Deciphering Rollup, Inscriptions, and SCP

These three concepts emerged from entirely different backgrounds and seem unrelated at first glance. However, they share significant similarities in their technical principles. This article will provide a deeper understanding of the technological essence of these concepts, including modular blockchain technology.

Rollup

Ethereum’s L2 evolution culminated in Rollup becoming mainstream. In Rollup, the Sequencer first collects and orders transactions, packages blocks, and forms a soft consensus on the transactions before submitting them to L1. Once verified by L1, a hard consensus is achieved. L1 verifies the data validity of the blocks submitted by L2. However, this cannot be done by re-running the transactions, as L2’s purpose is to expand capacity, and doing so would contradict its principle. Hence, methods like OP (fraud proofs) and ZK (zero-knowledge proofs) are used for ‘lazy’ verification. OP means L1, by default, doesn’t verify personally; any third party can do so. If they find discrepancies, they report to L1 for personal verification and punishment for fraud (as Sequencer’s deposit is locked in a contract deployed on L1). If no discrepancies are reported within a window, the transaction is deemed correct. ZK involves generating a validity proof for L1 to verify. If correct, the data is valid, effectively recalculating the entire block but at a much lower cost.

Inscriptions

Inscriptions can also be seen as a type of Rollup, transmitting data from off-chain to the blockchain, but L1 does not verify this data. For example, with the Ordinals protocol, I can inscribe a transaction on the Bitcoin blockchain, transferring 1000 ORDI without having any ORDI in my account, and the inscription will still be recorded.

{“p”:”brc-20”,”op”:”transfer”,”tick”:”ordi”,”amt”:”1000”}

Whether the inscribed data is valid or not, Bitcoin’s L1 accepts it all without verification, resulting in a ‘dirty ledger’ of valid and invalid data on Bitcoin. The orderly operation of the Ordinals protocol’s ledger is ensured by ‘client-side verification.’ Your wallet and browser read the ‘dirty ledger,’ exclude invalid data, and produce a clean ledger. Thus, the essence of inscriptions is off-chain consensus. Though off-chain and seemingly centralized, the Ordinals protocol is open-source, allowing anyone to generate consistent state records based on the ‘dirty ledger.’ Users unable to run the code can compare multiple wallet or browser clients to confirm inscription validity. Essentially, the Ordinals protocol defines data validity rules: dirty ledger + data validity rules = clean ledger. Inscriptions are not a new concept; early examples include Onmi-BTC and RMRK on Polkadot. BRC20’s popularity stems more from hitting emotional chords around Fair Launch and multi-party interest balancing than from technological innovation.

SCP

SCP, proposed by Arweave, is a storage-based consensus paradigm (SCP), an L2 paradigm aimed at separating blockchain’s computation and storage. This modular design predates the concept of modular blockchain. SCP and inscriptions are similar. In SCP, the blockchain serves only as a storage layer for state data without performing any computation or data verification. However, SCP requires that data validity rules be on-chain. Thus, the blockchain stores the ‘dirty ledger’ and ‘data validity rules,’ enabling everyone to produce a clean ledger based on on-chain records. Compared to inscriptions, the only difference in SCP is that data validity rules are on-chain, converting off-chain consensus, or social consensus, into on-chain consensus.

We find that Rollup, inscriptions, and SCP, though originating from different concepts, share many similarities. All three involve off-chain computation. Rollup and SCP are designed for expansion, reducing or eliminating computation on costly L1 blockchains. Inscriptions enable L1 blockchains without complex computation capabilities to support complex calculations. All three reflect the idea of modular design.

Understanding this, we can see that Bitcoin inscriptions are essentially an L2 expansion using Bitcoin as the DA layer, albeit not a complete L2 blockchain form. If the inscription protocol is complex enough, it could achieve Turing completeness and be expressed in chain form. Inscriptions and SCP, with their dirty ledger + off-chain verification approach, are better suited for storage-oriented public chains, especially those designed for DA (like Arweave, Celestia). Bitcoin inscriptions are limited because Bitcoin itself is not meant for storage; they work for memes but would be costly and difficult for a complete ecosystem. It’s like using a Tibetan Mastiff to grind grain when a mule would be more suitable. Let things serve their original purpose. While the author doesn’t fully agree with Luke Dashjr’s extreme views, the joy of playing with memes is important, but we shouldn’t expect Bitcoin inscriptions to develop a DeFi ecosystem. This view was also expressed in the author’s article “Developing an Ecosystem on Bitcoin is Like Drawing Blood from a Stone.”

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