As we first reported back in March (The Future of Bitcoin and the Exponential Growth of and Risks Posed by Ordinal Inscriptions), we kind of saw this one coming. Details about the addition of Bitcoin Ordinals to the U.S. NVD can be found here.
“The United States National Vulnerability Database (NVD) flagged Bitcoin’s inscriptions as a cybersecurity risk.”
“The National Vulnerability Database (NVD) flagged Bitcoin’s inscriptions as a cybersecurity risk on Dec. 9, calling attention to the security flaw that enabled the development of the Ordinals Protocol in 2022. According to the database records, a datacarrier limit can be bypassed by masking data as code in some Bitcoin Core and Bitcoin Knots versions. “As exploited in the wild by Inscriptions in 2022 and 2023,” reads the document. Being added to the NVD’s list means that a specific cybersecurity vulnerability has been recognized, cataloged, and deemed important for public awareness. The database is managed by the National Institute of Standards and Technology (NIST), an agency of the U.S. Department of Commerce.
Bitcoin’s vulnerability listed in the Common Vulnerabilities and Exposures (CVE) System.
Image Source: Coin Telegraph
Bitcoin’s network vulnerability is currently under analysis. As one potential impact, it could result in large amounts of non-transactional data spamming the blockchain, potentially increasing network size, and adversely affecting performance and fees. An inscription consists of embedding additional data to a specific satoshi (the smallest unit of Bitcoin). This data can be anything digital, like an image, text, or other forms of media. Each time data is added onto a satoshi, it becomes a permanent part of the Bitcoin blockchain. Even though data embedding has been part of the Bitcoin protocol for some time, its popularity only increased with the advent of Ordinals in late 2022, a protocol that allowed unique digital arts to be directly embedded into Bitcoin transactions, similar to how nonfungible tokens (NFTs) run on the Ethereum network.
The volume of Ordinals transactions clogged Bitcoin’s network several times during 2023, resulting in more competition to confirm transactions, thus increasing fees and slowing processing time. If the bug is patched, it can potentially restrict Ordinals inscriptions on the network.
On the NVD’s website, a recent post from Bitcoin Core developer Luke Dashjr on X (formerly Twitter) is featured as an information resource. Dashjr alleges that inscriptions exploit a Bitcoin Core vulnerability to spam the network. “I guess it’s like receiving junk mail that you have to sift through everyday to find the ones that are your contacts. It slows down the process,” a user wrote in the discussion.Asked if Ordinals and BRC-20 tokens “would stop being a thing” if the vulnerability was fixed, Dashjr replied, “Correct.” However, existing inscriptions would remain intact due to the immutability of the network.”
Bitcoin Core Developer Labels Ordinals a “Bug,” Sparks Security Debate.
A renewed debate over Bitcoin ordinal inscriptions has emerged, fueled by a surge in unconfirmed transactions on the blockchain. Luke Dashjr, a Bitcoin Core developer, has labeled Ordinals as a ‘bug’ exploiting a vulnerability in Bitcoin Core. The issue gained prominence in May when Binance temporarily halted Bitcoin withdrawals due to network congestion caused by Ordinals. At that time, the number of unconfirmed transactions soared to 400,000. On-chain data reveals that there are currently over 260,000 unconfirmed transactions, leading to elevated transaction fees and increased memory usage beyond the allotted 300 MB.
“Inscriptions are unstoppable,” Fang stated. “This gives miners more fees and higher profits.”
According to Dashjr, Bitcoin Core has allowed users to limit the size of extra data in transactions since 2013. Ordinals bypass this limit by obfuscating their data as program code, leading to larger transaction sizes than regular transactions. But on the contrary, a substantial camp views them as an evolution of Bitcoin’s blockchain. Jason Fang, managing partner and co-founder at Sora Ventures, asserts that Ordinals are unstoppable, providing miners with more fees and higher profits. Fang argues that the open-source approach encouraged by Bitcoin’s creator, Satoshi Nakamoto, supports experimentation and innovation. He sees Ordinals as a natural progression that maintains Bitcoin’s original consensus while building on top of it.
Additional OODA Loop Resources
For previous OODA Loop News Briefs and Original Analysis, see:
For those taking the long view, holding on to their crypto boosterism stance and interest in the potential of blockchain technologies, see:
- OODA Loop | Global Crypto and Digital Currency Initiatives Series
- OODA Loop | Blockchain Case Studies Series
Bitcoin’s Momentum: Bitcoin seems unstoppable due to solid mathematical foundations and widespread societal acceptance. Other cryptocurrencies like Ethereum also gain prominence. The Metaverse’s rise is closely tied to Ethereum’s universal trust layer. See: Guide to Crypto Revolution