Technology drives finance, the underlying logic behind the hype of inscriptions

Inscription tokens currently have no practical value, similar to Meme , so what exactly supports the skyrocketing Inscription tokens? What is the underlying logic of all this? What is the difference between Inscription tokens on Bitcoin and Inscription tokens on public chains? What different trajectories will Inscription tokens take in the future?

The underlying driver behind the hype of inscription tokens

How to find coins with value or hype value? The author has always adhered to a core concept - technology drives finance, that is, many of the coins that can continue to soar have a certain relationship with the development of technology itself. Along with the get-rich-quick effect, fomo sentiment will also give birth to a batch of interesting tokens in the early stage. However, when technology stagnates or reaches a bottleneck period, and the bubble is too large, there will always be some adjustments. From the short history of the development of inscriptions, the more representative inscription tokens are Ordi, sats , rats , Atom, Pipe, etc., which also represent the evolution and development of the inscription protocol to a certain extent.

At the end of 2022, Bitcoin Core contributor Casey Rodarmor created the Ordinals protocol. On March 8, 2023, an anonymous developer named @domodata launched BRC-20 based on the Ordinals protocol, of which Ordi was the first BRC20 token. After the release of Ordinals, another anonymous developer launched the Atomicals Protocol in September. On September 26, Casey created a Bitcoin-based homogeneous token protocol Runes. The important improvement of these two protocols compared to BRC-20 is that they are based on UTXO technology, so Atom is also more favored by the market. In addition, a community developer named Beny has successively launched the BRC-20 proxy tool LooksOrdinal (without tokens), the BRC-20 improved version Tap Protocol positioned at OrdFi, and the improved version of Runes Pipe.

In addition to the several tokens developed together with the Inscription Protocol, the Inscription token sats has the same concept as the smallest unit of BTC (a good name), and it can be used as the gas fee for the L2 BRC20- swap launched by Unisat. rats is the leading token of the zoo concept Meme, with a strong community consensus, and may still be the favorite of the previous wave of zoo concept popularity.

From the above analysis, we can see that the tokens that are truly valuable or worth hyping still have to be related to technological development. From this perspective, it is more likely to get rich quickly if you look for hype inscription tokens. If you just hype some copied inscription tokens, it is expected to be difficult to gain widespread attention. In addition, those with community foundations and application scenarios are also worth paying attention to, among which rats and sats are representatives.

Inscriptions are so popular, what impact will they have on mainstream public chains?

From a practical point of view, inscriptions are actually progressive for Bitcoin. After the Bitcoin network has been expanded to a certain extent, this is a demonstration of a brand new use case. Previously, Bitcoin core developer Luke opposed inscriptions, but his essence was that he disagreed with the development of inscriptions on the Bitcoin chain, but he did not oppose Bitcoin Layer2 , such as the previous lightning network and side chains. However, inscriptions are really something without technical content for other public chains, and the hype is particularly large, which is completely a financial hype. In the end, the inscription tokens on the public chain are likely to return to zero.

At present, although the inscriptions on the public chain have no practical value, from a certain perspective, it is a test of the performance of many public chains. In fact, there are no real blockbuster applications in the blockchain industry. Without such applications, it is naturally difficult to truly test the performance of many public chains. Without superior performance, it is still a conceptual hype for developers and users. But the hype of inscriptions is actually a good test, which can also provide some reference data for the emergence of future blockbuster applications. Let's take a look at the performance of each chain:

The modular blockchain Celestia launched its first inscription project CIAS. After CIAS officially started minting , it received more than 1 million visits from over 120,000 people within an hour. More than 50% of the transactions on the Celestia chain were related to CIAS. Subsequently, its team issued a statement saying that the RPC had encountered a failure and announced the suspension of minting.

On December 8, Tonado introduced the inscription protocol, and subsequently, the on-chain activity surged, and the transaction processing of the TON network was delayed for a long time. According to the monitoring data of the blockchain status monitoring robot dTON, starting from December 5, TON 20's inscriptions generated more than 2 million transactions in just half an hour, and the network utilization rate increased by 61 times; this sudden peak traffic caused serious congestion in the TON network, and even if the network validators were still generating blocks, the verification was severely delayed.

The public chain Conflux also underwent the same stress test. According to ConfluxScan data, affected by the inscription activity, on December 15, Conflux had 1.788 million transactions per day and 17,700 active accounts on the same day.

On December 18, @cryptofishx, co-founder of Trader Joe, the largest DEX on Avalanche , published an article launching the asc-20 standard inscription (Avascription) BEEG, which indirectly made the inscription project on Avalanche assume the role of stress tester.

On December 16, due to the surge in users brought by the inscription protocol, Arbitrum officials announced that the Arbitrum One sequencer stopped running at 10:29 a.m. Eastern Time and the network was down. According to Arbiscan data, on December 15, the number of transactions on the Arbitrum chain surged to 4.39 million, setting a record high. Another major Layer 2 zkSync , on December 17, during the casting of SYNC inscriptions, the zkSync network also experienced a short "downtime".

In essence, the operation of inscription casting is not complicated. It seems to be a transaction with zero transfer. However, from the data, each chain still experienced congestion and downtime when faced with a crazy influx of users. In the early stage of the bull market, when it was mainly participated by cryptocurrency users, the performance of each mainstream public chain still had a lot of room for improvement. Only in this way can we really seize the opportunity when Web2 users pour in.

How will the Inscription Token develop in the future?

The development of inscriptions has a certain progressive significance for Bitcoin, but for other public chains or Layer2, it is more like an application performance test. From the perspective of value, the popularity of inscriptions is the appetizer for Bitcoin to expand into applications. In the end, inscriptions on the chain are unlikely to exist. Bitcoin core developer Luke has made a clear statement. In the end, the truly valuable Bitcoin application field should still be Layer2 and side chains. For other public chains, they are currently in a critical period of application development. How to develop Dapps that challenge traditional Web2 applications is not simple. During this "window period", the hype of inscriptions on mainstream public chains can only be regarded as a performance test of infrastructure, and the probability of its collapse is very high. For inscriptions on the Bitcoin chain, they may compete with Meme tokens such as Doge in the future.