BTC inscriptions enhance the average size of digital currency blocks; How does this affect blockchain.

Small influence of inscriptions on block size of special coins

Recently, BTC has appeared "inscription" on the network, which is basically an application of BTC blockchain, similar to irreplaceable token (NFT), but not the same.

Unlike NFT in other blockchains such as Ethereum, this inscription is immediately printed on the BTC blockchain (hence its name). The inscription can be data information, image, audio, short video, or even mobile phone software.

Considering that they are immediately stored on the blockchain as transactions, they have expanded the scale of chain operation. This also makes this property a hot topic in the community about the future impact of digital currency.

In the new statement, Glassnode, a chain analysis enterprise, showed the impact of this new BTC application software on the Internet. One obvious implication is that the block size is close to the tail limit.

As for the impact on the total size of the blockchain itself, since December 15, 2022 (when it first appeared), the trading of inscriptions has increased by 1.74GB, as shown in the figure.

Compared with the total size of the BTC blockchain of 444GB, the inscription is enhanced by about 0.4%. Most of this improvement comes from image inscriptions. It is not surprising to fully consider that they are the most popular types.

In general, 93.3% of the information traces come from images, while the text inscription (the best one below) contributes about 4.59% to the improvement. The information of audio, video and other inscriptions has little trace.

However, in terms of the average size of BTC inscriptions, the audio and interest tags are huge. Their traces are still the least, because compared with images or words, their frequency is significantly reduced.

At this stage, inscriptions only account for 4.2% of all transactions on the Internet, but when you query their block-size market share, you will find some interesting things.

At this stage, although it only accounts for 4.2% of the sales and sales transactions, the inscription accounts for 47% of the interior space of the block, which shows how rich and colorful the information of this type of transaction is. In its heyday, inscriptions accounted for 60% of the block size.

Glassnode noticed that when the inscriptions appeared, most of the blocks were empty, and trading only accounted for 25-50% of the usable block area.

The report explained: "Since the occurrence of the inscription, such things have changed greatly. The contrast of the block now generally exceeds 80-90% (3.2-3.6MB).". "Because the block interior space cannot be stored for future application, the inscription can be regarded as the consumer of the block interior space, otherwise the block interior space will be empty at last."

Because that is only the impact of the inscription on the blockchain of Bitcoin at the current stage, a problem still exists: what is the long-term impact on the chain volume? In order to solve this problem, Glassnode developed a model for the three block size assumptions of BTC in the next 14 years.

The three block size assumptions (based on which the simulation is based) are as follows: 1.35MB (which is also the block size of the maximum value of 30 days before the inscription), 2.50MB (the average value of the maximum value after the inscription) and 4.00MB (the basic theoretical limit).

Assume that the basic theoretical limit scenario is as follows: by March 2037, the business scale of BTC blockchain will increase to 3.41TB. According to the current hard disk quotation, the computer hard disk required for storing such size files only costs 120 dollars. This means that the impact on the demand of the on-chain file storage market is likely to be insignificant in the future.

BTC price

At the time of writing, the transaction price of Bitcoin was about $24900, up 10% last week.