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Recursive Inscriptions and the Future of Bitcoin Blockchain Technology

How do recursive inscriptions work, and what could they bring to the Bitcoin blockchain?
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Recursive Inscriptions and Bitcoin Blockchain Depicted
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By Tasmiha Khan for Trust Machines

2023 has undoubtedly marked a significant milestone in Bitcoin's relentless march towards mainstream adoption. From the introduction of groundbreaking concepts like Ordinals, Bitcoin Stamps, RGB protocol, to the emergence of token standards derived from Ordinals, the year has been a whirlwind of innovation and progress. However, as the curtains fall on these extraordinary achievements, the Bitcoin community finds itself on the precipice of an even more awe-inspiring development: the rising tide of recursive inscriptions.

While the world has been captivated by the disruptive potential of Bitcoin and its underlying technology, the story of Ordinals, it seems, is far from over. Recursive inscriptions, one of the latest fascination gripping the Bitcoin Ordinals community, are poised to revolutionize the very essence of digital currencies.

The concept of recursive inscriptions may sound enigmatic, but at its core lies a simple yet powerful principle—a chain of interconnected, self-referential information, meticulously etched into the fabric of Bitcoin's blockchain. These recursive inscriptions transcend the boundaries of mere data storage, allowing for dynamic and programmable value exchange. By leveraging the immense potential of ordinals, these inscriptions create a symphony of interdependent functionalities that could unlock unparalleled possibilities for Bitcoin and its diverse applications.

What are Ordinals and Bitcoin Ordinal Inscriptions? Inscribing Data On-Chain

Ordinals are based on a concept called Ordinal Theory, which was developed in 2023 by Casey Rodarmor. Rodarmor's Ordinals Theory assigns a unique identifier to individual satoshis, or the smallest unit of Bitcoin. These numbered satoshis can then be inscribed with arbitrary data and metadata, creating inscriptions, which are also known as digital artifacts. This data can be in almost any format and is inscribed directly on the Bitcoin blockchain. This identifier can be used to store data on the blockchain.

Inscriptions are stored in the witness field of a Bitcoin transaction. This section owes its existence to the Segregated Witness (SegWit) soft fork, implemented in 2017, which restructured Bitcoin transactions by separating them into transaction and witness components. This innovative approach was aimed at optimizing data storage efficiency. Building upon the SegWit upgrade, Taproot, another significant Bitcoin soft fork, was launched in November 2021 which further improved the data storage capacity for inscriptions to a maximum current 4MB limit. This means that inscriptions can be used to store up to 4MB of data on the Bitcoin blockchain without taking up too much space, which is a major breakthrough. 

Ordinals quickly gained popularity in the Bitcoin community, as they have been used to create a variety of applications, including NFTs, smart contracts, and decentralized applications. This has resulted in a renewed excitement around Bitcoin NFTs. With ordinals, Bitcoin can emerge to become more than just digital gold—it has the potential to become a canvas for innovation and self-expression. The integration of data directly onto the blockchain opened doors to the creation of unique digital assets, bringing the world of art, collectibles, and intellectual property into the realm of decentralized finance.

By leveraging the power of Ordinals, artists and creators gained the ability to authenticate and tokenize their works on the immutable Bitcoin blockchain. The scarcity and provenance offered by Bitcoin NFTs captivated both creators and collectors, injecting a renewed sense of excitement and potential into the digital art market.

However, there was still a problem: as you can imagine, inscribing data directly onto the blockchain takes up a LOT of space, and Bitcoin is still limited to 4MB despite the upgrades. How do we fix this problem?

An Emerging Solution: How Recursive Inscriptions Work

Recursive inscriptions are a new feature of the Bitcoin blockchain that allow for the creation of complex data structures that can be stored on the blockchain. They work by creating a chain of inscriptions, each of which references data from existing inscriptions that were previously created. This allows for the creation of data structures that can be arbitrarily large, as each inscription can point to another inscription, and so on. In short, a recursive inscription calls data from prior inscriptions and takes that data to incorporate into new inscriptions, which allows users to surpass the 4MB limit on each inscription. 

This ultimately allows developers to run on-chain software that calls to those packages of recursions. Many have also determined that as a result, recursive inscriptions represent another step towards interoperability on the Bitcoin network, and more complex use cases of Ordinals that aren't limited to minting a Bitcoin NFT.

For example, you could create a recursive inscription that contains a video game (there has been much discussion about recursive Ordinals giving video games on Bitcoin a boost). The inscription could call data from other inscriptions to store the game's graphics, music, and code. This would allow you to store a large and complex game on the Bitcoin blockchain, without having to worry about the 4MB block size limit.

Another innovative example demonstrating this technology is of a recursive inscription that stores a high-resolution image. The first inscription would store the header of the image, and the second inscription would store the first row of pixels. The third inscription would store the second row of pixels, and so on. This way, you could store the entire image on the blockchain, even if it is larger than 4MB.

The Impact of Recursive Inscriptions So Far

Unsurprisingly, various applications already support recursive inscriptions, and a good number of projects within Bitcoin ecosystems have emerged that make use of the technology. In fact, Trust Machines' social media manager, Brandon Marshall, created a template that was widely shared within the Bitcoin community to help users inscribe their own single page HTML website with recursive inscriptions. 

One of the most notable projects using recursive inscriptions is OnChain Monkey. OnChain Monkey is a popular NFT project that has created a new NFT collection using recursive inscriptions. The collection, called "OCM Dimensions," consists of 300 3D animated Bitcoin Ordinals that were created using recursions.

Bitcoin enthusiasts experimenting with recursive inscriptions have also commented on its potential to reduce transaction fees and create new types of software. One way that is being discussed is that recursive inscriptions can mitigate transaction fees by reducing the amount of data that inscribers need to add to each satoshi. This is because inscribors can utilize previously stored data and only add new data. This can significantly increase storage efficiency, as there is no need to store duplicate copies of files.

Recursive inscriptions have also been proposed as a way to improve smart contract functionality on Bitcoin. Smart contracts are a type of software that can be used to automate transactions on the blockchain. However, smart contract functionality on Bitcoin has been limited (though still possible). The integration of recursive inscriptions and Ordinals holds the potential to facilitate smart contract-like functionalities and other permissionless contracts on the Bitcoin blockchain, opening doors to a range of complex software use cases. 

Recursive inscriptions can also create new types of software by allowing users to call already-existing repositories of inscriptions that already have complex code or data. 

Criticisms of Recursive Inscriptions

Just like Ordinals, the Bitcoin community has embraced recursive inscriptions. However, it is essential to acknowledge and address some of the critiques surrounding recursive inscriptions, including potential flaws within the Ordinals protocol. 

One concern is that they could be used to create "cursed inscriptions". Cursed inscriptions refers to itself in a loop thereby making it impossible to redeem the inscription, as there would be no way to break the loop. Cursed inscriptions can also contain malicious code that could be used to steal funds or damage the Bitcoin blockchain. However, it is important to note that cursed inscriptions can also be created using Ordinals, so this is not a new problem. Additionally, the community has also seemingly embraced cursed inscriptions to a certain extent. OnChain Monkey's "Dimensions" collection, for example, is both a recursive and cursed inscriptions collection, and was well-received by the Ordinals community.

Yet another concern is that recursive inscriptions could be used to create spam or other malicious content on the blockchain. However, the potential benefits of this technology greatly outweighs the potential risks that come with it.  

The Potential of Recursive Inscriptions 

Recursive inscriptions mark another milestone in the Ordinals story, further propelling innovation in the Bitcoin ecosystem. While recursive inscriptions are still in their early stages and face challenges such as limited development and testing, their emergence signifies an exciting chapter in the evolution of Bitcoin. With their ability to overcome storage limitations and unlock new possibilities for NFTs and smart contracts, recursive inscriptions are set to shape the future of Bitcoin. 

Their potential to revolutionize the usage of Bitcoin, particularly through the creation of more complex applications and increased accessibility for mainstream users, cannot be understated. Stay tuned to witness the exciting developments that lie ahead.

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