jimbocoin on Nostr: Unpopular opinion: Inscriptions are merely monetarily inefficient transactions. They ...

Unpopular opinion: Inscriptions are merely monetarily inefficient transactions. They will price themselves out of the market eventually. Not worth getting upset over. #Bitcoin

quoting
note1670…kqul

My take on this extra data is unconventional. To me, the inscription garbage is just an extreme form of monetarily inefficient transactions.

#Bitcoin rewards monetary efficiency. The smaller you can make your transaction, the less it’s going to cost you. The larger your transaction, the more it costs in sats/vByte. This pressures users to adopt space-saving features, such as SegWit or Taproot.

Even so, some people choose less space-efficient formats because they value it for some reason. For example, multisig transactions are less space-efficient than single-sig. Those extra signatures take space. Multisig enjoyers are willing to pay the additional cost because they value the multisig feature.

But value is subjective. Whether multisig is “worth it” is entirely up to the individual. The way Bitcoin adjudicates these differences in preference is with the fee market. You express your desire for space-inefficient transactions by footing more of the security budget (fees to miners).

Inscriptions are merely the most extreme form of inefficient transaction. They’re still monetary transactions. Sats still moved. But they moved in a particular way that the sender assesses is worth the additional cost.

To me, there’s no *categorical* difference between legacy address transactions, single-sig SegWit, multisig, and inscriptions. They’re just differently efficient with respect to bytes and money movement.

The beauty of the Bitcoin fee market is that it rewards patience and punishes inefficiency. You can pay for scarce block space with either time or money. You can wait until the pool clears, or you can pay to be first in line.

Bitcoin is a self-regulating system that automatically ejects low-value use cases thanks to NgU. Satoshi Dice is no more because its design is no longer efficient due to the market value of block space. The same thing should happen to inscriptions in the fullness of time.