centralized, immutable, and fair tokens on the Bitcoin network. ARC20 is the first protocol to inscribe Mint via PoW, and everyone can participate in mining. Through the Atomicals and ARC20 protocols, users can issue and trade their own tokens on the BTC network without relying on other blockchain platforms. This brings more features and possibilities to the Bitcoin ecosystem, making the issuance and use of tokens more flexible and convenient.

For developers, the programmability of the ARC20 makes it easier and more convenient to develop. The ARC20 standard is written in Solidity, a programming language specifically designed to write smart contracts, which provides core features such as token issuance, token transfer, token value management, and more. By using the ARC20 standard, developers can more easily create and exchange digital assets without worrying about the legal and compliance issues associated with tokens. The ARC20 standard also provides tools such as the ARC20 Standard Client, which allows developers to more easily deploy and manipulate ARC20 tokens on the Ethereum blockchain.

Compared to BRC20, Atomicals and ARC20** seamlessly integrate the token issuance and trading process with the BTC network, reducing the need for third-party sequencers**, improving the decentralization and security of the system, bringing more control to users, and more in line with the culture of the BTC community. Overall, the ARC20 standard provides a simple, secure, and globally applicable way to create and manage digital assets, which makes it a good choice for developers and token holders.

BRC20: Trading is booming, and the risk of centralization cannot be ignored

**The concept of BRC20 inscriptions is perhaps the hottest topic in the BTC ecosystem recently. **At present, the BRC20 series is the most valuable inscription asset with the highest market capitalization, and the skyrocketing price of related inscriptions has also driven the community's attention to BTC-related tracks, and many stakeholders are promoting the continued expansion of this craze.

Inspired by the Ordinals protocol to mint NFTs, developer @domodata conceived the BRC20 token standard in March this year, utilizing the ordinal inscriptions of JSON data to deploy token contracts, mint and transfer tokens, with the aim of formulating a set of JSON packets in a specific format, inscribed on the BTC chain through Ordinals and managed through an off-chain indexing platform.

After nearly a year of outbreaks, silence and renewed popularity, the top exchanges are now announcing their support for the BRC20 protocol, and many BRC20 token prices have broken through new highs, with Ordi having a market capitalization of more than $400 million and a daily trading volume of $800 million. The Brc20-swap launched by UniSat provides richer liquidity for decentralized trading of the top BRC20 tokens.

The emergence of the Ordinals and BRC20 standards was hailed by Ethereum founder Vitalik Buterin as a major advance in Bitcoin's technology and ecology, with community members arguing that it achieved a "fair start".

It cannot be ignored that there is a certain risk of centralization in BRC20, and potential problems such as network congestion and dust attacks are completely unsupported by Bitcoin fundamentalists.

The BRC20 protocol uses the inscription as a ledger that records the deployment, minting, and transfer of BRC20 tokens. Due to the inability to run smart contracts on Bitcoin, BRC20 tokens cannot be queried by running programs for information about the current token. As a result, BRC20 records the deployment, minting, and transfer operations of all BRC20 tokens by using a centralized server to retrieve Bitcoin blocks. This centralized settlement process may result in different platforms having different results for querying the token balance of a certain account. Although all operations are recorded on-chain, it is the responsibility of a client to verify them. Therefore, the entire BRC20 ecosystem also needs to further implement decentralized indexing services.

Taproot Assets: Expand the distribution and circulation of assets

**In October, Taproot Assets v0.3 was released on the mainnet alpha, laying the groundwork for the issuance of stablecoins and other assets on Bitcoin. According to Lightning Labs, on-chain functionality is supported in the current release, and support for the Lightning Network is coming soon. The Lightning Network is a two-way network of payment channels built on top of the Bitcoin blockchain to enable fast and low-cost micropayments.

**Taproot Assets is a protocol released by Lightning Labs, the development team of the Lightning Network, that enables asset logging by writing various information to UTXO scripts on the Bitcoin network. As such, Taproot Assets can be used to issue various assets such as tokens, NFTs, etc., with the aim of creating and trading various digital assets on the Bitcoin network. This protocol integrates with the Lightning Network to expand the distribution and circulation of assets. **Elizabeth Stark, CEO and co-founder of Lightning Labs, believes that Taproot Assets will help lead the "Bitcoin renaissance" and make the Lightning Network a multi-asset network, further cementing Bitcoin's position in the "Internet of Money" space.

The biggest difference from BRC20 and ARC20 is that Taproot Assets' token issuance method requires owners to pre-mint before distribution. However, users must run their own Bitcoin full nodes and Taproot Assets clients, or use third-party services, and the transaction history of tokens needs to rely on third-party indexers for storage, which has potential centralization risks.

The development team said that with the release of Taproot Assets, users will be able to send and receive their chosen currency on the Lightning Network, leveraging existing Bitcoin liquidity as a global routing currency and medium of exchange, once the protocol's payment gateway functionality is complete.

BitVM: Compute anything on Bitcoin

Bitcoin has long been a benchmark in the crypto space, but there has always been a lack of ability to execute complex, Turing-complete smart contracts, and the advent of BitVM is accelerating the solution.

In October, ZeroSync project lead Robin Linus released the BitVM: Compute Anything on Bitcoin whitepaper, in which he noted that BitVM enables Turing-complete Bitcoin contracts without changing Bitcoin's consensus rules. It can perform almost any arbitrary computation and use that computation to execute on-chain Bitcoin transactions, performing offline computations without leaving any trace on-chain.

BitVM stands for Bitcoin Virtual Machine, which incorporates Optimistic rollups, Fraud Proof, Taproot Leaf, and Bitcoin. As an intermediate layer, BitVM speeds up transactions and reduces the burden on the Bitcoin blockchain. This is very valuable for tasks that require complex calculations or smart contracts, as they can be verified externally before any permanent decisions are made. Such a setup also ensures the integrity of the blockchain while paving the way for advanced and secure operations.

In contrast to Ethereum's EVM, BitVM focuses on both parties and handles most of its tasks off-chain. This approach has minimal impact on the Bitcoin blockchain and reduces transaction fees. However, BitVM's design creates limitations in complex multi-party scenarios, but Ethereum's EVM excels in this regard.

You can view the original BitVM whitepaper here. **

BitStream: Decentralized file hosting incentivized by Bitcoin payments

In November, Robin Linus published BitStream: Decentralized File Hosting Incentives with Bitcoin Payments, proposing BitStream, a decentralized file hosting incentive protocol, that offers a sustainable alternative.

For example, a user may upload a video only once, incurring a one-time fee, but if the video becomes popular and is downloaded 100,000 times, the server's bandwidth costs may far exceed the initial upload revenue. BitStream's pay-per-download method offers a solution: it allows servers to charge for each download, ensuring that revenue scales with the popularity and demand for content, creating a balanced and profitable ecosystem. **

The whitepaper mentions that BitStream addresses the imbalance in the current hosting economy, aligning server margins with the demand for content – servers are compensated for providing a web service, i.e., file distribution. The Bitstream system leverages Bitcoin's payment channels, including the Lightning Network, Liquid, Chaumian ecash, Fedimint, or Cashu, to enable fast microtransactions on file access. In Bitstream's design, the use of Merkle trees for file validation promotes the uniqueness and security of the managed data. By breaking down the file into hashed components, the system can quickly confirm the accuracy of the transferred content.

Bitstream offers a variation of the traditional data escrow approach, proposing an incentive system for decentralized file hosting without relying on trust or complex cryptography, but its practical application remains to be seen.

You can view the original BitStream whitepaper here. **

Conclusion

The development of these new technologies has opened a new chapter for Bitcoin, which not only makes BTC transactions more efficient, but also gives the BTC ecosystem more data programmability and transaction convenience.

As the absolute leader in the crypto market, Bitcoin's market capitalization accounts for more than half of the total market capitalization of the entire crypto market. However, under the bubble, only by returning to the essence of technology and innovation can we attract more developers to try to enter the Bitcoin ecosystem, and usher in the Web3 Summer of various tracks from this "Inscription Spring".