A new frontier for Bitcoin? Recursive inscriptions explained

The Bitcoin community is abuzz with the rise of something called recursive inscriptions. A fresh new development that builds on the ongoing hype of the Ordinals protocol, recursive inscriptions appear poised to both disrupt the growing Bitcoin NFT ecosystem and redefine the parameters of blockchain-based file storage as we know it.

But how? And why should the NFT space care? Let’s investigate.

What are recursive inscriptions?

Recursive inscriptions can seem a bit complicated. But unsurprisingly, they are all about the Ordinals Protocol. As a refresher, the Ordinals protocol was first introduced to the world on January 21, 2023 by software engineer Casey Rodarmor. It provided a unique way to write data to Bitcoin’s smallest unit, satoshis (or sats). The resulting Ordinal Inscription is similar to an NFT, but with the significant difference that it is completely on-chain.

Recursive inscriptions build on this concept and provide a potentially groundbreaking method for expanding the Bitcoin NFT network. Each Ordinal can store up to 4 MB of data directly on Bitcoin’s blockchain. This has long been the maximum capacity for Bitcoin, albeit one that has recently been challenged by Taproot Wizards and Smart Inscriptions.

But thanks to Recursive Inscriptions, developers are now finding it possible to create an intricate web of interconnected data sources, meaning that Ordinals no longer need to exist as closed silos capped at 4 MB.

This is because a recursive inscription is essentially a complex mechanism that extracts data from existing Inscriptions and uses it in new. By connecting data through a series of calls, developers have discovered that it is possible to run software completely on-chain. Which of course has huge potential for interoperability on the Bitcoin network.

The potential of recursive inscriptions

We are already starting to see the potential of recursive inscriptions being realized through projects like OnChainMonkey. As noted in the above tweet from the self-proclaimed NFT historian and Ordinals collector Leonidasthe growing multi-chain project wrote a variety of data packets on Bitcoin as Ordnals, then used recursion to call those packets from the inscriptions in their upcoming Dimensions drop, enabling them to create beautiful 3D art in less than 1KB. ”

Recursive Inscriptions enthusiasts, such as Leonidas, have championed their potential not only to grow Ordinals’ use cases, but also to lower transaction costs by Reduce the volume of data inscribed on each satoshi. This ability to recycle saved data through recursion could very well eliminate the need to store duplicate file copies, which could lead to a significant increase in storage efficiency.

In particular, storage efficiency and interoperability achieved through recursion can even lead to the facilitation of hosting extensive files, such as video games, movies or complex software, all directly on the Bitcoin blockchain.

But beyond IP and entertainment, proponents have also emphasized the technological opportunities that the innovation of recursion could create. Indeed, recursive inscriptions could promote the implementation of permissionless contracts, enforced by Bitcoin’s durable storage, without the need for new cryptographic measures. This would mean that developers could rely on pre-existing Enrollment repositories to get around the current 4 MB limit by using data already stored on another Enrollment.

Recursive inscriptions critiques

Of course, no innovation can exist without opposition. Usually, critics of recursive inscriptions argue that the whole concept hinges on Rodarmor’s Ordinals theory, which is not embedded in Bitcoin’s core framework or agreed in consensus with the network.

As reported by Protos, this dependency could potentially lead to arbitrary changes by a centralized group of developers, affecting software functionality or misrepresenting file storage hashes. In addition, skeptics question whether recursive inscriptions could negatively impact data storage needs or transaction costs as its popularity grows and the number of users increases. Although this common concern has long been voiced by Bitcoin factions against Ordinals.

Despite their nascent nature and the doubts surrounding scalability, recursive inscriptions undoubtedly mark a key moment in Bitcoin’s evolution. At the very least, the prospects of broadening interoperability and increasing storage efficiency are more than enough to bolster recursion’s appeal. Of course, it remains to be seen how these technological advancements will shape Bitcoin’s future, but it is clear that the way has been paved for an intriguing new chapter in blockchain history.

Editor’s Note: This article was written by an nft now contributor in collaboration with OpenAI’s GPT-4.