Bitcoin congestion: Are ordinals breaking BTC?

Bitcoin has been experiencing major Congestion issues in the last few days Transaction fees has skyrocketed Creating a bottleneck on the network Apparently the reason is a spike in Activity around ordinals a protocol that Allows the creation of nfts and fungible Tokens on the Bitcoin blockchain some Say ordinals can bring Mass adoption to Bitcoin others see them as a silly Phenomenon if not outright dangerous for The network so does Bitcoin risk Becoming unusable because of ordinals And how could this new phenomenon impact The long-term development of the main Cryptocurrency we try to find out in our Latest interview with Samsung Mao CEO of Gen 3. I'm Giovanni on this show we Challenge the ideas that shape the world Of crypto in each episode we assess a Crypto narrative a macroeconomic Outlook Or a potentially disruptive technology Only the most solid ideas will make it To the other side [Music] Thank you We saw that the Bitcoin just went Through a short uh but unexpected crisis We saw that transaction fees skyrocketed In the last few days and there were uh Hundreds of thousands of unconfirmed Transactions that couldn't go through Because of a sort of congestion in the Network the reason for that congestion

Seemed to be this new trend uh which is Ordinals and brc20 tokens so a lot of People in the last couple of days were Making loud statements saying that oh Bitcoin is broken uh we killed Bitcoin Big Bitcoin is not working so what is Going on here The people that claimed that they broke Bitcoin or they killed Bitcoin are not Bitcoiners and I think it's important That everyone understands that like These are people that are Hostile to the network and they have Their own motivations and they're trying To accumulate uh followers that uh made Like altcoins and you know ethereum and Other things like that so they're Catering to a specific audience when They make these outlandish statements That they broke Bitcoin right they're Just trying to be edgy and debt Followers but um you know Bitcoin is Functioning perfectly Bitcoin is Uh like blocks are being produced every 10 minutes roughly and transactions are Still going through there is a backlog Of transactions but this is how the Protocol was designed that there is a Market for Block space and you have to Bid and replace your transactions uh and Bid it up if necessary to get into the Next block now if you're not in a hurry You can lowball the fees and wait for The congestion to clear up but it's

Basically just like um choosing to take A a toll paid toll freeway instead of uh Taking a back country road you can pay a Premium price and get there sooner or You can not and you'll get there when You get there but this is essentially Bitcoin's design and it's always been This way and in the past we've seen Large spikes of congestion and this was During the block size Wars and this one Actually pales in comparison to some of Those spikes in previous years so I Don't think it's really something that We need to worry about it is definitely Tied to things like the ordinals and the BRC 20 things uh and whatnot but it's It's going to pass because the these Guys are basically paying massive Amounts of fees that go directly to Bitcoin Miners And there's no way this Can be sustained I mean they need to buy Bitcoin and basically give it away to The miners and it's a question mark on How long they can do that for maybe it's A few more days maybe it's a week but Definitely it's not a sustainable model To throw money away Okay yeah because I wanted to know your Opinion about this new trend happening In Bitcoin with ordinance and brc20 Tokens in the last week the number of Ordinal descriptions has pretty much Doubled I I kind of get the feeling that You are not very favorable towards this

New sort of usage this use case of Bitcoin Um I get it from of course your Statements on Twitter and so on so could You explain what is your main argument Against ordinance and brc20 tokens well These things are largely hype driven Right like when ordinals first came out Of the gate what did they do they mined Uh a massive block I think it's like Four or something megabytes right and This is to get publicity so it's not Something that is designed to be Sustainable or even practical in any way And the transactions they're making are Horribly bloated in the case of brc20s So these are just short-term money grabs Similar to most things on competing Chains like ethereum and Solana right They exist to get some gullible people To pay attention to them by doing some Crazy Antics and Potentially clogging up the chain also To get more attention to induce fomo but Like like most projects that are in the Blockchain space they fade away in Relevance once the the issuers of the Tokens have made their money And I think ordinals never really made a Lot of sense to me it's just an Arbitrary way to number sets and somehow You're just saying like this is a unique Set but this is just your own arbitrary Numbering system that dictates that this

Technology as far as understand is Exclusively based on bitcoin technology So it doesn't really involve any Altcoins or other blockchain networks so How could you define this technology as Uh comparable to coins Well I wouldn't say it's really based on Bitcoin these are just external Protocols if you want to call them that That just put data into Bitcoin but by Your argument and counterparty which is A very old protocol is a Bitcoin based Because it is also inscribing basically The same thing into uh colored coins and Making nfts and things like that on Bitcoin but um at the end of the day I Don't think this is new technology or Very interesting like counterparty has Existed for a very long time they've Just found a way to make it new again And convince people to buy their there Are little pictures of I don't know Whatever frogs and wizards and things Like that so it's not very interesting And I think it's not even I mean it's Arguable if it's art but to me it's not Really art like any algorithmically Generated thing or some you know ugly Scribbles they don't really seem like Art the problem I think most bitcoiners Have with it is that they're kind of Just gouging people and trying to sell Things for like 10 BTC or one BTC and You know that's just uh

I think it just leads down to things Like wash trading but still there are Some bitcoiners for people that call Themselves bitcoiners for example Dan Held who are very positive about this Trend I just want to take one of the Tweets that then helped put out lately He said that Bitcoin adoption has Largely occurred through speculation not Payments uh he wanted to say that he Wants to say basically that speculating Attracting speculators who want to buy This uh ordinals this these tokens uh Basically they come into Bitcoin and They bring in adoption Um while a lot of while while not other People coming to bitcoin because for Using it as a peer-to-peer transaction Because that's not so common right now For people to use Bitcoin that way so Don't you agree that this trend could Actually be positive for bringing Adoption Well not if it's clogging up the chain With Spam right and spam is subjective But I would call it spam because it's Not really wanted in my book but um you Know he's not wrong that there are People speculating but people speculate On a lot of things and I don't think the Speculation is a a long-term viable Method to grow the network and grow Adoption if you look at a lot of the Altcoin projects they also have the same

Thing there's a sudden Spike of interest Because it's new and shiny and Interesting and then it tapers off and The projects die and I think that's What's just what the ordinals and the Brc20s are it's just something new and Shiny and it's not really going to have That staying power I think long term for Real Bitcoin adoption it is about Bitcoin being money Bitcoin being used As a savings technology Bitcoin being Used for payments like on lightning and Just uh people understanding what money Is that is what's going to make Bitcoin Become uh eight trillion dollar asset Class equivalent to Gold it's not going To be people making jpegs and sticking Them in the chain now we got the Technical aspect of it quite clear but Now there is also a cultural aspect Because what I get from these people That are promoting ordinals and br's 20 Tokens is that they are kind of waging a Cultural War within the Bitcoin Community where they are saying we are Tired of uh the sort of Dogma Um of the Bitcoin Maxes we want to bring Some fresh new activity into the Community so that Bitcoin becomes this More like uh Market driven free sort of Space and not this uh sort of dogmatic Sort of environment where Bitcoin is Supposed to be used just for that for That for that so what would be your

Response to this new cultural sort of um Movement Yeah I hear that a lot from that camp But uh I don't really understand it like Bitcoiners just want to use Bitcoin they Want to save money and you know enjoy Life and live in peace and then you have These guys coming in and saying we need To make Bitcoin fun again so that people Will adopt Bitcoin but um I don't know I Just think you're not well adjusted if You think uh putting pictures on Bitcoins chain is fun if you want to Have fun I don't know and have a Meaningful life start a family have kids Take your kids to the park play with Them you know like enjoy life and live Your life but this is not fun I think The craze is going to fade and all these People trying to Push these things we'll just move on to Other things because there's nothing Really intrinsically binding them to Bitcoin they could do what they want to Do with anything else or any other Technology but there's only one Bitcoin And there's only one way for us to fix The future and fix the money and that is Bitcoin okay and I just want to touch Upon one last technical issue here Because another argument that they Promoters of this technology put forward Is that these ordinals are increasing of Course transaction fees and revenue for

Miners And in that way they are ensuring That the security of the network will Continue being provided by the miners And that's an argument for saying we are Also helpful for network security Basically what would be your your Arguments on this if ordinals and these Are the things were sustainable I would Say yes but they are not and they will Fade away after uh you know Even months like let's not talk about Years here but network security is just Going to Fix itself because people will simply Pay more transaction fees to transact on Bitcoin as time goes on just because of More adoption more usage and more Transaction it's going to happen Organically with or without people Putting pictures on the Chain right as Far as understand there is some factions Who are saying that this is all like a Spam this is uh basically negative for The Bitcoin Network and they are even Thinking that perhaps some action should Be taken a coordinate sort of action From Bitcoin core developers to sort of Um push away this uh um nfds this uh Brc20 tokens and ordinals from the Network a sort of censorship uh Action against this phenomenon on Bitcoin would you uh kind of be favor in Favor of such an action It's possible I don't I don't think this

Is going to be sustainable but I've seen Some of those discussions on the Bitcoin Mailing list they're talking about spam Filters basically uh Luke dashier is Talk is probably the one that's uh Advocating for the most and I think if It was sustainable maybe it'd be worth Looking into or at least pruning these Things out of the the chain because it Does impact your ability to run a node Right if it's clogged up with a lot of Extra data but I don't think it's going To last very long so I don't think by The by the time there's a solution Worked out it'll have Fade Away faded Away because of that can grab you on our Show again thank you Giovanni it's been Fun