Technology drives finance, the underlying logic under the hype of Inscription

The underlying driver under the hype of Inscription Token

How to find coins with value or hype value? The author has always adhered to a core concept - technology drives finance, which means that many of the currencies that can continue to skyrocket have a certain relationship with the development of technology itself. Along with the sudden wealth effect, fomo sentiment will also spawn an early batch of interesting tokens. However, when technology stagnates or reaches a bottleneck period, and the bubble is too big, certain adjustments will inevitably occur. Judging from the short history of the development of Inscription, the more representative Inscription tokens are Ordi, sats, rats, Atom, Pipe, etc., each of which also represents the evolution and development of the Inscription protocol to a certain extent.

At the end of 2022, Bitcoin core contributor Casey Rodarmor created the Ordinals protocol. On March 8, 2023, an anonymous developer named @domodata launched BRC-20 based on the Ordinals protocol, of which Ordi is the first BRC20 token. . After the release of Ordinals, another anonymous developer launched the Atomics Protocol in September. On September 26, Casey created Runes, a homogeneous token protocol based on Bitcoin. These two protocols are more important than BRC-20. The improvement is that it is based on UTXO technology, so Atom is also more optimistic by the market. In addition, a community developer named Beny has successively launched the BRC-20 proxy printing tool LooksOrdinal (no token), the BRC-20 improved Tap Protocol positioned at OrdFi, and the improved version of Runes Pipe.

In addition to the several tokens developed together with the Inscription protocol above, the Inscription token sats has the same concept as the smallest unit of BTC (a good name), and it can serve as the gas fee for the L2 BRC20-swap launched by Unisat. Rats belong to the leading token of the zoo concept Meme, and the community consensus is strong. They may be the same wave of fans who made the zoo concept popular before.

From the above analysis, we can see that truly valuable or hype-worthy tokens still have a certain relationship with technological development. From this perspective, looking for inscribed tokens for speculation may be more likely to make you “get rich”. If you just hype some replica inscription tokens, it is expected that it will be difficult to gain widespread attention. In addition, those with community foundation and application scenarios are also worthy of attention, among which rats and sats are representatives.

What impact will the popularity of Inscription have on mainstream public chains?

From a practical point of view, inscriptions are actually progressive for Bitcoin. After the Bitcoin network undergoes a certain expansion, this is a demonstration of a new use case. Previously, Bitcoin core developer Luke opposed inscriptions, but the essence was that he did not agree with the development of the Bitcoin chain, but he did not object to Bitcoin Layer 2, such as the previous Lightning Network and side chains. However, compared to other public chains, Inscription is really a thing with no technical content, and the content of this hype is particularly high. It is completely a follow-up hype at the financial level. Eventually, the inscription tokens on the public chain may return to zero.

At present, although the inscriptions on the public chain have no practical value, from a certain perspective, they are a test of the performance of many public chains. In fact, there are currently no hot-selling applications in the blockchain industry. Without such applications, it will be difficult to truly test the performance of many public chains. Without superior performance, it will still be a problem for developers and users. A conceptual hype thing. However, the inscription hype is actually a good test, which can also provide some reference data for the emergence of popular applications in the future. Let’s take a look at the performance of each chain:

The modular blockchain Celestia launched its first inscription project CIAS. After CIAS officially launched mint, it received more than 1 million visits from more than 120,000 people within one hour. More than 50% of the transactions on the Celestia chain were related to CIAS. ; Later, his team issued a document stating that RPC had encountered a failure and announced the suspension of mint.

On December 8, Tonado introduced the Inscription Protocol, which was followed by a surge in on-chain activity and long delays in transaction processing on the TON network. According to monitoring data from the blockchain status monitoring robot dTON, starting on December 5, TON 20’s inscription generated more than 2 million transactions in just half an hour, and network usage increased 61 times; this sudden peak The traffic caused severe congestion on the TON network, causing severe delays in verification even though network validators were still generating blocks.

The public chain Conflux has also experienced the same stress test. According to ConfluxScan data, affected by the inscription activity, on December 15, the number of transactions in Conflux in a single day reached 1.788 million, and the number of active accounts on that day reached 17,700.

On December 18, @cryptofishx, the co-founder of Trader Joe, the largest DEX on Avalanche, issued a document launching the asc-20 standard inscription (Avascription) BEEG, which enabled the inscription project on Avalanche to indirectly assume the role of a stress tester.

On December 16, due to the surge in user volume brought about by the Inscription protocol, Arbitrum officials stated that the Arbitrum One sequencer stopped running at 10:29 a.m. Eastern Time, and the network was down. According to Arbiscan data, on December 15, the number of transactions on the Arbitrum chain surged to 4.39 million, setting a record high. Another major Layer 2 zkSync, on December 17, during the casting of SYNC inscriptions, the zkSync network also experienced a short-term “downtime”

The operation of inscription casting is not complicated in nature. It seems to be a transaction with zero transfer. However, judging from the data, each chain still experienced congestion and downtime when faced with the crazy influx of users. In the early stages of the bull market, with the participation of mainly cryptocurrency users, the performance of mainstream public chains still has a lot of room for improvement. Only in this way can we truly seize the opportunity when Web2 users flock in.

How Inscription Tokens Will Develop in the Future

The development of Inscription has certain progressive significance for Bitcoin, but for other public chains or Layer 2, it is more like an application performance test. From the perspective of value, the popularity of inscriptions is the appetizer for Bitcoin to begin to expand into applications. In the end, there is a high probability that inscriptions on the chain will not exist. Bitcoin core developer Luke has made it clear. In the end, the real value in the Bitcoin application field should be Layer 2 and side chains. For other public chains, they are currently in a critical period of application development. How to develop Dapps that challenge traditional Web2 applications is not simple. During this “empty window”, the inscription hype on mainstream public chains can only be regarded as a performance test of the infrastructure, and the probability of its destruction is extremely high. For inscriptions on the Bitcoin chain, it may compete with Meme tokens such as Doge in the future.

Disclaimer: This article does not constitute investment advice. Users should consider whether any opinions, views or conclusions in this article are consistent with their specific situations, and comply with the relevant laws and regulations of the country and region where they are located.

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