What are Inscriptions on Bitcoin?
Let's find out Inscriptions on Bitcoin meaning, definition in crypto, what are Inscriptions on Bitcoin, and all other detailed facts.
An inscription is something that is inscribed on an item, for example, a drawing inscribed on stone. When it comes to inscriptions on Bitcoin, it kind of is the same, as it refers to arbitrary content inscribed on a satoshi. It can be any type of digital content, including text, images, and so on.
Inscriptions reside on the Bitcoin network as individual digital entries, or so-called digital artifacts. They are an extension of the network because they do not require a sidechain or a creation of a new token. However, do note that the block space limitation for each satoshi places a 4 MB size limit on inscriptions.
The Ordinals protocol, a satoshi numbering system, makes it possible to employ inscriptions. It assigns a sequential number to each satoshi as it is mined and moved from transaction inputs to transaction outputs. These numbers act as satoshi identifiers.
Now, why would one wish to inscribe something on a satoshi? Well, there are many reasons. An inscription can be used to add information to a transaction, such as a note for the recipient or even the attachment of a file.
Moreover, since inscriptions on Bitcoin act as unique digital artifacts that can be collected or traded, they can also be used to create Bitcoin-based NFTs. Though, inscriptions are essentially Bitcoin transactions, which makes them more immutable and decentralized compared to traditional NFTs that require a separate infrastructure and tokens.
However, their usage doesn't end here. In March 2023, a Twitter user that goes by the name domo (@domodata) proposed a new experimental token standard that allows the creation of fungible tokens on the Bitcoin network - BRC-20. The inscription of JSON (JavaScript Object Notation) data is used to create these tokens.