From Bitcoin to EVM: Navigating Inscriptions

In the past few days, the blockchain ecosystem has been significantly disrupted by the widespread minting of inscriptions, a trend that originated with Bitcoin's Ordinals. Ordinals enable the embedding of various data types directly onto the Bitcoin network. For an extensive analysis of Bitcoin's Ordinals, our previous analysis offers in-depth insights and a technical overview. Notably, Ordinals presented a unique solution for Bitcoin to integrate NFTs and other token types, circumventing its inherent limitations due to the absence of many smart contract functionalities. The surge in Ordinals activities was primarily driven by BRC-20 tokens, a novel inscription convention to facilitate the creation and transfer of tokens on the Bitcoin blockchain.

As the concept gained traction, its application extended to Ethereum and other blockchains based on the Ethereum Virtual Machine (EVM). Here, inscriptions are implemented as embedded data within transaction calldata, similar to Ordinals on Bitcoin, echoing the flexibility found in ERC20s and NFTs on smart contract platforms. This approach, however, has deviated from traditional EVM design principles, presenting a trade-off where reduced gas costs come at the expense of challenges in indexing, integration, and compatibility.