Introduction

The Bitcoin ecosystem has seen a lot of innovations in the past months, starting from the introduction of ordinals to the blockchain ecosystem. These innovations are geared toward solving one or more network limitations, such as the cost of transactions, transaction speed, or scalability.

Ordinals were introduced to bring about a new utility for the Bitcoin blockchain, which led to the creation of other token standards like BRC-20. Still, the original Bitcoin design, with a blockchain limit of 1 MB, was amended to 4 MB per block. This limitation reduced the possibility of inscribing complicated data on Bitcoin. This problem was compounded by the exorbitant cost of inscribing such complex data.

Recursive inscriptions were created to solve the storage and cost problems. Recursive inscriptions allow the developer to bypass the 4 MB limitation by creating a network of data sources, which, when interconnected, can be used to create sophisticated programs.

What are Recursive Inscriptions?

The recursive inscription is an innovative feature on Bitcoin that allows the creation of complicated data infrastructures in the Bitcoin ecosystem by utilizing Ordinals. Recursive inscriptions were introduced to the blockchain space on the 12th of June, 2023. On that day, the chief maintainer of the Bitcoin Ordinals protocol integrated the recursive inscription proposal (#2167) into the Ordinals codebase. This integration unlocked the possibility of referencing inscriptions like texts and images on the blockchain.

Ordinals are unique inscriptions on satoshis. Recursive inscriptions allow new inscriptions to access and use the data in older inscriptions by calling on the data within the inscription. This data can render pictures, elements, and high-quality assets at a fraction of the size and cost.

Origin and Development

Source: ChainLink’s Website

The initial design of the Bitcoin blockchain was to transfer value in a decentralized way. Before introducing the Taproot upgrade, the blockchain was solely focused on transferring value.

This is the reason the majority of the NFT space didn’t readily think of Bitcoin for minting and conducting activities in the NFT space, preferring Ethereum or polygon for such projects, even though NFTs were introduced into Bitcoin in 2009 with Satoshi Nakamoto’s “chancellor on the brink of bailout” inscription.

The Taproot Upgrade converted the simple yet costly Bitcoin transaction into a means of storing complex data. It introduced technologies like Merklet trees and Schnorr signatures that aim to improve the security and capacity of the blockchain, which paved the way for the creation of Bitcoin Ordinals.

Bitcoin Ordinals are created by inscribing unique data onto individual Satoshis, but these inscriptions, which represented tokens or NFTs, were completely independent, unaware of each other. The solution to this was called Recursive Inscriptions.

As the name implies, recursive inscriptions are a means for inscriptions to call on themselves, reference themselves, or reuse the data stored in prior inscriptions. The current application of recursive inscriptions requires a syntax similar to programming instructions given to machines. It requires the developer to expressly state the location and format of the data, stating how it would be referenced.

The concept of interconnecting inscription data allows developers to create complicated programs on the blockchain like video games, software, DeFi platforms, and others, expanding the use case and adaptability of the Bitcoin ecosystem.

How do Recursive Inscriptions work?

Recursive inscriptions allow inscriptions to access and retrieve data from connected inscriptions while maintaining their security protocols and flexibility for future modifications. To achieve that, changes were made to the Content Security Policy (CSP), and a new endpoint was added.

The CSP is a security feature that influences how resources are broadcasted or modified. The feature allows requests to endpoints that start with the prefix “/-/,” and these inscriptions can call specific endpoints using “/content/<INSCRIPTION_ID>.” \
The endpoints are source codes for inscriptions, which users can tweak and turn into recursive inscriptions. Such tools as Ordiscan allow users to paste the inscription address on the search bar, find the “view source code” image, and copy the source code.

The new CSP changes allow inscriptions to decide how many requests can be made to itself and how many requests are made to other inscriptions. The project chooses to use the “/-/” syntax for flexibility, and it allows the use of Web2 infrastructure like Google and Firefox.

Recursive Inscriptions can be incorporated into basic HTML programs and run on browsers like Google, not Safari. This is because Safari doesn’t correctly implement multiple CSP headers, an issue the community aims to address in the future.

The Benefits of Recursive Inscriptions for the Bitcoin Network

Recursive inscriptions have some potential benefits for Bitcoin, which is why the innovation has been causing a stir in the Bitcoin community.

Data Storage

The first benefit is its effects on how the Bitcoin ecosystem handles large amounts of data on the blockchain. The 4MB limit has directly affected the extent of innovation possible on Bitcoin’s blockchain. Recursive inscriptions help to solve this by bypassing that limit and introducing complex data structures. This is done by referencing existing data, making it possible for developers to manipulate basic data.

This would allow projects like video games, audio files, DeFi, and “Smart contract-like” projects to be built on the blockchain.

Supporters of Ordinals and recursive inscriptions have pushed the possibility of inscribing libraries, archives, and databases that other developers can reference and call. This would allow them to build permanent, censorship-resistant libraries, fostering more open and secure information sharing.

Efficient Block Utilization

Recursive inscriptions allow developers and their projects to reference existing data instead of duplicating it. This significantly reduces the amount of information that needs to be stirred in each block, freeing up space for more projects and inscriptions.

With the reduced need to inscribe on blocks, proponents of recursive inscriptions assume that smaller inscriptions translate to lower transaction fees, making on-chain transactions more affordable.

Scalability

Recursive inscriptions allow the community to handle data better, optimizing it for applications that wouldn’t have existed due to the block limit. This flexibility allows for integrating new features, use cases, and functionalities as the network evolves.

By leveraging the security and immutability of Bitcoin, developers can create virtual worlds and on-chain games that would not have been otherwise possible.

The Potential Downsides of Recursive Inscriptions

Recursive inscriptions are an innovative addition to Bitcoin, but not every community member is fully in support.

Centralization

The first issue critics of recursive inscriptions have is the possible centralization of Ordinals and its future structure implications. Ordinals are inscriptions on Satoshis that Bitcoin views as any other token that can be used to pay for fees and conduct transactions because the Ordinals feature is not part of Bitcoin’s core features, nor is it activated in Bitcoin’s consensus.

To maintain Ordinals, a centralized group of developers is responsible, which could lead to arbitrary changes in the underlying infrastructure, leading to disruptions in the software or misdirection of files.

Since recursive inscriptions are built on these Ordinals, any disruptions in the Ordinal structure would directly affect the recursive inscription project.

Cost Efficiency

Proponents of recursive inscriptions claim the innovation would reduce the cost of transactions on Bitcoin, but critics disagree. Although the cost of each inscription transaction might experience some cost-savings, the net effect expected on the blockchain might drive up the overall cost of conducting a transaction on Bitcoin.

During the initial launch of Ordinals on Bitcoin, the innovation sprang in popularity, leading to the creation of millions of Ordinal assets. This popularity is expected to onboard millions of users to the inscription space, leading to higher transactions and transaction costs.

With pictures, Memes, movies, libraries, codes, repositories, and other types of data piling on Bitcoin, users who aim to conduct transactions or pay for a purchase in Bitcoin would have to pay higher premiums per transaction, which isn’t cost-efficient overall.

Projects Building with Recursive Inscriptions

The Bitcoin community has responded to the introduction of recursive inscriptions by building projects on Bitcoin.

PixelWar

Source: PixelWar’s website

PixelWar is a multiplayer game on Bitcoin based on recursive inscriptions. The project is a social experiment built by an anonymous team of developers that aims to create an exciting online gaming experience for its users.

The project allows users to create PixelWar canvases (256 x 256) by uploading a picture or manually building it pixel by pixel. These PixelWar canvases are inscriptions that form a recursive chain, currently making PixelWar a project with one of the highest recursions.

The project uses a new standard, BRC-721, which uses recursive inscriptions to record the processes and products of each user.

OrdinalsBot

Source: Ordinalsbot’s Medium

OrdinalsBot is a project that allows users to inscribe collections on Bitcoin.

The cost of these inscriptions has previously been a limitation that forced users to optimize their collections by reducing the resolution and compromising the quality of the artwork.

By incorporating recursive inscriptions, collections can be made without compromising their quality. This is done by inscribing each trait in its original form on satochis using lossless optimization. Then, using recursive inscription, the project creates an HTML file that pulls these traits to rebuild the artwork.

The result is an artwork on Bitcoin that looks exactly like the original at a fraction of the size and cost.

Conclusion

Recursive inscriptions allow Bitcoin to store complex data for creating diverse applications like video games, libraries, and DeFi projects.

It is designed to improve data storage, block utilization, and scalability on Bitcoin, with the drawback of potential centralization and overall higher cost.

With projects like PixelWar and Ordinalsbot building with reclusive inscriptions, the potential use cases for the feature are high.