Adam Back, a prominent figure in the Bitcoin space and co-founder and CEO of Blockstream, recently weighed in on the heated debate in the Bitcoin community surrounding "JPEG spam," expressing his opposition. He believes the phenomenon deviates significantly from the core mission of cryptocurrency as a currency. The controversy continued to simmer in a discussion thread on the X platform (formerly Twitter) on Friday.
Back emphasized that Bitcoin should be "the common wealth of all mankind," that developers should play the role of "stewards" in the network's development, and that any substantive changes to the network must be based on user consensus. This principle was fully demonstrated during the block size dispute of 2015-2017: at that time, users successfully prevented the unilateral protocol change pushed by miners by exerting economic pressure, thus defending the importance of community consensus.
Back's criticism targets the JPEG inscriptions used to store images directly on the Bitcoin blockchain via the Taproot upgrade, and the Ordinals protocol that facilitates this. The Ordinals protocol uniquely numbers and assigns a number to each satoshi (the smallest unit of Bitcoin) on the Bitcoin blockchain, enabling the creation and trading of NFT-like assets on the Bitcoin network. The Taproot upgrade provides more efficient technical support for the storage and trading of these inscriptions.
Data shows that the number of JPEG images embedded in the Bitcoin ledger has grown rapidly, soaring from 88 million in May to 105 million in September, a 20% increase. Transaction fees associated with these images totaled approximately 7,000 BTC, equivalent to approximately $777 million at current market prices.
The two sides differ significantly in their understanding of Bitcoin Core's mission. Supporters of the Taproot upgrade, such as Ordinals, believe that as long as users are willing to pay for block space, such usage is an efficient use of network resources. They emphasize that Bitcoin, as a permissionless, decentralized system, should not be restricted to specific uses, and that any form of usage restriction is contrary to Bitcoin's decentralized spirit. Furthermore, they argue that "JPEG spam" objectively increases miners' economic incentives, which is increasingly important for maintaining network security given the four-year halving of Bitcoin's block reward and the resulting decline in miners' income.
However, Back disagrees. He points out that while miners may earn higher fees from inscribed transactions in the short term, this benefit will be minimal once the hash rate and mining costs increase accordingly. He estimates that JPEG inscriptions may contribute only 0.1% to mining profits, far from enough to offset the potential harm they bring, such as damaging Bitcoin's reputation, increasing transaction costs for ordinary users, and reducing Bitcoin's accessibility as a peer-to-peer monetary system.
This controversy has led to a sharp split in the Bitcoin community. Supporters see inscriptions as a legitimate economic activity and an expansion of blockchain applications, while critics, such as Back, believe that inscriptions are a waste of block space, crowding out transactions that reinforce Bitcoin's core value proposition.
Back proposed several potential solutions to this problem, including communicating with miners and mining pools to prevent them from processing such transactions and implementing wallet-level reforms to allow users who refuse such transactions to manage fees more effectively. However, he also warned of the centralization risks involved and suggested that even minor economic adjustments could make JPEG inscription mining unprofitable, thereby alleviating the current predicament.
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