Veda protocol indefinitely postponed: Ordinals "vulnerability" controversy sparks debate in the Bitcoin community

Author: TrendX Research Institute

On December 10, the 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 would be open-sourced. The purpose of the Veda protocol is to address the lack of L1 layer smart contracts in Bitcoin without altering the core consensus of Bitcoin. Surprisingly, just two hours before the announcement of the delay, Veda had declared that it was about to launch, with its tokenomics and token standards already established, and was indexing for its Ordinals services. Subsequently, the personal details of the project's founder were disclosed within the community.

Previous articles mentioned the controversy over the surge in Ordinals transactions leading to congestion on the BTC network. After months of fervor surrounding Ordinals, it now seems to be caught in a new storm, with Veda's open-sourcing being a ripple in this turmoil, and Dashjr calling Ordinals a "vulnerability" being the center of this storm. This series of events has left the community with uncertainty regarding the development of Ordinals and has further triggered more concerns. In this article, TrendX Research Institute will delve into these events and their subsequent impact on Ordinals.

Are Ordinals a "Vulnerability"?

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

Dashjr stated that the Bitcoin core code remains susceptible to "spam attacks" in the upcoming v26 version, and developers hope to resolve this issue before the v27 release next year. He also mentioned that if the vulnerability is fixed, although existing inscriptions will continue to exist, Ordinals and BRC-20 tokens will be halted. On the same day, Ocean, the decentralized mining protocol where Dashjr serves as CTO, announced on X that the Bitcoin Knots upgrade "fixed vulnerabilities that modern spam attackers have long exploited." Dashjr later revealed that the vulnerability issue has been entered into the U.S. National Vulnerability Database as CVE-2023-50428.

The Debate Over Ordinals

The debate over Ordinals has been ongoing, and Dashjr's comments have escalated these discussions: on the Bitcointalk forum, there have been many discussions about resisting "attacks on Bitcoin," with claims that this is the work of malicious BSV developers. There are also discussions about implementing a soft fork to enforce strict Taproot verification script sizes and how the protocol could filter what they consider "spam attacks," even considering a hard fork to revoke Taproot.

Bob Bodily, co-founder and CEO of the Ordinals market Bioniq, disagrees with this viewpoint, stating, "Due to Ordinals, the demand for Bitcoin block space has increased this year, with these transactions paying over $100 million in network fees. Miners want more revenue, and Ordinals has brought a revival to Bitcoin, creating huge demand for block space." Bodily also mentioned that this move would undermine many benefits brought by the Taproot and Segwit upgrades and eliminate effective Bitcoin use cases. Even with restrictions in place, Bodily believes that the demand for transactions like Bitcoin Ordinals will still exist.

Like Bodily, Casa CTO Jameson Lopp expects economic rationality to prevail. He explained on X that most miners are now large enterprises responsible for maximizing profits for shareholders, so they will mine any valid transaction that pays the highest fees. He also noted that few people agree to classify inscriptions as vulnerabilities, and Dashjr's classification of them as spam attacks is subjective.

Hass McCook, a former member of the Bitcoin Mining Council and a 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 don't see its value. But I don't want to censor it. I think this could lead to a very dark path."

The Future Direction of Ordinals

Luke Dashjr's proposal does not mean it will be executed, as he does not have code access to Bitcoin, and upgrades require miner votes.

Bitcoin differs from Ethereum in that developers' words are not decisive; code upgrades must be voted on by miners, and dissent will halt the upgrade process. Even if developers insist on an upgrade, miners still have the right to choose to fork; however, the likelihood of a fork is quite low at this critical moment for Bitcoin spot ETF approvals.

At the same time, removing high-fee transactions from the mempool would reduce miners' income, and Bitcoin miners are unlikely to engage in a "moral struggle" over this issue. Even if members of the Bitcoin community intend to maintain Bitcoin's value and rectify the negative outcomes brought by Ordinals, such as rising gas fees and BTC network congestion, it cannot be denied that the Ordinals boom has also brought positive developments to the BTC ecosystem.

Notable podcaster Peter McCormack stated that these assets (Ordinals) do not benefit those using Bitcoin for payments, as they only create a high-fee environment. It is evident that the explosion of Ordinals has caused some Bitcoin holders to suffer losses, which is at the core of the debate between supporters and opponents of Ordinals.

Conclusion

The debate over 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 demand, and more. As for the contradictions between supporters and opponents, as well as the impacts caused by the Bitcoin network, there may be more suitable protocols or methods to resolve these issues in the future. The Bitcoin community is facing the challenge of how to handle Ordinals, but overall, the potential direction of community voting seems to lean more towards supporting Ordinals, with a relatively low likelihood of a fork. 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.