Bitcoin prices are now trading above $30,000 for the first time in over eight months. The rally coincides with the of an indexing bug in Ordinals protocol, a platform where users can mint non-fungible tokens (NFTs) on Bitcoin.
The 1,200 Orphaned Inscriptions On Ordinals Protocol
The bug in the Ordinals protocol was discovered to have led to approximately 1,200 inscriptions that were supposed to be included in Bitcoin being excluded though they were all valid. These “orphaned” inscriptions were because the indexing flaw only caused the protocol to pick out inscriptions in the first transaction input.
Compared to smart contracting platforms, especially Ethereum, which is dominant, NFT enthusiasts say storing files on Bitcoin is relatively cheaper. Ordinals protocol was launched after the activation of the Taproot upgrade on Bitcoin. Ordinals allow users to activate a smart contract code on transactions enabling them to embed an inscription on each Satoshi.
Users can freely create on the Ordinals protocol and input them on each Satoshi, the smallest unit of Bitcoin. Since each “inscription” is unique, they can act as NFTs. Unlike in Ethereum, where files are stored in a server and where block space demand is also high, creating inscriptions on Bitcoin save resources.
Ordinal protocol proponents also say this option offers efficient storage means with better authenticity. However, users who use them won’t benefit from creator royalties like they would have done in Ethereum and other alternatives. Ordinarily, the option for creator royalties on NFTs minted on Ethereum offers artists a way of generating passive income on subsequent sales.
With the bug now revealed, the Ordinals protocol community has forwarded two proposals to address the issue of orphaned inscriptions and the resulting numbering error.
A bug was found in the ordinals protocol that caused ~1,200 inscriptions that should have been valid to not get included. The first of these "orphan" inscriptions happened just before inscription number 420,285. The bug was caused by the ordinals protocol only counting… — Leonidas (@LeonidasNFT)
One option is proactively changing inscription numbers by picking “a block height to upgrade the ordinals protocol that will retroactively index/include the approximately 1,200 orphan inscriptions.”
The second option is not to change the inscription numbers. Instead, developers will pick a block height to upgrade the ordinals protocol while changing the indexing rules. In this rule change, the protocol will automatically assign an inscription number to those not included in the first input of a transaction. Should this be done, the orphaned inscriptions will be viewed as “misprints.”
Related Reading: NFT Industry Hit Hard In March With 31% Decline In Revenue – Here’s Why
Bitcoin Rallying
As the Ordinals protocol discusses the way forward, Bitcoin prices are looking better. Earlier today, prices broke above $30,000 and BTC is trading above Q1 2023 highs, printing a new 2023 high.
From the candlestick arrangement, the current rally continues the trend from December 2022.