The nearly 4M largest transaction ever made was contained in the nearly 4M largest block ever mined by the Bitcoin Network on February 1st, 2023, and the transaction cost was zero.
Independent developer @udiWertheimer’s “Taproot Wizard,” an NFT project on the Bitcoin network, sent the significant transaction. The major piece of information is an NFT, not a hash, but the whole jpeg file.
The incident has caused a significant shock to the Bitcoin ecosystem; Blockstream CEO Adam Back (@adam3us), Bitcoin Core developer @LukeDashjr, and others have called it an attack on Bitcoin. The developer and project involved have not been identified.
At the same time, @udiWertheimer emphasizes that this is an innovation based on “Ordinals,” which were suggested by Casey Rodarmor, a former Bitcoin core developer.
According to @udiWertheimer and Casey Rodarmor, the theory can tag and transfer each satoshi, the fundamental unit of currency in bitcoin. NFT is just one of several strategies for expanding the capabilities of the Bitcoin network without the need for a hard fork or a soft fork.
Last night, we made history
The gatekeepers tried to censor us
But we mined the LARGEST BLOCK and LARGEST TRANSACTION IN BITCOIN’S HISTORY
Special thanks to bitcoin full node operators for supporting our efforts and hosting our 4MB NFT for all eternity!
— Udi Wertheimer (@udiWertheimer) February 2, 2023
According to Rodarmor, Bitcoin’s absence of a reliable public identity is why Ordinals were created. Bitcoin wallets typically have local storage, single-use addresses, and non-transferable public and private key ownership. As a result, Ordinals gives Bitcoin a transferrable account or identity by marking each satoshi in each output.
In order to implement the identification and distribution of the NFT, the publisher is required to use a specific Satoshi to refer to jpg images in the NFT project “Taproot Wizard.” I’m not entirely sure how this is accomplished.
Although it’s a fascinating innovation experiment, bitcoin core doesn’t like it for a few reasons:
1. Blockchain size inflation: This will cause the size of the Bitcoin blockchain to rapidly increase, significantly raise the system requirements for full-node-capable devices, reduce the network’s full-node capacity, and weaken anti-censorship. This was the primary justification for both the 2017 rejection of hard fork expansion and the 2014 rejection of Vitalik’s smart contract in OP RETURN.
2. Ecological impact: Large transactions and large blocks that exceed expectations have an adverse effect on wallet, mining pool, browser, and other ecological facilities, causing some of them to behave abnormally, such as the transaction of btc.com browser that failed to parse correctly.
3. Reduce security: The mining pool or individual miners may decide not to download and release blocks without first verifying the transactions and blocks in order to shorten the time required for synchronization and verification of large transactions and blocks, which poses security risks.
4. Block size limitation is broken: Taproot Wizard’s 4M data is linked to witness, allowing both blocks and transactions to exceed the 1M limit, and it appears that there is no longer a limit! 400M is fine, 4M is fine! That is why it isn’t innovation, but rather an attack on the bug.
Bitcoin Core decided to employ segwit to move the verification information outside the block in order to circumvent the 1M block limit and achieve partial expansion during the 2017 expansion debate instead of expanding through a hard fork to extend the block limit. The verification message’s length was not constrained, though. Now, tough decisions must be made:
1. Take no action and permit applications to enter the Bitcoin blockchain in this manner, rendering the discussion about OP RETURN limitations and capacity expansion meaningless;
2. When performing a hard fork upgrade, add the consensus with the data size limit that was observed in isolation. This is also challenging. The New York Consensus upgrade to 2M in 2017 was rejected mostly because to the impact of the hard fork and the necessity of updating all nodes.
3. Come to an imperfect agreement on major pools and disapprove of big blocks and big tx. This is awful. It undermines the feeling of decentralization, allows for human block inspection, and is challenging for all pools to implement.
Overall, option 1 is more likely because option 3 is challenging to implement and because a smooth hard fork would be challenging given the size of the Bitcoin ecosystem.