Bitcoin NFTs are among the hottest topics in crypto these days, so Meteor hosted a Twitter Space with Dennis Porto and Sean Bonner last Friday Feb. 17 to unpack it all. Below is a lightly edited transcript. What you'll get if you dive in: the essential history of Bitcoin's on-chain data storage wars, how Ordinals and Inscriptions work, how Bitcoin could now become the world's default censorship-resistant network, why creators might want to use Bitcoin NFTs, what collectors need to know about cross-chain copycat projects, and much more.

EVAN HANSEN: Welcome to today's show. I'm Evan Hansen, Meteor's Editor and Co-Founder and we're building a new content community here for people who are fascinated by the possibilities of AI and Web3 for art, media, culture, and beyond.

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We have two guests joining us today to talk about the hottest topic in crypto. And I don't mean the SEC, which is probably a tie. Okay, you can argue with me on that.

But we're gonna talk about Ordinals. It's a new protocol that makes it possible to mint NFTs on the Bitcoin blockchain. Ordinals is not to be confused with Inscriptions, which are the actual JPEGs and media and data that gets inscribed. Ordinals is the protocol.

This is important. The first time Bitcoin has been used for something other than financial transactions. And it's really blowing up.

And here to help us make sense of it is, first of all, Dennis Porto, he's a long time Bitcoiner, NFT collector and writer who's been an advocate for art on Bitcoin for years. He was very early to Ordinals, minting inscription number 89, and helping inspire early adopters with an influential essay, discussing the controversy of on-chain data storage just days after the launch. Welcome.

Also joining us is Sean Bonner, Sean is an artist, author, and activist who is immersed in the world of NFTs, where he plays an educational and advocacy role while also working directly with artists and projects. He's got a deep understanding and appreciation of the culture and history of this stuff. So, we're glad you can be here, Sean.

SEAN BONNER: Yeah, thank you so much for having me excited to talk about all this.

EH: Dennis, maybe you can start us off. And let's walk through this slowly because there's a lot to it and there's a fairly long history. But at a very high level, give us your opinion on what's been happening and why is it important?

DENNIS PORTO: Thanks for inviting me.

People have been trying to store data and use Bitcoin for things other than financial transactions from the very early days.

I wrote about this a bit in the essay where this was a controversy that really started just after the origin of Bitcoin back in 2009.

And at the time there was a big debate about whether you could have an alternative DNS system, which is what people use to navigate to Web sites.

If you could host this on Bitcoin as well, because there were, and there still are, some problems with the current centralized model in the way that domain names are served.

And so this was a big debate at the time and Satoshi weighed in himself back when he was still active and basically said that, you know, no, you should do this maybe as a separate protocol. Not saying that it's not a good idea but just that Bitcoin should be for financial transactions basically.

And so that kind of did happen that way, it went off and became its own protocol and it had become NameCoin which is one of these old coins that went by the wayside.

But the debate didn't go away. The debate kept going and the next chapter of this debate was this thing called "OP_RETURN," which is an operation on Bitcoin that allows you to store this very very short string of text or data, just 80 bytes. So enough for this sentence or a hash of an image or something like that.

And this was kind of a compromise because there were these people who were sending Bitcoin to fake addresses instead of a real Bitcoin address. They would type in a message or something as the address and that's kind of problematic to the Bitcoin protocol because then all full nodes have to remember that address forever, because there's unspent Satoshis, unspent Bitcoin, at that address.

And so encouraging them to instead use OP_RETURN signaled to the full nodes that hey, you can ignore this data. It's still downloaded, but it's not held in active Bitcoin memory, which is a big cost to Bitcoin nodes.

And so this was a compromise that allowed people to build layers on top of Bitcoin. This is how CounterParty worked, which is an early NFT protocol on Bitcoin. This is also how Omni worked, which is the origin of the Tether stable coin, which eventually moved to Ethereum.

That was kind of the next effort on Bitcoin data storage. And I used to use this too back in the day, I've written haikus on Bitcoin using OP_RETURN. I've always been eager to see this kind of art and free speech take off on Bitcoin.

EH: There's been a couple of super interesting ones, right? I mean, Satoshi himself put a hidden message in the Genesis block, isn't that right?

DP: Yeah, that's right. But I don't think that was with OP_RETURN. I think he did that within the coin base. If I remember, but I don't recall the exact details.

But it's a similar idea where even Satoshi himself realized that's a demonstration that there's things that you can do on Bitcoin besides just financial transactions, right?

Because he was making a statement.

That's what I've been doing with OP_RETURN and what I feel a lot of these Ordinals are doing, Inscriptions are doing nowadays.

Should I keep going with this history or is it too much?

SB: I was just thinking, "Keep going, I love this."

EH: Yeah, yeah, I think it's super important to know the history because there's some really deep long-term debates, really in the core Bitcoin community around, is Bitcoin just for financial transactions? And there's some really hardcore people who think that's the case and others who have been wanting to do more with it. It's very pertinent and I think it's a debate that goes back almost to the beginning.

DP: Yeah, absolutely right. Just to kind of pick up where I left off then. OP_RETURN was really popular for a while because a lot of people were using Tether, a lot of people were using CounterParty to find, sell and trade Rare Pepes and things.

Eventually a lot of these things moved off chain. Even Rare Pepe's got wrapped onto Ethereum and people started trading it there just because it made more sense on Ethereum at the time.

So data storage on Bitcoin was kind of held by the wayside until around 2018-2019. And then it wasn't until more recently that Casey started his effort with Ordinals and Inscriptions, just over a year ago.

EH: Just to catch people up, that's Casey Rodarmor. He's a Bitcoin core developer who came up with the Ordinals protocol.

DP: He's a super bright super intelligent guy. He also leads the SF Bit Devs Meetup, which is an influential Bitcoin developer meetup in San Francisco.

So he's been working on this a long time. He's also really into generative art, which is taking off on Ethereum.

And so he was wondering how he could basically find a way to marry his interests in digital and generative art with his preference for Bitcoin. And I think it's fair to say he prefers Bitcoin to Ethereum for a lot of reasons, which I can get into later.

So long story short he developed Ordinals first, which is basically a way of just tracking Satoshi's. It doesn't have anything to do with NFTs. Because Satoshis on Bitcoin, those are the smallest unit of a Bitcoin (1/100,000,000). They don't actually have any serial number or way of tracking them.

But if you just subscribe to a first-in/first-out principle, you can follow a Satoshi in a way. It's kind of an opt-in system.

And then on top of this he made Inscriptions, which is basically a way of encoding data attached to a certain Satoshi that you can follow using the Ordinals. He calls it Ordinals Theory.

I heard about this a month or two ago, and then I wrote the essay and the rest is history. It has really taken off. There are now more than 100,000 inscriptions on Bitcoin.

EH: It's fascinating. There's a little bit more history, I think that's worthwhile going into, which is the fork, which is known as the Taproot fork, which was approved by the Bitcoin community as an important and useful upgrade, and yet without really realizing all of the implications.

I think one of the super interesting things about this is that Casey kind of figured out that after the Taproot fork, it was now possible to bypass some of the OP_RETURN data caps. That's the way I understand it. Is that correct?

DP: Yes, basically. It is a bit more complex. There were a few different upgrades to Bitcoin that all kind of allowed Casey to make Inscriptions work. The first one was SegWit, which stands for Segregated Witness.

I think it happened back in 2017 and it moved the signature data to a certain part of the Bitcoin transaction, which is where Casey ended up storing all of this Inscription data.

Taproot removed a lot of the limitations on that data, removed size limitations and allowed it all to be stored in a linear way. So it made it much easier for him to make this Inscription protocol.

Although he says, and I'm sure it's true, that he could've done it without Taproot, but it made it a lot easier.

EH: This is very cool. And then, the size of these things, you participated in the biggest block in history, I believe the Taproot Wizards. It was almost a 4MB block. And I think that's about touching the limit. Is that right, for one block?

DP: I was in a group of about six others and we really wanted to see how far we could push this. And even with this Inscription protocol, it's still hard to make a transaction more than 400KB because it's a limitation to Bitcoin core, which is the node software that we all run.

But we worked directly with a miner to get a transaction included in a block that basically took up the whole four Megabits, which is the largest Bitcoin block it's possible to make.

And it was a fantastic night. We had champagne afterwards.

EH: Yeah, that got a lot of attention. I guess this gets to one of the core critiques, which I think we should get into. If you're going to be using up all the block space for these types of data storage kind of transactions, what does that do to the efficiency of the financial transactions? Do they get put to the back of the line?

And is there a legitimate critique there that by piling all of this stuff in the blockchain, it's making it more inefficient. And some people would even call it just straight up spam.

DP: I was sympathetic to that argument and I tried to lay out that point of view in my essay, but I think in the end, I have evolved a little bit on this, right?

I think that you should be able to include whatever you want in Bitcoin.

And just as there's low value spam or whatever -- there's some terrible NFTs on Bitcoin, there's copy pastes of other projects basically -- but there's also low value financial transactions. Back in the day we used to buy Alpaca socks and buy coffee or whatever. So I think that in all things, financial or non-financial transactions, there's high and low value. And you just have to pay the fee that you think is appropriate.

EH: There's a lot of what I would call non-consequential transactions, or at least they're consequential to people who are speculating in the market, but they don't actually do anything. So other than maybe you get rich or go broke, there's all the shit-coin trading, which you might say is equally questionable on some level, in terms of the value of it overall to society.

DP: Value is subjective, right? So I think the value is determined by the cost of you're willing to pay the miner to include your transaction in the block. So I really feel this is one of those cases where the market sorts this out. And it was long ago, back with SegWit that we agreed to have these four megabyte blocks. And now the block space is being used. I don't think that you can really make a value just for how people choose to use that block space.

EH: Yeah, I guess the question will be what this does to the price. I actually have been trying to inscribe the cover of the story we wrote a couple of weeks ago on this exact topic. And I don't really understand the pricing model apparently because it cost almost nothing. It was $3 for a 20KB image. And it's still stuck in transit, so I think I didn't pay enough.

I guess there's going to be some inflationary pressure that might actually be of a benefit to the Bitcoin chain at this point. The miners are going to get rewarded a little bit more in terms of being able to maybe price this stuff a little bit more profitably.

DP: Yeah, such a good point. So Bitcoin has this long-term issue where over time, the miners, right now they get something called the subsidy, which is basically the protocol bakes in this reward for miners to incentivize them to mine.

And that goes away over time, so we need to find some way to continue to reward them for mining into the future. Transactions weren't enough, you know, historically, to really incentivize mining all by themselves.

But with the takeoff of Inscriptions, there's a huge backlog of transactions just waiting to be confirmed. And it sounds like your magazine cover is one of these.

If you don't pay enough fees, it's just never going to happen anymore. So you really have to bump up your fees. And miners have been taking in a lot more fees because of Inscriptions that they're all about this, having spoken to some of them.

EH: Yeah, it feels like that's a self-healing process. If the prices go up, then people are going to be less inclined to spam it, right? It's like, I think that would solve the spam problem for email if there was a charge on it. You wouldn't get so much spam. So I think pricing and economics fixes a lot of the potential downsides of this and has potentially very big upsides for Bitcoin.

DP: I think so too, and furthermore, we've for years now been working on things like Layer 2, the Lightning Network. And there's very little adoption of it because fees are so low on the main chain, why would you use this side chain or this layer that is kind of engineered for low fees? But now it totally makes sense. This is also food for Lightning developers, people who are supporting the Lightning ecosystem.

Now all of a sudden there's this incentive to get off the main chain and transact on this higher level.

EH: So this seems a good transition to bring Sean into the conversation. I'm really curious to hear your take on what's been popping up in Bitcoin Inscriptions.

It's wild, the things that are showing up are just so hilarious. And some of it's just straight up right click save, just drag a whole bunch of existing Ethereum collections over. And there's a lot of rips and you see all the Pepes and all of that stuff.

Somebody posted an actual playable version of the video game DOOM. There was a fart recording. Somebody put it up there, a while back, which they're trying to sell. I'm not sure if it's true or not, but somebody, I read somewhere there was a 12 Bitcoin bid on this noise, 'cause you can put in anything you want, video, sound, JPEGs as long as you can fit them in the block.

So Sean, what's your take on the cultural moment we're in here, what's happening? How does Bitcoin relate to the NFT culture that evolved on the Ethereum side of things?

SB: I think there's a whole bunch of different questions there. So I'll try to unpack a little bit of them.

Just to quickly answer what's been happening, I think that it's brand new and everybody's trying to figure out what to do with this. And so I don't think that it's safe to say what it's shaping up to be in any way yet because there's so much just experimentation and just kind of trying things out.

I mean, the tools to even do this stuff are only, you know, 48 hours or 72 hours old, in a lot of cases at the moment, right?

So it's still, it's a lot of very curious people just kind of poking it with a stick to see what it does and helping, you know, talk about it and sort of shape where it's starting to go. And a lot of people have their own different ideas.

And so I think it's going to take quite a bit longer still and have more people getting their hands dirty with it, doing stuff for that social construct to catalyze in a specific direction. Then we'll be able to say, "Oh, here's what's happening on Ordinals."

Right now it's going in every direction. It's what you would expect. There's little jokes, there's copies of stuff, there's new interesting stuff.

I'm personally really looking forward to the brand new Ordinal specific stuff that could not have happened on ETH. What makes this unique and interesting and exciting and different from everything we've been excited about that's happening on ETH for the last few years.

But I don't know that we've specifically seen what that might be yet. And I think a lot of people are thinking about that and trying it out.

In relation to the bigger sort of cultural Bitcoin piece, what I think is quite interesting is Bitcoin was the entry point for a lot of us. A lot of people who are in ETH and in NFTs and all of this stuff started playing around with Bitcoin a long time ago.

And at least for me, it just kind of got boring. It just wasn't as exciting. Whatever it was, it just didn't hold my attention on a daily basis.

I knew about it. I felt I understood what was happening, but I didn't feel the sort of pull to rush back and check every day to find out what was going on.

That was sort of what happened with the beginning of NFTs on ETH. Every few minutes you're refreshing, oh my gosh, new stuff, new stuff, new stuff.

And what I've seen is a lot of people who had no interest in Bitcoin, for the last, I don't know, five or six years or something, or maybe they've never even looked at Bitcoin, all of a sudden, they're super excited about Bitcoin, right? They're curious, they're setting up nodes, they're checking this out.

So I think that in the larger context, this is really going to tie those two worlds together, possibly, in ways that nobody was anticipating.

And I think one thing that might be a funny development is that for the last year and a half, there's been all of these conversations in ETH about, where's the next giant group of users going to come from? And all of those conversations have been, how do we get Normies to pay attention to NFTs? And what it might actually be is how do we get Bitcoin people to pay attention to NFTs? I don't think that's something that these people are really thinking about. And I kind of think it's a cool turn of events.

EH: Yeah, for sure. And I think let's get a little bit into the technical differences between how these NFTs persist in the Bitcoin chain versus in Ethereum. And Ethereum has got so many sub Layer 2s, all these side projects, Polygon, Tezos and all of them on the core Ethereum chain.

There's a lot of these projects that are just hashes, right? And they link out to files that are published on IPFS, which is a decentralized peer-to-peer storage network, the Interplanetary File System. There's been a critique of a lot of Ethereum projects that aren't fully on chain, that these are going to succumb to bit rot, projects will be unsupported in the long run. And it's not really resilient necessarily.

I know there are some Ethereum projects that have been run completely on chain, but it's not necessarily the most common. Whereas in Bitcoin, you're all on chain. The whole thing's on chain permanently from the get. Does that make a big difference? Do you see that being a kind of a value proposition?

SB: I think that's a huge difference. I think there's definitely a very, very diehard community of on-chain fans in the ETH world.

But on chain is hard, depending on what you're doing. You know, if what you're doing takes up a lot of space, putting that on the chain is not a super viable option in a lot of ways.

So I think that it's not necessarily better or worse. I think it's a different use case, right? I think that there is a place for the ETH system of linking off to resources which are held elsewhere. And I think that, again, as you mentioned, that sort of digital rot, that's something that needs to be thought of, and needs to be considered, and will continue to be an issue going forward, but that's where solutions come from.

But then also the fully on chain bit -- whether it's ETH or Bitcoin -- is an important piece. I think that right now we're talking about art specifically, but I think that another very, very important piece of Ordinals and Bitcoin and this kind of on-chain thing is we suddenly have a censorship resistant place to store documents. If you have something that you want up online with nobody being able to get rid of it, and it's some text files, or you have to store documents or something, you can put that in an Ordinal and then you can inscribe it and now it's there forever.

So I think that we're going to see some interesting developments in that going forward.

EH: Some people think that's actually a critique. Some people see that as a threat or an attack vector for people who are anti-Bitcoin. You can imagine putting US State Department top secret documents on the blockchain 'cause you're like, hey, I'm a Wikileaks type whistleblower and I want the world to know.

But if you do this, now every Bitcoin node in the world is holding espionage documents that the US government might not want to be there.

How serious are those types of complaints? People have mentioned child pornography. There's been a lot of FUD about child porn on blockchain in the past. And I'm curious, though, if that now, because of the on-chain permanence, it's for real. As long as there's a Bitcoin node running somewhere in the universe, this stuff is going to be retrievable. So is that serious or is that just more FUD?

DP: I think that it's something we're talking about and considering.

Already there have been people who put pornography on Bitcoin using Inscriptions.

Casey, who runs one of these Inscriptions Explorers on, he just takes it out. Which is not censorship, because it's still there in the protocol. It's still on Bitcoin, inscribed permanently. But the clients on top of this protocol, his block, basically, his Inscription Explorer, can kind of set whatever policy they want about what they actually broadcast to the public.

So I think that it's actually a beautiful system where you can be an editor basically of a client and curate and moderate what you're displaying to the public while also allowing a public square to develop on the protocol itself, which is permission-less.

And I just don't think that putting child pornography on Bitcoin, I just don't see an incentive among these bad pornographers to do that. They can share on their own peer-to-peer networks or whatever, there's no reason for them to pay to be included in a block.

I think it'll probably be done by people who are maybe opponents of Bitcoin, as an attack vector. But hopefully responsible explorer runners like Casey will just remove them from any public facing website.

EH: It's interesting actually, you think about how people have talked endlessly about a social network where people can put their own version up with their own moderation policies in place. So you can see a filter, but the entirety of it is sort of free from any censorship or control.

People can put clients on top or filters on top and they say, "Hey, our community only wants this type of content, so we're going to pull from the total pile and only show them the slice that meets with our values."

It feels you could build that on top of Bitcoin now.

DP: Yeah, I think that this is actually something that's meeting at some moment in time. Because this is also the same ethos behind Nostr, which is a free-for-all messaging social media platform. You can push anything to the Nostr protocol as far as communications and stuff.

But then there's all these clients that you can create, you can still mute people, and moderate content.

So for years now, there's been this debate about, Is Twitter the Town Square, or should it be considered a public square, a utility, same with Facebook and all these social media companies?

And I think now in the financial space and in the art space Bitcoin and Inscriptions and Nostr, they're all kind of, I think, kind of meeting their time, they're meeting the moment and rising to the occasion and really opening up these protocols as a new Town Square and still allowing a kind of good stewardship and moderation on top, but not limiting free speech at the base layer, which is important.

SB: I was just going to say, I completely agree with that. And I was going to say that I think, you know, some of those complaints and criticisms, you know, the old people in the room like me will remember, I mean, those are the same things that we heard about the Internet in the 90s. Like, oh, once you put something online, it's there forever, and people are going to put these terrible things online, right?

And then obviously it turned out that maybe things aren't always online forever for good or bad. And there's some stuff I've lost that I wish I didn't.

But I think that, all these years on, for that to come back around to now, a system of, okay, things are on there forever, but you can choose which ones you want to interact with in your sector.

It's a more elegant solution to that, I think.

EH: Hi, we've got a request from the floor to take the mic. And, I've come across your work before. And so I've given you the mic. You've got some really interesting things to say about AI art and that world. But I'd love to give you the floor for a second.

BLAC.AI: Yeah, I appreciate it. This is such an interesting conversation. And I think, you know, in AI as well as the Web3 world of things, there's always new things coming out, new innovations, new networks, new tooling.

And I think that one of the challenges that we have in this community is sort of, you know, chasing the new shiny object in the room.

And I don't necessarily think that that's what this is. But I kind of am looking for anyone on stage to sell me on why it's not. And I mean that in the best possible way. I love Bitcoin. I think it's a great funnel for a lot of different things.

I do think that there's always a hype cycle and a trend cycle and the relationship between Ethereum and Bitcoin. I also think there's also a challenge with, just to give them more context with artists who, artists and creatives who are minting to Bitcoin who were on ETH, who had burned all their work, or burned some work and now put it on Bitcoin.

I think there's a weird kind of dynamic when it comes to things like that. And so I think that outside of the hype cycle of things, I would love to kind of have the bullet point, sales point, if you will, on why to move over to Bitcoin from Ethereum, or why artists or creatives should be building on Bitcoin versus Ethereum. Not to put you in a position, or sell me on it, but I'm just trying to understand what are those core benefits? What's the core differentiators? What's the kind of value statement or process when it comes to moving over to Bitcoin?

SB: I'm not in the position or necessarily even want to be in the position of trying to sell anybody on anything, right?

I don't think that there's a concept of "moving" from one to the other.

I know there's been some sort of dramatic, I would say, like, performance art maybe with somebody burning an ape and moving it over, but I think that's sort of a silly of-the-moment, engagement farming kind of stuff.

I don't think that there's really a zero sum with this. I think it's just another tool.

And it's just another tool that works a little bit differently in some ways, and depending on what you as an artist are doing, maybe for some things that work better, some things that work worse.

I think that one thing that stands out in my mind immediately as a core difference for artists is that Ordinals really excels in standalone one-of-one art.

With ETH, everything is inside of a smart contract, and everything has its own collection.

And so if you're like me, where you have some pieces that are  their own thing, they need to just live on their own, Bitcoin is an interesting option.

And then you have other things that are a part of a larger body of work.

Now I have dozens of different collections, some collections only have one piece in them. Some collections have one-of-one pieces that don't necessarily fit next to each other, but I didn't want to have to just keep publishing new contracts, but you know, so it's just a little bit of a sorting thing.

Whereas with Ordinals, there are no collections. There are no contracts with that, every piece stands alone on its own.

So if you're an artist who just makes singular work, then maybe that's an appealing difference between the two. I think that, you know, there's a lot of things in that conversation you can run different ways, but at the end of the day, they're two different things. They work slightly differently.

They're probably gonna have different audiences, but it's not necessarily that one's better or worse. At least not yet. I mean, who knows what's gonna happen down the line, right? But right now it's just another tool.

And if you're messing around with stuff, then it's fun to play with.

EH: Let's switch and talk a little bit about the collector's side, people who have sort of invested in some of these more iconic drops.

Sean, I know you're part of the CryptoPunks community. And we have multiple versions of CryptoPunks. There's the V1s, there's the original, or are those the authentic. Anyway, I get confused about all of those.

But now there's another one, and it's Bitcoin CryptoPunks. And I think there's some confusion about these collections. People who are collecting are like, How does this increase the value of my collection or my NFT over on this chain? Or does that reduce the value? Is there competition now between them?

I wonder if you could unpack a little bit of the implications of just this cross chain copying. I think your position has been that it's not a question of provenance, of you need to move this original from one chain to the next and preserve that history.

There's just a brand new project that's been released. It's on a different chain. It has its own history, its own backstory, and it's not competing. It's just different.

But I'm curious. That does seem to confuse a lot of collectors about whether they should buy the V1 or buy the Bitcoin version? What's more important? Can you unpack that a little bit?

SB: Yeah. I mean, hats off to Dennis. I think he inscribed the very first CryptoPunk on Ordinals. So, you know, bow down over there.

DP: It was my CryptoPunk. It wasn't just a copy paste of some other thing, which is what we see now.

SB: Yeah, yeah, of course. Which is what we see now. Yeah, so, you know, thank you, but also, you know, shakes fist. And all of those things.

I think, you know, I wrote a thread about this in the heat of the inscribing panic that was going on and trying to coax level heads to prevail on this a little bit and really think of this just like all the other copies of CryptoPunks, right?

So it's just Polygon punks or Tezos punks or you know, any of the other copies of Punks that have happened.

This is another piece of the puzzle in that way. It's just another copy on another chain.

I think that what's most interesting is what this says about CryptoPunks as a project, that anytime there's a new chain that has these things, somebody rushes to copy CryptoPunks, right?

I mean, I think that that says a lot about the cultural power of this collection and the influence that CryptoPunks have had on derivatives and on all of these things, that's the first thing.

Within the first 30,000 Inscriptions, 10,000 of them were CryptoPunks, right? I mean, I think that that says a lot.

And then also, the one separate piece is that unlike all those other copies where it's just one person who's like, "Oh, I'm gonna go copy this and then, you know, cash real quick." This was really a whole bunch of different people seeing to this effort and trying to jump into it.

And of course, by the end of that, that was a lot of people just trying to inscribe as many as they could, hoping to flip and sell them.

But that wasn't it entirely and a lot of CryptoPunk owners -- myself, or Dennis -- wanted to inscribe our own just because we have it. I have a wallet full of derivatives of my Punk, because I think that's super cool.

And so, you know, seeing that influence and how that spread and everything, it's interesting, but I don't think, obviously, I'm not giving financial advice or whatever, but I don't think that narrative of, oh, this is the big investment piece, I don't think that really holds a lot of water.

I think it is really, it's just another copy of CryptoPunks on a new chain.

And if you want to get into CryptoPunks, you should be looking at the real ones on ETH, not whatever knockoff of the moment on another chain, if you're thinking that you're gonna sort of become a part of this world in one way or another.

DP: I basically agree with Sean. I would even take it a step further.

I'm a Bitcoiner first and foremost. I started with Bitcoin. Bitcoin is special and distinct from Ethereum. It's my preferred chain.

But CryptoPunks are on Ethereum. They're not a Bitcoin thing or on these other chains. And so a discerning CryptoPunk buyer, someone who wants to actually buy a CryptoPunk, they're gonna buy an Ethereum CryptoPunk. They're not gonna be looking for one on Solana or Polygon or whatever else.

These are permission-less systems, so anyone can kind of pay any money to submit on any chain, but that doesn't take away from the fact that it's very easy to discern what is real and what is fake. At least it should be.

I think it will become easier over time.

Yuga Labs is the company that owns the IP. They license it to the CryptoPunk holders on Ethereum. They've been very clear that the Ethereum smart contract -- they even list the exact smart contract -- the holders of the CryptoPunks of this smart contract are the ones that we license the IP to. And so those are the real CryptoPunks. There is not any question in my mind about that.

And so when people go and place other people's CryptoPunks on another chain, I just feel that it's fine for them to do it, but don't expect them to have any value.

I think it's distinct from what I did. I posted my own CryptoPunk on Bitcoin because it's my signature. I love my CryptoPunk and I can do what I want with it because I licensed the IP from Yuga.

That's different than trying to submit all of them as quickly as you can, just because a new chain now allows NFTs. I think that is not a high value, not a high value endeavor in my opinion.

EH: Yeah, I mean history matters, right? That's the main thing. These things look exactly alike, but they're completely different.

I think maybe it's hard for people to grok that, but it's like, if you think of it in any circumstance, you know, if you have LeBron's shoes, and they're exactly like anybody else's… I don't know what his brand is, I shouldn't have gone there. What does he wear?

Anyway, the fact that he owned them is a historical fact, and that suddenly makes them valuable, and there's no others like them, even though they all came out of the same factory exactly the same.

SB: Yeah, I mean, that's exactly the promise of NFTs from that art and collectible standpoint from the beginning, right? It's that provenance. It's that ability to tell the real thing from the fake thing, right?

And I wanna be clear, I'm not denigrating the fake thing. I love derivatives, I love derivative culture, I love seeing how influence spreads from one thing to another. So it's not a criticism of that from my perspective, it's just a recognition that these are two very different things.

And the whole beauty of putting art on the blockchain is that ability to trace that provenance all the way back. See exactly what is the real thing, what came after it, where did it lead to, what branch of it, all of those things. You create this really exciting culture.

But at the end of the day, you can say, here's the token, here's the start of it.

And that's very important.

EH: We're about 40 minutes in, so I want to look to wrap this up in a little bit.

When we first wrote our article on Ordinals a few weeks back, we really focused on the resistance. There were all these very loud critics who were like, this is terrible, we need to stop it, we need to do a soft fork, we need to change this, we need to, basically we need to shut it down, which we quite frankly found quite ironic that the proponents of permissionless culture were suddenly saying, well, we need to rein this in and get this under control. It seems it's piped down. I mean, it feels the resistance has either crumbled or gone to the corner.

Am I getting that wrong? It just feels this is here to stay. I think reverting it would be almost impossible based on some talks I've had with some real deep Bitcoin, like, sort of, CS people that it would be really hard to like, roll it back.

So I guess it's here to stay and we're just gonna see how it evolves, the joy of it, the fun of it, the cultural exchange. Do you guys have any parting thoughts?

DP: I'm just saying that I do always enjoy when the decentralized permissionless advocates get very upset that something wasn't cleared with them. And they're not approving of it. So that was an amusing sideline to sit on for a little bit. Permissionless, as long as I'm okay with it.

EH: Yeah, we called it "blockchain NIMBY-ism."

SB: Yeah, exactly. I think that this is going its own way. As I said in the beginning of this, I'm very excited to see what sort of Ordinals natives come out of it. Like, what is this, what seeds have been planted in people's heads and imaginations so far that are gonna kind of develop into something, you know, in the coming weeks and months that we never could have imagined before. It's its own thing, it's definitely here.

You know, I mean, who knows how big anything's ever gonna get at any point, but there's certainly momentum behind this and people, enough people building stuff that it's not gonna fade away tomorrow.

BA: Just a quick, kind of small question, just to wrap it up with, can you see the potential for marketplaces to pop up utilizing this type of technology? I know there's been a couple of little, kind of small projects that have done something that, but it seems to me this type of functionality and the way that Bitcoin operates is that it could be a very decentralized process in terms of how artists or creatives are utilizing the kind of minting process and that sort of thing. Or do you see something that becomes more centralized and consolidated into a marketplace or multiple marketplaces?

SB: Well, I know a couple have popped up. There's already six or seven marketplaces up and running to some extent. There's five or six different tools for people to go just in their browser and inscribe something.

So I think that that decentralized tool set is happening very fast, maybe even faster than some of us expected.

I was kind of talking about this a few, I guess last week even, and I was like, oh, then, by two months from now, we're gonna have like, two or three different options.

And so we've got almost 10 now.

I think it's all moving very fast. And I think it's going to lend to lots of people being able to do different things, which I think is informed by what happened over the last five years on Ethereum, where only a very few people cared about it. So the tools there were built very slowly. You had these really, really monolithic platforms grow out of that, when you're the only one there that cares.

But there's so many people doing stuff with this right now I don't know that there's one that's in the lead. There's half a dozen a week.

EH: There's an old adage of where you should invest that says wherever the devs are.

DP: I just want to mention as a big pointer how much I love that because all of a sudden there's all this attention and energy going into these obscure things like partially signed Bitcoin transactions. They are kind of a nerdy Bitcoin topic that you know people talk about at the dev meetups but you know never are in mainstream consciousness.

So I think that one of the big boons to this whole Inscriptions development is Bitcoin culture. Suddenly there's interest and development and experimentation on Bitcoin again. And people posting JPEGs and having fun and bringing new people in.

I've been here since 2013, I'm just so happy that we're kind of back to that feeling that I had in those early days. 'Cause it's been a long time. I'm happy that the vibe is changing.