Purely off-chain coin colouring

Casey Rodarmor proposed a technique called ordinals for creating non-fungible or semi-fungible tokens through bitcoin transactions. This involves tracking individual satoshis throughout their lifetime. However, the proposed BIP does not document any method for associating data or rights with an ordinal, which is addressed by the "inscriptions" in the "ord" tool. These inscriptions provide a way of including mime-encoded data in a taproot witness.The author suggests that inscriptions could entirely move off-chain, allowing all the inscription data to be entirely off-chain. The only thing that requires a transaction on-chain is transferring ownership to someone else. This approach makes it cheap to create a new NFT and doesn't impose an outsized overhead on people who aren't interested in your inscriptions. The perceived value of NFTs is due to the scarcity of the blockspace they were inscribed in, not due to the inscription itself.A tool that implements nostr ordinal assignment can track a chain of custody for an ordinal specified in a nostr event, allowing NFTs to be done unobservably. Off-chain colouring means someone can create an NFT that you don't want and assign it to a sat that's already in your wallet. However, they can do this anyway by creating the NFT first and then sending it to your wallet address. Liquid's multi-asset model may be superior to NFTs, especially for semi-fungible tokens, since it changes as the value of bitcoin changes. Overall, the possibility of coloured bitcoins is largely unavoidable and something that must be dealt with rather than something we should spend time trying to prevent/avoid.