Veda Protocol Indefinitely Postponed: Ordinals 'Vulnerability' Controversy Sparks Bitcoin Community Dispute

On December 10th, Ordinals expansion protocol Veda announced on X that the launch of the protocol would be indefinitely postponed due to force majeure, and Veda-core and Veda-bvm will be open-sourced. The purpose of the Veda protocol is to address the lack of L1 layer smart contracts in Bitcoin without changing the core consensus. Surprisingly, 2 hours before announcing the postponement, Veda had announced its imminent launch, had already formulated its token economics and token standards, and had been indexing its services for Ordinals. Subsequently, detailed personal information of the project's founder was publicly disclosed within the community.

Previous articles mentioned the controversy over the surge in Ordinals transactions causing congestion on the BTC network. After experiencing months of fervor, Ordinals now seems to be embroiled in a new controversy, and the open-sourcing of Veda is a ripple in this controversy. Dashjr's labeling of Ordinals as a "vulnerability" is at the center of this controversy. These series of events have filled the community with uncertainty about the development of Ordinals, further fueling more concerns. In this article, TrendX Research Institute will delve into these events and their subsequent impact on Ordinals.

On December 6th, Bitcoin developer and co-founder of the Ocean mining pool, Luke Dashjr, launched a lengthy criticism of Ordinals and BRC-20 tokens, claiming that they are exploiting a BTC vulnerability through SPAM attacks. According to Dashjr, since 2013, the Bitcoin core code has allowed users to set limits on the size of additional data in transactions; however, the inscriptions bypassed this limit by disguising their data as program code, making them a "vulnerability."

Dashjr stated that the Bitcoin core code is still susceptible to "SPAM attacks" in the upcoming v26 version, and developers hope to finally resolve this issue before v27 next year. Dashjr also stated that if the vulnerability is resolved, although existing inscriptions will continue to exist, Ordinals and BRC-20 tokens will be discontinued. On the same day, Dashjr, serving as the Chief Technology Officer of the decentralized mining protocol Ocean, announced on X that the Bitcoin Knots upgrade "fixed the vulnerability long exploited by modern SPAM attackers." Dashjr later revealed that this vulnerability issue had been entered into the US National Vulnerability Database as CVE-2023-50428.

Controversy Surrounding Ordinals

Controversy surrounding Ordinals has always existed, and Dashjr's remarks have brought these controversies to a climax: on the Bitcointalk forum, there have been many discussions about resisting "attacks on Bitcoin," with some claiming that these are the actions of malicious BSV developers. There are also discussions about adopting a soft fork to enforce strict Taproot validation script sizes, and how the protocol filters what they consider to be "SPAM attacks," and even adopting a hard fork to revoke Taproot.

Bob Bodily, co-founder and CEO of Bioniq, the market for Ordinals, disagrees with this view. He believes, "Due to Ordinals, the demand for Bitcoin block space has increased this year, and these transactions have paid over $100 million in network fees. Miners want more income, and Ordinals has brought about a revival of Bitcoin, with a huge demand for block space." Bodily also stated that this move would weaken many of the benefits brought about by the Taproot and Segwit upgrades and eliminate effective Bitcoin use cases. Even under implementation restrictions, Bodily believes that there will still be demand for Bitcoin Ordinals and other protocol transactions.

Like Bodily, Jameson Lopp, Chief Technology Officer of Casa, expects economic rationality to prevail. He explained on X that most miners are now large enterprises with a responsibility to maximize profits for shareholders, so they will mine any valid transactions that pay the highest fees. He also stated that few people agree with classifying inscriptions as vulnerabilities, and Dashjr's classification of them as SPAM attacks is subjective.

Hass McCook, former member of the Bitcoin Mining Council and staunch believer in Bitcoin, does not like Ordinals, but he also believes that "getting rid of" Ordinals is not a good thing. He said, "The most important thing outside of Bitcoin is freedom. My overall view is that I personally don't like it (Ordinals), and I don't see its value. But I don't want to censor it. I think this could lead to a very dark path."

Luke Dashjr's proposal does not mean it will be ultimately implemented; he does not have the authority to modify the Bitcoin code, and upgrades require miner voting.

Unlike Ethereum, where developers' words are not decisive, code upgrades must go through miner voting, and opposition will prevent the upgrade from proceeding. Even if developers insist on the upgrade, miners still have the right to choose to fork; however, the possibility of forking is quite low at a critical moment for the approval of a Bitcoin spot ETF.

Removing high-value transactions from the memory pool will reduce miners' income, and Bitcoin miners are unlikely to engage in a "moral struggle" over this issue. Even if Bitcoin community members intend to maintain the value of Bitcoin, the negative results brought about by Ordinals, such as the increasingly high gas fees and BTC network congestion, cannot be denied, but it still cannot be denied that the surge of Ordinals has also brought about positive developments in the BTC ecosystem.

Renowned podcaster Peter McCormack stated that these assets (Ordinals) cannot benefit those who use Bitcoin for payments, as they will only create a high-fee environment. It is clear that the outbreak of Ordinals has resulted in losses for some Bitcoin holders, which is the core of the debate between Ordinals supporters and opponents.

The debate about Ordinals is far from over. The emergence of Ordinals has left a profound impact on the Bitcoin ecosystem, sparking discussions about gas fees, block space requirements, and more. As for the contradictions between supporters and opponents, as well as the impact on the Bitcoin network, there may be more appropriate protocols or methods to resolve these issues in the future. The Bitcoin community is facing the challenge of how to handle the issue of Ordinals, but overall, the community's voting direction seems to lean more towards supporting Ordinals, and the possibility of forking is relatively small. After all, for miners and supporters of Ordinals, as long as at least one Bitcoin mining pool includes inscription transactions, they are unlikely to disappear.

References: https://nvd.nist.gov/vuln/detail/CVE-2023-50428

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