Bitcoin Will Be Fine With Monkey JPEGs, Creator of NFT Protocol Says | Tech News

Bitcoin Will Be Fine With Monkey JPEGs, Creator of NFT Protocol Says

Some hard-core Bitcoiners are in an uproar over the prospect of ubiquitous internet memes such as pixelated cats and smoking monkeys clogging up the blockchain.

By:BLOOMBERG
| Updated on: Feb 21 2023, 09:40 IST
FILE PHOTO: A representation of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken January 8, 2021. REUTERS/Dado Ruvic//File Photo
FILE PHOTO: A representation of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken January 8, 2021. REUTERS/Dado Ruvic//File Photo (REUTERS)

Some hard-core Bitcoiners are in an uproar over the prospect of ubiquitous internet memes such as pixelated cats and smoking monkeys clogging up the blockchain.

Casey Rodarmor, the creator of the recently introduced NFT protocol called Ordinals that is at the center of the angst, says not to worry. He sees inscriptions, or the newfangled nonfungible tokens, giving the oldest blockchain a fresh use case that can boost its utility. Detractors argue they'll crowd out regular transactions with high fees due to the large amounts of data required to inscribe the digital images, GIFs and representations, undermining Bitcoin's original mission as a peer-to-peer payment network.

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Until recently, NFT collections such as Bored Apes and CryptoPunks were predominately based on Ethereum and served as a catalyst that helped to make that platform the world's most commercially important blockchain. The seven-day average number of transactions on the network has reached the highest since February 2021, according to CryptoCompare. Tens of thousands of NFT-like inscriptions have been created since the protocol's launch in late January, thought that still pales in comparison with the 1.38 million NFTs minted on Ethereum in January, according to blockchain data firm Nansen.

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The jump in activity on the Bitcoin network comes amid a dramatic 50% rally by the largest cryptocurrency since the start of the year that has renewed focus on the token after an epic price collapse in 2022.

Bitcoin and generative art have long been among Rodarmor's favorite activities. The Emeryville, California-based programmer, who runs a monthly meet-up for Bitcoin developers in the San Francisco region, has dabbled in generative visuals for live music as well as the high-end art market on Ethereum.

“I wouldn't describe myself as an artist, but I've made a lot of generative digital art, sort of like programmer art,” the 39-year-old Rodarmor said in an interview.

After several years of meandering through community college, the high-school dropout transferred to the University of California, Berkeley and graduated in 2009. He worked at Google as a software engineer for over two years and had a few stints at crypto firms before starting to work on the Ordinals project in January 2022.

Rodarmor came across Bitcoin and its explanatory “white paper” in 2013 while working at Google. “I like things that take power away from the government,” he said. “I was very excited that it had a chance working, a chance of creating better money that benefits everybody.”

Like many Bitcoin purists, Rodarmor champions the cryptocurrency as a path to financial freedom. That sentiment has led so-called maximalists to embrace the tenet that no alternatives can compete with Bitcoin as a secure permission-less network.

While the network is highly secure, it may not be as scalable as other blockchains such as Ethereum, which is also home to the largest decentralized exchanges.

“So I basically decided that I can make Ethereum NFTs, but I wouldn't feel comfortable actually telling anybody to buy them due to security problems and centralization,” Rodarmor said. “I was like all right, I guess I have to figure out a way to do NFTs on Bitcoin if I want to make some JPEGs for people to buy.”

Ordinals is shorthand for ordinal numbers, which express the position of an object. In brief, the protocol allows users to send and receive sats — the smallest measuring unit of Bitcoin recorded on the blockchain — that carry optional extra data in ordinal progression, Rodarmor explained in a podcast interview.

The Ordinals protocol wouldn't be possible without Bitcoin's previous technical upgrades such as SegWit and Taproot. They have effectively enabled large amounts of non-financial data to be stored on the blockchain.

The collection on Bitcoin so far includes a series of Bored Ape JPEGs, as well as inscriptions of Donald Trump and fallen crypto executive Sam Bankman-Fried.

Ironically, some of the first NFTs on Bitcoin are images that have been popular on Ethereum, including Ether rocks, Bored Apes, and the Nyan Cat, an animated flying cat with a pop-tart body, which was sold for nearly $600.000 in 2021.

As Bitcoin NFTs gain momentum, Rodarmor is mulling whether to build a platform where people can swap NFTs with Bitcoin directly on the blockchain – a decentralized marketplace for the inscriptions. For now, the developer and his team, including a few interns he met on Twitter, are trying to make sure there are no software bugs and people can use the code. All the Ordinal NFT trades appear to be taking place over the Discord and Telegram messaging services, Rodarmor said.

“We are going to implement trust-less offers, which allows people to swap Bitcoin for inscriptions and I think that's what people really want,” he said.

Ordinals has become a full-time job for Rodarmor, though he hasn't made a profit yet on the protocol. In the meantime, he's accepting donations. Rodarmor is also thinking about how to make it easier for those contributing to the protocol to accept donations and get paid.

“Even though we don't have official support from collections yet, people are already making the inscriptions,” he said.

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First Published Date: 21 Feb, 09:39 IST
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