Bitcoin Core vulnerability exposes network congestion, leading to the removal of Ordinals and BRC-20 tokens next year.
The crypto community is divided over Bitcoin developers’ decisions, and miners benefit from the tokens’ existence.

Bitcoin Core developer Luke Dashjr’s recent announcement has stirred the cryptocurrency community. He revealed a significant vulnerability within Bitcoin Core, the software underpinning the Bitcoin network. A feature known as ‘Inscriptions’ has exploited this flaw, causing severe network congestion. Dashjr highlighted that the upcoming v27 update, slated for next year, would address this issue.

So if this “bug/vulnerability” is fixed, does it mean ordinals and brc-20 token would stop being a thing??

I’m confused, someone pls explain the implications to me like I’m 5

— Jaspee (@Jaspee_X) December 6, 2023

 

This revelation has profound implications for Bitcoin’s network, particularly regarding Ordinals and BRC-20 tokens. According to Dashjr, the fix of this vulnerability will lead to the obsolescence of these tokens. This information has sent ripples through the cryptocurrency market, with the ORDI price witnessing a sharp 15% decline within an hour of the announcement.

Community and Miner Reactions

The decision to phase out Ordinals and BRC-20 has not been received favorably by all. Many in the crypto community, especially miners, have expressed their dissent. They argue that introducing Bitcoin ordinals and BRC-20 tokens has benefited miners, notably improving their profits. This move by Bitcoin developers has sparked a debate about the decentralization and decision-making power within the Bitcoin ecosystem.

Shenyu, the co-founder of f2pool, commented on the fundamental difference between Bitcoin and Ethereum regarding governance and developer influence. The discontent also stems from the forced consent to accept inscriptions, which many view as spam, affecting the blockchain’s efficiency.

Technical Details and Network Impact

The crux of the issue lies in the manipulation of transaction data sizes. Inscriptions have found a loophole to exceed the “datacarriersize” limit set within Bitcoin Core by disguising extra data as program code. The Bitcoin Knots v25.1 release addressed this bug, but the forthcoming v26 version of Bitcoin Core remains vulnerable.

The network congestion caused by this exploitation has led to a backlog of over 250,000 unconfirmed transactions, as per data from mempool.space. The situation has also affected Bitcoin transaction fees, causing them to escalate significantly. For example, Upbit, a cryptocurrency exchange, reported delays in BTC withdrawals due to network congestion.

BTC Stabilizes Around $43,500

Recently, Bitcoin’s value has experienced a notable upswing as market bulls strive to recover from previous losses in the bear market.

Remarkably, the cryptocurrency has witnessed an increase of over 25% in value within the last 30 days, registering a significant 162% growth year-to-date (YTD). The sharp decline in 2022, driven by broader economic conditions like the Federal Reserve’s interest rate hikes and sector-specific events such as the collapse of the Terra Network and the FTX fallout, largely contributed to this surge.

Renewed interest from institutional investors, spurred by BlackRock’s application for a spot ETF, ignited this year’s growth momentum. This move led to a cascade of similar initiatives by other major firms, propelling Bitcoin’s price past the $31,000 mark and contributing to its current valuation. As of the time of writing, Bitcoin is trading at $43,000 with a 24-hour increase of 3%. 

Expectations for approving a spot Bitcoin ETF are rising, with multiple analysts forecasting a potential green light from the Securities and Exchange Commission (SEC). This speculation fuels predictions of a new investment wave in the cryptocurrency market.

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Filed under: Bitcoin - @ December 6, 2023 9:09 pm