Understanding the Bitcoin Ecosystem Intellectual Class: From BRC20 to Taproot, Are You a "Bronze" or a "King"?

Words: Jaleel, BlockBeats

With the birth of Runes protocol and the outbreak of the third round of Bitcoin ecology, more and more long communities have paid attention to the Bitcoin ecology, but the biggest confusion of the long is still "the threshold for Bitcoin ecology is too high", because BlockBeats has sorted out the various terms of Bitcoin ecology into five intellectual classes, and unveiled the veil of Bitcoin ecology layer by layer.

Beginner: A theme that is familiar to all long Bitcoin ecological novices

1. Ordinals

Ordinals protocol focused on minting NFT on the smallest unit of Bitcoin, the satoshi, taking advantage of Bitcoin Taproot upgrades so that each satoshi can represent a unique digital asset. Ordinals takes advantage of the inherent nature of Bitcoin Blockchain so that each satoshi can uniquely represent a digital asset, bringing functionality similar to NFT on Ethereum to Bitcoin networks without the need for any additional layers or tokens.

2.Casey Rodarmor

Casey Rodarmor (@rodarmor) is a programmer and Bitcoin developer, and the creator of the Ordinals protocol and Runes protocol. With the development of the Ordinals protocol, Casey offers a new way to store and transfer non-coin data, such as digital artwork, directly on the Bitcoin Blockchain, and arguably without Casey there would be no Bitcoin ecosystem.

Source: Ordinals summit 2023

3.BRC-20

BRC-20 is an experimental standard for creating and transferring fungible tokens on the Bitcoin network. It was introduced in March 2023 by anonymous developer Domo and aims to mimic Ethereum's ERC-20 standard. Unlike ERC-20, which uses smart contracts, BRC-20 Tokens are created by burning JSON data on the satoshi (smallest unit) of the Bitcoin network.

4.Domo

Domo (@domodata) is the creator of the BRC-20 protocol, which has been anonymous since the development of the BRC20, and has also created a fund, the Layer 1 Foundation, to help with the governance of BRC20.

Source: Ordinals summit 2023

5.Runes

Runes is a new Bitcoin protocol developed by Casey Rodarmor, the creator of the Bitcoin Ordinals, and unlike the Ordinals terminology issuance NFT Runes is used to issuance alternative Token on Bitcoin networks. It allows users to create, minting, and transfer Token directly in the Bitcoin UTXO model, without relying on any centralized services or intermediary. Runes optimized the BRC-20 protocol by combining the original minting and listing into one.

6.Atomicals

The Atomicals protocol allows the creation and management of digital asset named ARC-20 on Bitcoin Blockchain. These assets use the UTXO model and can store longest files, making them available for more complex use cases. Unlike BRC-20 and Ordinals, Atomicals' AVM is designed to provide greater flexibility and scalability, enabling smart contracts-like functionality and supporting more complex digital asset management. Compared to Casey and Domo, Arthur, the author of the Atomicals protocol, is more anonymous, never shows up or appears at offline events, and only gives a few audio "appearance" interviews.

7. Gas fee

When users make Bitcoin transactions, they pay Miners a fee to include their transactions in a Block. gas fee is the Money Laundering of the Bitcoin network, ensuring Miner financial incentives to support the operation and security of the network.

Tier 2: Longest Topics familiar to Bitcoin ecosystem players

1. Bitcoin Halving

Bitcoin Halving refers to the Halving event that Bitcoin Mining reward, occurring every 210,000 Block generated, approximately once every four years. The main purpose of the Halving is to control the issuance of Bitcoin, which is part of Bitcoin's design to simulate the gradual reduction in the mining rate of scarce resources such as gold. Halving directly affects the incentive structure of Miners and is considered to have a significant impact on Bitcoin prices. The most recent Halving is April 20, 2024, and the next Halving is expected to be in February 2028, with a block height of 1,050,000.

2.Satoshis

Translated in Chinese as Satoshi, the smallest unit of Bitcoin, 1 Bitcoin is equal to 100,000,000 satoshi. Since the value of Bitcoin can be very high, satoshi offers a smaller unit of coin, making microtransactions possible.

3. Hashrate

Hash rate refers to the number of times per second that all Mining devices in the network attempt to resolve a Block hash, usually expressed in hash per second (H/s). The hashrate is a key indicator of the security of Bitcoin's network, and a higher hashrate means higher computational difficulty and security.

4.POW

Full name Proof of Work, PoW. This is a Cryptography Algorithm used to prevent misuse of network services, such as spam or distributed denial-of-service attack. Bitcoin's PoW requires Miners to solve a complex mathematical problem that is automatically adjusted in difficulty to guarantee that the entire network produces a new block approximately every 10 minutes. Miners who successfully solve the problem can add new blocks to the Blockchain and receive new Bitcoin as a reward. This process not only protects the network from attacks, but also serves as a mechanism for Bitcoin the coin issuance and circulation of goods.

5.UTXO

The full name Unspent Transaction Outputs, which refers to the Unspent Transaction Output, represents the amount of Bitcoin in the Bitcoin network that can be used as input for new transactions. The Bitcoin transaction model is based on UTXOs, where each transaction begins by referencing the output of a previous transaction as its input and ends with the creation of new UTXOs, which can be used by future exchange.

6. Lighting Network

Lightning Network, a "Layer 2" payment protocol built on top of Bitcoin Blockchain, is designed to enable instant, high-throughput micropayment. The Lighting Network makes making micropayments economical and fast by creating a network of payment channels to reduce transaction congestion and fees on the Blockchain.

Level 3: A topic familiar to experienced Bitcoin ecosystem OG

1.Nostr

Nostr is a simple Decentralization Social Web protocol that uses Secret Key pairs to allow users to create and manage their own identities and communicate through events such as posts, contact information, and other social interactions. Founder Fiatjaf (@fiatjaf), while the protocol is not directly linked to Bitcoin, it has received a lot of attention from Bitcoin supporters because it represents a Decentralization and censorship-resistant way of communication. In April 2023, Nostr Assets Protocol, a Lighting Network "hosting solution", also adopted the name Nostr.

2.BIPs

Full name Bitcoin Improvement Proposals, Bitcoin Improvement Proposals. Refers to a Bitcoin community-driven design document that suggests improvements to new features, information, or environments for review by the Bitcoin community. BIPs are an important part of the Bitcoin development process, and they provide a formal path on how to improve the Bitcoin network.

3.Mempool

Memory pool, Mempool refers to the collection of all uncomconfirmeded transactions held on a Bitcoin network Node. This term is short for "Memory Pool". When a transaction is sent to the Bitcoin network but has not yet been included (confirmed) by any block, the transaction is in the Mempool. Miners select transactions from the Mempool to create new blocks, often preferentially selecting transactions with higher fees.

4. Rare Satoshi

Rare Satoshi is not the official term of the Bitcoin network, but a unique collectible Satoshi that appeared after the birth of Ordinals and is related to the specific block time of Bitcoin. The constituent unit of Bitcoin is Satoshi, and each Bitcoin is made up of 100 million Satoshi. The scarcity and particularity of Satoshi can be determined by ordinal theorists, which gives Satoshi special meaning, whether it is a Bitcoin dug up by Satoshi Nakamoto, the first Satoshi of a certain Block, or the Satoshi used to buy pizza.

5. Bitcoin Full Node

Bitcoin Full Node is a full client running Bitcoin protocol that maintains a complete copy of Blockchain data. Full Node validates all transactions and blocks, ensuring that transactions and blocks comply with Bitcoin's rules. Bitcoin Full Node is critical to the health and Decentralization of the network. They help decentralize the power of the network, ensuring that no single entity can control or tamper with Bitcoin's transaction history. Full Node also improves the security of the network, as the more long the Node validates transactions, the more difficult it is to manipulate the entire system.

FOURTH ESTATE: OFFICIALLY GO DOWN THE XTZ HOLE

1.index index

In the context of Bitcoin, "index" or "index" usually refers to a structure in a Blockchain database that is used to quickly retrieve data. For example, the transaction index (txindex) is an optional feature that allows Nodes to create an additional database to store the Metadata of each transaction, including their location in the Blockchain. When transaction indexing is enabled, Nodes can access information about any transaction faster, which is useful for developing applications and services, especially those that need to provide extensive Blockchain data queries.

2.OP_RETURN

OP_RETURN is a Operation Code in the Bitcoin scripting language that allows a small piece of data (currently capped at 80 bytes) to be embedded in a Bitcoin transaction. The data itself is not expendable, so it will not be used as part of the input. OP_RETURN is primarily used to add Metadata to transactions, which can be used for long applications, such as proving that data exists at a certain point in time (Timestamp service), adding simple messages, or implementing more complex Blockchain-layer applications. Since this data is permanently recorded on the Bitcoin Blockchain, it provides developers with an immutable data storage option.

3.Schnorr Signature

The Schnorr signature is a Digital Signature Algorithm that was proposed by mathematician Claus Schnorr. In the Bitcoin, Schnorr signatures were introduced through a Taproot upgrade and are designed to replace or coexist with the existing ECDSA (Elliptic Curve Digital Signature Algorithm) signature scheme. Schnorr signatures offer longest advantages, including simpler signature aggregation, enhanced privacy, and greater efficiency. Signature aggregation allows longest signatures to be dropped into one, reducing data volume and Money Laundering. In addition, it improves support for longer signature transactions, making transactions involving longer parties look indistinguishable from normal transactions, enhancing privacy.

Fifth Estate: The most esoteric knowledge of the Bitcoin ecosystem

1. SegWit

The English name SegWit or Segregated Witness refers to an upgrade of the Bitcoin protocol designed to solve the problem of deal scalability and deal scalability. SegWit increases the effective capacity of Block by "isolating" signature information from transaction data, and reduces the size of each transaction to a certain extent, increasing network throughput.

2.PSBT

Partially Signed Bitcoin Transactions, Chinese a Bitcoin transaction called Partially Signed, which is a standard format for transferring incomplete transactions between different participants in order to be signed. It enables longerer parties to work together to create, sign, and send transactions without exposing the private key to other participants.

3.RBF

Replace-by-Fee, a mechanism that allows the sender to replace the original transaction by increasing the fee before the transaction is confirmed by the Blockchain. This mechanism is often used to speed up the confirmation of transactions, or to correct unconfirmed transactions where fees are set too low due to hand errors.

4. "RBF" Sniper

RBF has spawned the "RBF" attack, which is a sniper tactic to earn money. Users monitor unconfirmed low-fee transactions in an attempt to replace the original transaction by submitting the same transaction at a higher rate by using the RBF mechanism. This is often used by mining pools or individual miners looking to increase their earnings by withdrawing higher Money Laundering.

5.Taproot

Taproot is an important upgrade to the Bitcoin network, primarily enhancing privacy and scalability, through a combination called MAST (Merkelized Abstract Syntax Trees) and Schnorr signatures. Taproot improves privacy by making complex transactions look like ordinary transactions on the Blockchain. In addition, it improves the scalability and efficiency of the network. It can be said that it is precisely because of the Taproot upgrade that the Bitcoin ecosystem can begin.