bitcoin-dev
Purely off-chain coin colouring
Posted on: February 4, 2023 13:02 UTC
The discussion on moving inscriptions off-chain in Bitcoin has raised concerns about the scarcity and salience of blockspace.
While some argue that on-chain content is more valuable and prestigious, others believe that it reduces the efficiency and accessibility of the network.Storing high-value NFTs on-chain may create vulnerabilities and externalizing storage costs to other networks does not solve the problem. Instead, the focus should be on finding ways to move things off-chain, decreasing demand for blockspace, and making validation easier.One approach is to require proof of work or collect fees over Lightning to host an NFT. While there are some concerns about user protection and implementation difficulties, exploring the idea further could lead to a better-aligned incentive structure for the network.The writer proposes an off-chain NFT protocol that allows for easy tracking of collections and individual artworks. The proposal involves replacing the initial two transactions that link the digital artifact with the ordinal with an off-chain message achieving the same thing, without changing the way ordinals are spent.The writer suggests adding support for social legitimacy by linking all assets created by the same public key as an artist's portfolio, making it easier to go from their NFT-related pubkey to their regular nostr profile or similar. Creators who have demonstrated their quality should be able to bypass the proof of work requirement since great art is already naturally scarce.The writer also suggests adding a lightning-based patreon-type setup where content creators post content to a closed relay, and patrons pay a fee over lightning to receive events.The writer discusses the use of "inscription" as a term for the protocol, stating that it has a connotation of permanence and indelible association with a particular satoshi, which may not be appropriate for an off-chain NFT protocol. However, the writer clarifies that the digital asset includes the ordinal that controls ownership and is identified by the hash of its contents, including that ordinal's identity, making it indelibly associated with a particular satoshi.Finally, the writer explains how the off-chain approach is better aligned with incentives, with people who gain the benefit from that association paying the cost of preserving it.