Coins in Physical form
The world has a long history of minting coins. To exactly point out when it started is hard, but history tells that it happened in Lydia with dates ranging from 700-550 BC.
The idea of doing monetary transactions with coins was a huge move from silver rings and before that bartering.
These coins depicted the heads of gods and goddesses on the front side (observe), while the back side (reverse) showed animals, natural resources, symbols and references to historical events.
A big change happened under Julius Ceasar in 44 BC, when he started minting coins with his own portrait on the front side of the coin and his accomplishments or aspirations on the back side – figures and text is seen on the coins.
Since then, profile portraits with rulers, heroes and members of royal families been normal throughout the world.
The process of minting these coins were not easy, and engravers carved the small portraits into bronze dies, with one for the front and another for the back. The coins were then struck, one by one in a process similar to the one seen today.
The medium was often gold, silver or copper. Today some people with interest in numismatics put a big effort in collecting these often very expensive coins because of their history.
Bitcoin was born
Including metadata onto BTC (Bitcoin transactions) is not a new idea and was probably inspired by Hal Finney´s “Crypto trading cards” post back in 1993.
As you´ve probably now – Satoshi Nakamoto in 2008 proposed the Bitcoin whitepaper. He focused on the main problem to solve, namely making a decentralized peer-to-peer electronic cash system using the Proof of Work based Nakamoto consensus. In 2009 the protocol was ready, and Satoshi Nakamoto started minting the new sound currency with the help of computers and electricity.
Text messages have been embedded into blocks on the Bitcoin protocol, like the first message from Satoshi Nakamoto in 2009 – “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” via coinbase data.
Text messages and metadata onto BTC
Like Satoshi did back in 2009 many have put text messages (“hidden messages”) onto BTC.
A nice paper from 2017, described the different methods to insert data into the Bitcoin blockchain, remember it´s 6 years old. The standards scripts described includes Pay-to-Public-Key (P2PK), Pay-to-Public-Key-Hash (P2PKH), Multi-Signature, Pay-to-ScriptHash (P2SH), and OP_RETURN.
It´s also possible to insert data via coinbase (like Satoshi Nakamoto did), P2FKH, P2FK, P2FMS.
It´s possible to do in different ways, one is to write it via Bitcoin Core and convert a text message into a hex format. A guide can be seen here. Or use Electrum (A BTC wallet). Actually, a service was provided by Eternitywall, so it was easier for people to do.
Another site called Bitcoinstrings have specialized in finding these text messages.
Another site built by Przemysław Rodwald has also looked into these messages, see the picture below.
A paper on OP_RETURN meta data was released in 2017.
Here are some famous “hidden” messages:
Uncover more metadata here.
Other forms of metadata onto BTC transactions
In 2012, colored coins (layer 1 protocol) introduced the idea of digital assets on Bitcoin. The first working Colored Coin protocol was released in 2013. In 2014 OP_RETURN changed and changed the structure of how many used colored coins.
In 2012 the idea of Mastercoin (layer 2 protocol with native token) was born (first ICO – 2013) which allowed the creation, buying and selling of digital assets (USDT) powered by the MSC token (later Omni).
In 2014 Counterparty (layer 2 protocol with native token) allowed the creation, buying and selling of digital assets and NFTs powered by the XCP token. Here the first gaming NFTs with SoG and FDCARD (2015) were issued and later the Rare Pepe (2016).
Blockstream (Layer 2 – Sidechain) have implemented NFTs (Raretoshi and AMP assets on Liquid Network).
Rootstock (layer 2 – Sidechain + native token) have implemented NFTs.
Stacks (layer 2 protocol with native token) have implemented NFTs.
It´s worth mentioning that Lightning Network the great Layer 2 protocol running on Bitcoin, is also coming with solutions for making digital assets on Bitcoin. Keep an eye on Taro and RGB, where you also are able to mint NFTs.
Another solution is Drivechain and their sidechains solutions. The BIP 300/301 is super interesting.
It´s worth noting that metadata is not only about NFTs, but all kinds of scripts and not only “Lenna” images. Another “fun” thing is that you actually can play Doom on Bitcoin now. You can use Bisq (decentralized exchange) build upon the tech of colored coins and much more.
Metadata on other chains than BTC
The first ever “NFT” was minted on Namecoin a fork of Bitcoin (aka first altcoin) back in 2011. This was a domain (d/bitcoin.bit) released on 2011-04-21. Later Punnycodes, ASCII Art and many other NFTs were issued on Namecoin.
Some consider the first “NFT Art” to be the piece called Quantum (2014).
Later on, other blockchains like the altcoins: Ethereum, BNB, Cardano etc. have implemented NFTs.
NB: These altcoins have nothing to do with metadata on BTC.
Ordinals and inscriptions on Satoshis
Inscriptions on the “Magic Cable/Radio wave money” have become real because of the introduction of the Segregated Witness in 2017 and Taproot implementation in November 2021, which made it possible to make Ordinals (Layer 1 protocol) in January 2023.
Casey Rodarmor did the first inscription, using Ordinals (Off chain by purpose-built external indexer), via a sat (satoshi, aka smallest unit of Bitcoin) showing a black and white skull back in 2022.
The timestamp can be seen here: 2022-12-14 20:32:00 UTC
A few days later second inscription happened with Inscription 1.
Inscriptions was released to the Bitcoin mainnet (to the public) on January 21, 2023 – 36 days after the first inscription.
Today (2023-05-16) everybody is able to inscribe their own picture/digital content on a Satoshi and already +7,200,000 inscriptions have been released. Note you can only inscribe with the need of an external indexer, read more here.
Only the future can tell which kinds of art of with accomplishments and/or aspirations will be inscribed on sats via Ordinals.
Right now, you can inscribe via Ordinals: Images, GIFs, Text, Videos, Audio, HTML, SVGs and 3D.
A new token standard called BRC-20 has launched (2023-03-08). This experimental fungible token leverage JSON data in the form of Ordinal inscriptions.
The future of NFTs and metadata on the Bitcoin protocol
Like Julius Ceasar started to place his head on coins people can now do it on satoshis, but it comes at a cost. The block size in the Bitcoin protocol is limited to 4 megabyte and the Bitcoin protocol can get clogged if everybody starts minting their pictures etc., directly on the Bitcoin protocol.
So, the Ordinals protocol might become a problem, since the pieces of data takes space and make the most important transactions namely the financial transactions, have to wait to become processed.
On the date 2023-04-22 a block (786,501) was made containing 3,978,938 bytes.
Another problem is that your inscriptions can get purged in the mempool if the fee is set to low. Normally you would get your money back if a financial transaction get purged in the mempool or you would be able to use RBF or CPFP. So ordinals wallets need to implement this feature.
It´s hard to tell what idea is the best to handle this problem, which might become bigger, but I am sure that the people in the Bitcoin space have a wise understanding heart to judge between the good and the bad!
Satoshi Nakamoto proposed a decentralized peer-to-peer electronic cash system and this is still very, very important in a world with increasing piles of debt and political interest in money creation.
A sound monetary system is here with Bitcoin!
Long live humanity and remember to level up for survival!
You could try to buy an Inscription here:
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