{"id":53956,"date":"2023-06-21T16:25:15","date_gmt":"2023-06-21T16:25:15","guid":{"rendered":"https:\/\/egrowonline.com\/?p=53956"},"modified":"2023-06-21T16:25:15","modified_gmt":"2023-06-21T16:25:15","slug":"bitcoin-2023-in-miami-comes-to-grips-with-shitcoins-on-bitcoin-cointelegraph-magazine","status":"publish","type":"post","link":"http:\/\/egrowonline.com\/?p=53956","title":{"rendered":"Bitcoin 2023 in Miami comes to grips with \u2018shitcoins on Bitcoin\u2019 \u2013 Cointelegraph Magazine"},"content":{"rendered":"


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Among the more memorable displays at Bitcoin 2023 is a real-life toilet with the logos of various non-Bitcoin cryptocurrencies. It\u2019s an ad for a booth selling \u201cbuttwipes\u201d that are \u201cmoistened with the tears of no-coiners.\u201d The marketing message is clear: Bitcoin is the real thing \u2014 everything else is a shitcoin that belongs in the toilet.\u00a0<\/strong><\/p>\n

But only a few steps away is another booth selling trading solutions for BRC-20 tokens, which some have labeled shitcoins for Bitcoin. Across the walkway are more booths slinging NFT minting software \u2014 also on Bitcoin. The conference even hosts a Bitcoin NFT art gallery.\u00a0<\/p>\n

As Miami<\/a> hosts the largest Bitcoin conference for the third year in a row in May, the air feels markedly different. Though there are only 15,000 attendees compared to last year\u2019s 35,000, the atmosphere has an energy and freshness that\u2019s a world away from the gloom and bear-market blues that one might expect after the massive drops from the 2021 highs.<\/p>\n

\"Shitcoins\"\"Shitcoins\"
Bitcoin is the real thing \u2014 everything else belongs in the toilet (Elias Ahonen)<\/em><\/figcaption><\/figure>\n

What\u2019s changed this year is the ordinal renaissance, brought on by the recent reality of not only NFTs but tokens being issued on the Bitcoin blockchain. There are certainly haters \u2014 with some calling for a fork to undo the Taproot updates that made \u201cspam\u201d possible<\/a> on the chain.\u00a0<\/p>\n

But despite the Bitcoin community\u2019s traditional hatred for NFTs, tokens and DeFi, however, things are surprisingly quiet. Despite the blowback online, almost no one Magazine encounters at Bitcoin 2023 has anything particularly bad to say about Ordinals \u2014 and some did not even realize they are related to Bitcoin.\u00a0<\/p>\n

Among old-school Bitcoiners \u2014 in circles where the cryptocurrency that starts with \u201cE\u201d can barely be mentioned without drawing comments of derision regarding \u201cmonkey pictures\u201d and scam coins \u2014 the Ordinal NFT phenomenon is decisively met with a quiet acceptance or shrug. Most old-timers aren\u2019t interested but appear to accept that this is what the \u201cyoung people\u201d want today \u2014 that Bitcoin needs to change with the times.\u00a0<\/p>\n

Are Bitcoiners quietly accepting a new era where the network takes on a radically new role in the Web3 ecosystem, or is this the calm before the Bitcoin purist storm?\u00a0<\/p>\n

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Bitcoin Ordinals: A new era<\/strong><\/h2>\n

With the exception of the Lightning Network, which made fast and cheap Bitcoin payments possible so as to make mass payment feasible, the Bitcoin ecosystem has been relatively unchanging over the years from an outside perspective.\u00a0<\/p>\n

Mining, halvings every four years, the 21 million supply, hardware storage \u2014 beyond these core concepts, Bitcoin has lacked a certain dynamism that has placed it largely outside of the more colorful Web3 space of competing protocols, smart contracts, ICOs, NFTs, DAOs, stablecoins and myriad different tokens.<\/p>\n

Indeed, the Bitcoin community has so ardently held on to its core tenets \u2014 rejecting new iterations, interpretations and innovations \u2014 that it is unironically considered by some as a religion<\/a>, and semi-ironically as such by multitudes more.\u00a0<\/p>\n

But is a reformation \u2014 or even renaissance \u2014 in the works?\u00a0<\/p>\n

\"Bitcoin\"Bitcoin
Author Elias Ahonen at Bitcoin 2023 (Elias Ahonen)<\/em><\/figcaption><\/figure>\n

A stroll through Bitcoin 2023 \u2014 the world\u2019s largest Bitcoin conference held in May in Miami \u2014 suggests so. This is because in addition to the yearly fare of booths related to mining, physical art, exchanges, wallet solutions and various hardware, a new entrant is out in force: NFTs.<\/p>\n

Well, no \u2014 not NFTs. Bitcoiners call them \u201cOrdinals.\u201d<\/p>\n

The word \u201cordinal\u201d simply means a number used to put things in order: 5th, 6th, 7th, etc. Due to the November 2021 Taproot Bitcoin upgrade, individual satoshis, the smallest unit of Bitcoin, can now be individually numbered and thus made permanently identifiable.\u00a0<\/p>\n

Uniquely numbered satoshis \u2014 Ordinals \u2014 are nonfungible, meaning that they can no longer be substituted for another. Being (1) nonfungible and (2) tokens, they are NFTs by definition.<\/p>\n

In Miami, perhaps the most visible landmark to this new phenomenon is Ordinal Alley<\/a>, \u201cthe very first art gallery dedicated to Ordinal inscriptions\u201d where various Bitcoin NFTs can be viewed.<\/p>\n

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Subhan Syed, co-founder of YourFund Coin, tells Magazine that \u201cOrdinal art \u2014 whether a JPEG or MP3 \u2014 may seem irrelevant today, but as time goes on, collectors will look towards unique pieces that have truly been immortalized on the blockchain.\u201d\u00a0<\/p>\n

The system is new and experimental, with Syed explaining that \u201cthe way inscription works today might be completely different a few years from now,\u201d adding that it\u2019s feasible that one day, there might not be enough satoshis to fill everyone\u2019s inscribing needs.<\/p>\n

\u201cWe might need a more robust solution in the long term that does not carry a load on the blockchain timestamp.\u201d<\/p>\n

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NFTs and shitcoins \u2014 Now on BTC<\/strong><\/h2>\n

In March 2023, an anonymous developer named \u201cdomo\u201d introduced the BRC-20 system, which uses Ordinals to enable users to mint and transfer tokens on Bitcoin, in a simplistic take on Ethereum\u2019s ERC-20 standard.<\/p>\n

\"Merchants\"\"Merchants\"
There were plenty of merchants at Bitcoin 2023 (Elias Ahonen)<\/em><\/figcaption><\/figure>\n

According to BRC-20.io, at one point, the market cap exceeded $1 billion, although after the initial hype died down, the 187 tracked tokens fell to half a billion, and in the midst of the SEC-derived bear market, they\u2019re worth around $132 million with a daily volume around $47 million (although the site is offline at the time of writing).<\/p>\n

While the conference has several booths related to Ordinals \u2014 mainly services for minting or \u201cinscribing\u201d them \u2014 few openly promote BRC-20 tokens beyond offering functionality to hold or trade them. While Ordinal NFT images appear to have become accepted by the mainstream Bitcoin community, it appears that BRC-20 tokens \u2014 viewed by many as shitcoins on Bitcoin \u2014 have not yet received quite the same level of acceptance.<\/p>\n

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It will be interesting to see how this changes next year when the conference moves to Nashville.<\/p>\n

Wizards vs. laser-eyes<\/strong><\/h2>\n

At a talk titled \u201cThe Great Ordinal Debate,\u201d Bitcoin experts Udi Wertheimer and Eric Wall appeared in Taproot Wizard costumes as they made a dancing entrance. The Ordinals project celebrates the Magic Internet Money meme from the early Bitcoin days and welcomes the return of innovations being built on top of the protocol.<\/p>\n

\"Magic\"Magic
The Magic Internet Money meme<\/em><\/figcaption><\/figure>\n

Certain Bitcoin maximalists hate them and the \u201cspam\u201d of Ordinals, believing it undermines the true purpose of Bitcoin.<\/p>\n

Wertheimer reported<\/a> that \u201cfriends reached out and implored me to reconsider going to Bitcoin Miami, due to many public violent threats\u201d from \u201claser eye podcasters\u201d who believe NFTs have no place in the Bitcoin community.<\/p>\n

The rift that Ordinals has caused in the Bitcoin community may well be summed as a conflict between the wizards and the laser-eyes \u2014 the former representing the experimental and fun-loving early ethos of Bitcoin, while the latter conveys intensity, seriousness and an unyielding focus on their vision for the greatest form of money known to man.<\/p>\n

\"Eric\"Eric
Eric Wall is a professional crypto investor (Twitter)<\/em><\/figcaption><\/figure>\n

After the conference, I connect with Logan Golema, who is firmly on the wizard side and has deployed a BRC-20 token for his project Galaxer, which is building a \u201cspace-based AR capture-the-flag\u201d game to work on Apple\u2019s Vision Pro artificial reality goggles.\u00a0<\/p>\n

Believing that Bitcoin and its Ordinals will exist \u201cfor eons\u201d into humanity\u2019s future, he argues that \u201cOrdinals \u2014 whether art or money \u2014 will be important much further into the future than the deployer today may intend.\u201d<\/p>\n

\"DeLorean\"\"DeLorean\"
If you could take the DeLorean back in time to buy cheap Bitcoin \u2014 or prevent the Taproot upgrade \u2014 would you? (Elias Ahonen)<\/em><\/figcaption><\/figure>\n

While some in the laser-eyes camp have raised the possibility of a fork to roll back the Taproot upgrade that enables Ordinals, Golema thinks it\u2019s unlikely. Recalling the block-size wars that were a key driver in the Bitcoin Cash fork led by \u201cBitcoin Jesus\u201d Roger Ver<\/a>, Golema explains that while disagreement certainly exists, \u201cit would take a lot for a chain fork to happen\u201d again.\u00a0<\/p>\n

Although various ways to remove what some core developers consider \u201cspam\u201d have been discussed<\/a>, Golema believes the innovations will be broadly accepted and integrated \u2014 even if only begrudgingly because doing away with them may bring even more trouble.\u00a0<\/p>\n

\"\"\"\"<\/figure>\n

But Ordinals come with benefits, too, says Golema, helping to ensure Bitcoin\u2019s transaction fees can sustain the network after the block reward halves away to nothing in the future.<\/p>\n

\u201cWe\u2019ve seen for one of the first times that the fee reward was bigger than the block reward \u2014 that\u2019s very important for the future of Bitcoin\u2019s security.\u201d<\/p>\n

For Bitcoin miners, the new age means more BTC coming into their collective coffers because the minting, deploying and transfer of Ordinals and Bitcoin-based tokens all require paying miners fees. This could help solve the issue of what happens when there\u2019s no more BTC left to mine. \u201cDirect mining rewards will end in the year 2140, so fees will be all that\u2019s left to incentivize miners,\u201d Golema notes.\u00a0<\/p>\n

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Similar benefits may exist for BTC hodlers \u2014 the long-term Bitcoin faithful. It is easy to imagine that as Bitcoin gains Ethereum-like capabilities, it will gain market share in NFTs and tokens, which will translate to demand not only in absolute terms but relative to competitors.\u00a0<\/p>\n

Perhaps by bringing NFTs and tokens to Bitcoin, the wizards can even prevent the flippening<\/a>, the potential ascent of Etereum to the top market cap position, which until now has been theorized to happen one day as a result of Bitcoin falling behind technologically while Ethereum innovates.<\/p>\n

\"Major\"Major
Major crypto assets by percentage of total market cap. (CMC)<\/em><\/figcaption><\/figure>\n

Bitcoin dominance is a metric that shows the relative values of various cryptocurrencies and is followed by many Bitcoiners. Starting the year at 40%, BTC has climbed to 48.1% of the market as of writing. Can JPEGs push Bitcoin back into the 60% range and herald a new bull market?<\/p>\n

The Ordinals wizards<\/strong><\/h2>\n

Some Bitcoiners are starting to rationalize Ordinals into their worldviews.\u00a0<\/p>\n

According to Aravind Sathyanandham, chief strategy officer at Bitcoin DeFi platform Velar, the Ordinals community is markedly different from the primarily Ethereum \u201cape\u201d community, which has a bad reputation among the Bitcoin crowd.\u00a0<\/p>\n

\u201cThese are Bitcoin guys \u2014 these are people who had to figure out how to run an entire node to \u2018inscribe\u2019 stuff on Bitcoin, the mother chain.\u201d<\/p>\n

He is referring to a kind of do-it-yourself hardiness \u2014 a rugged individualism emblematic of the money and tech conservatism of older stereotypical Bitcoiners as opposed to the also -stereotypical imagining of a more communal, liberal and younger Ethereum community.\u00a0<\/p>\n

From this Bitcoiner perspective, Ethereum is viewed as little more than a sandbox for children, while Bitcoin is eternal. Ethereum, Sathyanandham says, is a \u201cgreat experiment for NFTs and DeFi to take their first form,\u201d and now it\u2019s Bitcoin\u2019s turn.<\/p>\n

\u201cThese Bitcoin wizards understood early on that the block space on Bitcoin is prime real estate \u2014 it\u2019s forever immutable and censorship-resistant data,\u201d he adds, not forgetting to add that Ethereum is \u201csemi-centralized.\u201d <\/p>\n

\"Bitcoin\"Bitcoin
Elias was invited to sign the Bitcoin Car, first auctioned for 1,000 BTC in 2013 (Elias Ahonen)<\/em><\/figcaption><\/figure>\n

The phenomenon also appears to be growing the Bitcoin user base.<\/p>\n

\u201cOrdinals have on-boarded so many individuals onto Bitcoin \u2014 new Bitcoin wallets like Hiro and Xverse that are akin to MetaMask have made it simple,\u201d Sathyanandham explains, referring to the wider ecosystem being built entirely for Ordinals that mirrors Ethereum\u2019s in many ways. He notes that \u201cthe Ethereum NFT community\u2019s bleeding into the Bitcoin community is very evident on Crypto Twitter.\u201d<\/p>\n

While Syed agrees with Ordinalist exceptionalism, he sees them more as technologists than strict Bitcoiners. \u201cI\u2019ve seen that BRC-20 and Ordinals early adopters are individuals who are slightly more tech-savvy digital collectible fans \u2014 it\u2019s not like some virtual flood gates opened up to bring in loads of Bitcoin maxis,\u201d he observes.<\/p>\n

Syed notes that \u201ccurrently it\u2019s the same people who collect ETH, Solana or BNB digital collectibles jumping in early. Early adopters always win and the bottom line is: We are all early.\u201d<\/p>\n

\u201cWhen the next bull run comes, perhaps correlated with the BTC halving, we might see everyone rush over the BRC-20 and Ordinal narrative.\u201d<\/p>\n

It certainly feels like magic internet money once again.<\/p>\n

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\n\t\t\t\t\t\t\t\"Elias\"Elias\n\t\t\t\t\t\t<\/div>\n
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Elias Ahonen<\/h2>\n

Elias Ahonen is a Finnish-Canadian author based in Dubai who has worked around the world operating a small blockchain consultancy after buying his first Bitcoins in 2013. His book \u2018Blockland’ (link below) tells the story of the industry. He holds an MA in International & Comparative Law whose thesis deals with NFT & metaverse regulation.<\/p>\n