A New Frontier for Bitcoin? Recursive inscriptions explained

The Bitcoin community is buzzing with the rise of something called recursive inscriptions. A new development building on the continued hype of the Ordinals protocol, Recursive Inscriptions looks set to both disrupt the growing Bitcoin NFT ecosystem and redefine the parameters of blockchain-based file storage as we know it.

But how? And why should the NFT room care? Let’s explore.

What are recursive inscriptions?

Recursive inscriptions can seem a bit complex. But unsurprisingly, they have everything to do with the Ordinals protocol. Aa’s refresher, the Ordinals protocol was first introduced to the world on January 21, 2023, by software engineer Casey Rodarmor. It offered a unique way to enter data in Bitcoin’s smallest unit, satoshis (or sats). The resulting Ordinal Inscription is comparable to an NFT, but with the significant difference of being completely on chain.

Recursive inscriptions build on this concept, providing a potentially groundbreaking method for expanding the Bitcoin NFT network. Each Ordinal can store up to 4MB of data directly on Bitcoin’s blockchain. This has long been the maximum capacity for Bitcoin, albeit one that has recently been challenged by Taproot Wizards and Smart Inscriptions.

Yet, through Recursive Inscriptions, developers now find it possible to create an intricate web of interconnected data sources, meaning that Ordinals no longer need to exist as closed, 4MB-capped silos.

This is because a recursive inscription is essentially a complex mechanism that extracts data from existing Inscriptions and uses it in new. By connecting data through a series of conversations, developers have found it possible to run software entirely on the chain. Which, needless to say, has huge potential for interoperability on the Bitcoin network.

The potential of recursive inscriptions

We are already beginning to see the potential of recursive inscriptions realized by projects like OnChainMonkey. As mentioned in the tweet above from self-proclaimed NFT historian and Ordinals collector Leonidasthe growing multi-chain project inscribed a series of data packets on Bitcoin as Ordnals, and “then used recursion to call these packets from Inscriptions in their upcoming Dimensions release, allowing them to create beautiful 3D art in under 1KB.”

Enthusiasts of recursive inscriptions, such as Leonidas, have championed their potential to not only increase the use of Ordinals, but also to reduce transaction costs by reduce the volume of data written into each satoshi. This ability to recycle stored data using recursion may very well eliminate the need to store duplicate file copies, leading to a significant increase in storage efficiency.

In particular, the storage efficiency and interoperability achieved by recursion can even lead to the facilitation of the hosting of extensive files, such as video games, movies or complex software, all directly on the Bitcoin blockchain.

But beyond IP and entertainment, proponents have also emphasized the technological possibilities that the innovation of recursion can create. Namely, recursive inscriptions can promote the implementation of permissionless contracts, enforced by Bitcoin’s persistent storage, without requiring new cryptographic measures. This will mean that developers can call upon existing repositories of Inscriptions to bypass the current 4MB limit by using data already stored on another Inscription.

Recursive inscriptions critique

Of course, no innovation could exist without resistance. Mostly, critics of recursive inscriptions argue that the whole concept hinges on Rodarmor’s Ordinals theory, which is not built into Bitcoins core framework or agreed in consensus with the network.

As reported by Protoss, this dependency could potentially lead to arbitrary changes by a centralized group of developers, affecting software functionality or misdirecting file storage hashes. Furthermore, skeptics question whether recursive inscriptions could have a negative impact on data storage needs or transaction fees as their popularity grows and users increase. Although this general concern has long been expressed by Bitcoin factions against Ordinals.

Despite their nascent nature and doubts about scalability, recursive inscriptions undoubtedly mark a key moment in Bitcoin’s evolution. At the very least, the prospect of expanding interoperability and increasing storage efficiency is more than enough to reinforce the appeal of recursion. Of course, it remains to be seen how this technological advance will shape the future of Bitcoin, but it is clear that the stage is set for an exciting new chapter in blockchain history.

Editor’s note: This article was written by an nft employee in collaboration with OpenAI’s GPT-4.