Anthony Towns, one of the programmers who helped create Taproot, presented a proposal that could lighten the load that NFT Ordinals generate on the Bitcoin network through the Nostr protocol. The NFT Ordinals are becoming more popular in Bitcoin, the mempool of this network has been congested for several days and this affects its users. First of all, the process of paying with bitcoin (BTC) is slowed down by the number of transactions waiting. This causes the average fee to send BTC to go up, since transactions that pay a very low fee can take days to be verified. Another problem caused by NFT Ordinals that Bitcoin users complain about is the speed up increase in the weight of the chain of blocks. The reason for this is that these non-fungible tokens being added to the network can make a block of transactions more than double the weight of a standard one. The heaviest block in Bitcoin history with 4 MB was recently mined. This contained an NFT that occupied more than 99% of the space of said block. The experiment was done premeditated by members of the bitcoiner community in conjunction with the Luxor mining pool. Each of the Bitcoin nodes must keep a copy of the blockchain, which is basically a ledger that records all transactions on this network. Therefore, if this book becomes heavier, nodes will be forced to spend more on hardware to store such information. It should be noted that the nodes of this network do not receive incentives for this work, unless they are mining nodes.
Nostr: The Alternative to Bitcoin Ordinal NFTs
Nostr is an open source protocol that allows the exchange of encrypted messages that does not use identity verifications (KYC). CriptoNoticias has previously presented applications such as Damus, which use the Nostr protocol, and are considered the most advanced competitors of social networks such as Twitter. Towns’ proposal for using Nostr as a solution for NFT Ordinals is to keep entries (names given to NFTs and files saved using Ordinals) outside of the Bitcoin ledger. In this case, the mainnet would only be used to verify who is the current owner of the token in question.
Implementing that is pretty straightforward: you just need a protocol to create an off-chain asset and associate it with an Ordinal – absolutely nothing needs to be done on-chain. That is, you can do something as simple as post a simple message with Nostr. Anthony Towns, Bitcoin developer.
This is an example of the message, in lines of code, that would allow you to verify ownership of an enrollment using Ordinals in Bitcoin with Nostr. Source: Anthony Towns / linuxfoundation.org
Coloring coins in Bitcoin is once again a topic of conversation
On the Bitcoin developer mailing list, the email thread related to Towns’ proposal is titled “Purely off-chain coin coloring.” A colored coin, in the context of cryptocurrencies, is basically a token that is marked by a naming system. This mark allows to identify the currency and is usually related to the ownership of a digital or real asset. Coloring coins is not something new in Bitcoin. In fact, there is a document on this protocol published in 2012 by Yoni Assia, founder and CEO of the eToro platform. However, after having lost its momentum over the years, this term is now being used again thanks to the Bitcoin NFT Ordinals. The NFT Ordinals protocol also uses colored coins, since the ownership of these tokens stored in the Bitcoin blockchain corresponds to whoever has a certain satoshi in their possession. However, Towns’ proposal offers several advantages over the familiar Ordinals from developer Casey Rodarmor. According to Towns, creating non-fungible tokens with your method would be cheaper, since there are no commissions to pay for data that would be stored outside the Bitcoin network. In addition, it is not necessary to make a new transaction to create the NFT Ordinal, since the data can be associated to an already existing UTXO (a transaction that has not been spent). Privacy is also favored, thanks to the fact that the exchange of a colored coin does not imply revealing what the data it contains refers to. In addition to this, if the relationship between the data or the NFT with the colored coin is not very public, a transaction of colored coins can be as robust as any standard Bitcoin payment. Anthony Towns said that “colored bitcoins are largely unavoidable and something to simply deal with, rather than spend time trying to prevent/avoid them.” To this he added that the calculation of commissions based on the weight of a transaction and not the value transferred helps miners’ incentives not be negatively affected.
Responses to Towns’ proposal from other developers
On the Bitcoin developers mailing list there were reactions from several of its members. Aymeric Vitte alludes to a couple of important details, Towns did not specify the off-chain NFT protection mechanism or a security method that prevents the theft of these tokens or their indefinite issuance (mint), for example. Vitte also took the opportunity to restate a proposal of his on a system for the exchange of non-fungible tokens using Bitcoin. According to him, it does have a security system against possible theft, as well as emissions and multiple sales of the same NFT. Rijndael was one of the few who supported Towns’ proposal, comparing it to protocols such as RBG and Taro, which he believes use similar principles for data backup and verification. However, responses by Alicexbt, Peter Todd and the very creator of NFT Ordinals, Casey Rodarmor, recalled that what they and many users of this protocol consider valuable is that NFTs or registrations are stored on the Bitcoin blockchain.