President of Bitcoin Magazine, Mike Germano, has dared me to publish this rant with the following meme:<\/p>\n
Source: https:\/\/x.com\/mikegermano\/status\/1773003239312503243?s=20<\/a><\/p>\n To all the haters, yes, even in Bitcoin Magazine can free debate flourish. I\u2019m grateful for the opportunity to submit a dissenting opinion about Ordinals. With technical editor Shinobi at the helm, writers\u2019 contributions are permissionless!<\/p>\n I appreciate Bitcoin Magazine editor Pete Rizzo\u2019s posts detailing all of Bitcoin\u2019s history, but he is morally wrong on Ordinals, just as he was on the Ethereum Merge:<\/p>\n Source: https:\/\/x.com\/pete_rizzo_\/status\/1570383464360251398?s=20<\/a><\/p>\n While the Merge was a great technical feat for Ethereum, the switch to Proof of Stake only made it even less decentralized. And with Casey\u2019s<\/a> technical feat of Ordinals, he also hurts Bitcoin by making it less fungible.<\/p>\n On Peter McCormack\u2019s What Bitcoin Did<\/a> podcast, Pete Rizzo argued that \u201cin the worst case, people who own ordinals at least own some bitcoin.\u201d<\/p>\n No. The worst case is that people realize they\u2019ve been scammed and never want to touch Bitcoin again.<\/p>\n Some try to defend that flipping Ordinals for profit is not a scam, but simply people willingly gambling on speculation. Likewise, many people bought bitcoin at the cycle top in 2021 without having done any research, and haven’t touched Bitcoin since realizing losses. Speculators buy Ordinals for the same reason they buy bitcoin: to make money. <\/p>\n However, on this issue, the position of Bitcoin Maxis is clear:<\/p>\n Bitcoin is not an intangible asset that suffers from the same Greater Fool Theory<\/a> as Ordinals. Two meaningful ways saving in Bitcoin contrasts with gambling on Ordinals are network effects and actual limited supply. Many copycat altcoins have been issued, but none have the network effects of the OG. Additionally, most altcoins get dropped out of the air via Proof-of-Stake, with little physical cost to greater issuance. Bitcoin is only issued via Proof-of-Work, putting real weight and staying power behind its value.<\/p>\n Bitcoin Maxis who are here to fix the money, know that we don\u2019t buy Bitcoin to make money, but to fix the world.<\/p>\n On What Bitcoin Did, McCormack makes the case that no one is buying Ordinals to actually collect. Some Ordinals supporters have deluded themselves to the point that they think while most are trying to flip, some are actually collecting. Esteemed art auction house Sotheby\u2019s held an auction in January 2024 for ordinals, but putting their brand behind this \u201ccollection\u201d doesn\u2019t make it so.<\/p>\n https:\/\/www.sothebys.com\/en\/buy\/auction\/2024\/natively-digital-an-ordinals-curated-sale<\/a><\/p>\n I concede that whether or not I am morally opposed doesn\u2019t change the fact that there are people who find value in collecting worthless things. Some may argue that Sotheby\u2019s isn\u2019t scamming anyone if they are a willing buyer for digital art. However, it is a scam because they\u2019re not buying digital art since they don\u2019t actually own anything. I can add the same digital art to any transaction. It\u2019s only with their shared delusion that by using the ordinal protocol, same as their peers, the digital art they own in their transaction is more valued than the digital art in mine.<\/p>\n What I will NOT concede is the notion that ordinals and NFTs are unarbitrary\u2014they are. I can take the jpeg of every Quantum Cat, and re-release the same 3000 cat collection, and tell people mine don\u2019t cost 0.1 bitcoin each, but only 0.0001 bitcoin each. Such cheaper<\/em>. Much better deal!! There\u2019s nothing rare or special about it. Do people want to pay Udi or Sotheby\u2019s the 0.1 bitcoin to own the address to the Sat to the cat in their collection, or the same cat in mine? In fact, a copycat collection has already been created trying to do just that, called Quantum Rats<\/a>.<\/p>\n Source: https:\/\/twitter.com\/mononautical\/status\/1749981929955373546<\/a><\/p>\n Of course adding other collections isn\u2019t quite as direct as diluting supply of an existing one, but it\u2019s close enough. If a collection starts small and gets so expensive that the creators make a separate but similar collection with the purpose of making them available for more people, it\u2019s really just to scam more people. It\u2019s a moral judgment, but Ordinals don\u2019t uphold the values of a Bitcoin Maximalist. Bitcoin has a finite supply of 21 million, but there\u2019s no limit to the number of Ordinal collections that can be created. Next, Udi might release \u201cmutant\u201d quantum cats, or \u201cbored\u201d quantum cats, which become more popular and make the originals all worthless.<\/p>\n That\u2019s the scam. That\u2019s the rug pull.<\/p>\n The rug pull formula is simple: Start a \u201crare\u201d collection, hype it up with wash trading with yourself and influencers, then leave a sucker holding the bag.<\/p>\n Then do it again, and again, and again.<\/p>\n Bitcoin could succumb to \u201cgreater fool theory\u201d too, but the difference is the network effect that has made Bitcoin survive unlike any other pump and dump crypto.<\/p>\n On the contrary, owning digital art does exist \u2014 intellectual property exists. I can pay for a cover art design, so I own the art for Bitcoin Girl: Save the World. I own the files and I make the merch. If anyone tries to sell physical merchandise with digital art I own, then it\u2019s copyright infringement.<\/p>\n Source: https:\/\/www.amazon.com\/Bitcoin-Girl-Save-World-Dog\/dp\/B0BS8XB72K\/<\/a><\/p>\nOn Technical Feats<\/h2>\n
On Making Money<\/h2>\n
On Rare Collections<\/h2>\n
On Digital Art Ownership<\/h2>\n