Ordinal Inscription Size Limits

The ongoing debate about on-chain capacity in the blockchain world is often seen as a distraction from more pressing technological developments. The primary focus should be shifted toward creating a robust framework for layer two solutions, which are crucial for scaling and enhancing transaction capabilities without relying on the limited capacity of the underlying blockchain. This shift necessitates the implementation of specific operational codes that would enable the development of a trustless and decentralized network. Such a network would allow transactions to occur off the main blockchain, thereby reducing congestion and fees.

A promising approach to achieve this involves leveraging covenant technology. Covenants offer a way to share Unspent Transaction Outputs (UTXOs) revocably, setting up a system where participants have a financial incentive to act honestly and efficiently. This mechanism ensures that coordinators, who facilitate these layer two transactions, remain compliant with the network's rules due to the economic rewards and penalties built into the protocol. By adopting covenants, it's possible to scale the blockchain to a global level while avoiding the pitfalls of custodial services, wherein users must trust third parties with their funds. The ultimate goal is to establish a scalable, non-custodial network that can handle the increasing demand for blockchain transactions worldwide.