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I don't really believe into rare sats. In my view, such concept was "invented" by those who wanna sell the salt to a slug (and cheat others). In essence I believe in the equally valued sats, i.e. 1 sat = 1sat (no matter of their ordering). Thus for those who are inclined to buy such stuff at an overprice I would recommend to find an excuse for themselves for their latter breakdown.
There are many easier "tokens" to sell to the public if you really want to invent something just to dump on people.Rare sats are very well spread out among all people who have Bitcoin.
Why would you "invent" something to sell to the public if it's nearly impossible to gather a significant market share of that asset? That's one of the big reasons why I love this asset. 4/10 for this particular conspiracy theory
I care about the fact that it could be monetarized, you don't even have to make money from people, you could just do ads and such, eventually everyone does everything for money, very few people do very few things for free, so everyone looks at it and doubts there is no personal benefit, which is why they try to stay away from it. I am not saying you are doing something bad, good job on doing what you are doing if you like doing it, but nobody has to participate or believe in it. I agree on 1 sat = 1 sat, doesn't matter whose coin or sat came into my pocket, all I care about is making money and I believe majority of the world think exactly like me, they don't care whose sat it is.
I mean, 1 sat = 1 sat 99.99% of the time, yeah. If somebody would be willing to pay $2m for one sat in your wallet, I'd doubt you wouldn't engage
As for personal benefit, I am building infrastructure that facilitates the trading of these assets through my platform. More people trading them does benefit me, yes. I built the platform because I liked the thesis that Rare Sats presented. It's not a huge market, so the business isn't born out of greed, but rather out of passion, and some Bitcoin nostalgia. Plus, people were trading them OTC, which comes with much higher risks involved than signing trustless PSBTs.
Old sats are also mostly locked. From the first 1000 blocks, only bitcoin from ~100 of them are in circulation. The older the sats, the more lost/locked.
Yeah, some categories can compete with one another, but sats from block 9, old uncommon sats, or black sats (and in general sats from the early days) are hard to come by. So i'd argue you can make a comparison with old stamps.
Regarding the first year of Bitcoin I sorta agree, these "extremely old" sats may be really relatively rare. But recently one of the old miners from 2009 has moved coins. That's 5 billion new potential rare sats, "common" ones but old ones, which can dilute other old common sats, e.g. the Pizza sats. From time to time this will occur, although not very frequently (we simply don't know what Satoshi is doing with his coins).Yeah, some categories can compete with one another, but sats from block 9, old uncommon sats, or black sats (and in general sats from the early days) are hard to come by. So i'd argue you can make a comparison with old stamps.
But for all coins after 2010 the number of "lost" Bitcoins and sats is much, much lower than the lost units of "analog" collectibles like stamps or coins. Even if the 30% some sources claim that are lost forever (these are those not moved for several years) this means 70% of the coins, and thus also of the rare sats are accessible. Probably the number is much higher, as other estimations about "lost" coins range between 10 and 20%. In addition, since the "rare sats" concept is known, most of those who could hold a rare sat are probably knowing it and "protecting" their sats from getting lost.
And as rare sats don't deteriorate, there's no indication that the structural problem that "rare sats" do not become more rare over time if demand is static, could change. The only chance would be an extreme crash and crypto winter where many people would "give up" their coins.
In reality I'm not against rare sats, I think it's a funny concept. Perhaps I'd even try to get[1] a sat e.g. from the Pizza transaction, which are cheap. Just for fun. But the concept has too many problems to be really a meaningful "investment".
[1] "getting" does not necessarily mean "buy", it could imply to search for them via an alternative method, like franky's
Would be a fun exercise of blockchain analytics.The rare sats that are trading really well are usually sats from the very first transaction, or the bl 78 mined by Hal Finney (but with extra properties, like palindromic id, or "alpha" property,etc..). The recent movement of the 5b sats didn't really introduce any really interesting rare sat in circulation.
As for collecting them: I think it's fun. It may still be a game, but hey... I managed to work with Sotheby to organize an auction for them, and it was a success. Who knows how many people could value them more in the future? All in all, the cautionary curiosity is a healthy take and a good way to start your journey with rare sats.
I don't really believe into rare sats. In my view, such concept was "invented" by those who wanna sell the salt to a slug (and cheat others). In essence I believe in the equally valued sats, i.e. 1 sat = 1sat (no matter of their ordering). Thus for those who are inclined to buy such stuff at an overprice I would recommend to find an excuse for themselves for their latter breakdown.
There are many easier "tokens" to sell to the public if you really want to invent something just to dump on people.
Rare sats are very well spread out among all people who have Bitcoin.
Why would you "invent" something to sell to the public if it's nearly impossible to gather a significant market share of that asset? That's one of the big reasons why I love this asset. 4/10 for this particular conspiracy theory
However, that doesn't dilute the value of sats from the first bitcoin transaction for example... in the same way that altcoins don't dilute the value of bitcoin.
I think there are different mechanisms of "dilution" in place.Altcoins don't dilute the value of Bitcoin significatively because Bitcoin's value is based on network effects. There's an ecosystem of miners, merchants and service providers which can't simply be "copied" by an altcoin, even if the code can be copied.
By the way I think there is some dilution caused by altcoin competition which could in theory "take away" some value fron Bitcoin. But there are also positive effects: altcoins have expanded the niche of crypto, and enriched the ecosystem, e.g. via DeFi and NFTs, but also providing a more risky "playground" for speculative investing. This positive effect outweights any "dilution".
In contrast, the "rare sats" business works more like the collectible business, for example numismatics or stamps.
The dream of "rare sats" supporters is that "old rare sats" could get a status similar to an old coin or an old stamp. But there is a crucial difference: Old stamps or coins are valuable because they are difficult to preserve. Most old stamps or coins are lost, or damaged. In contrast, it is very rare that a Bitcoin is lost, although it does happen it is much less frequent than in the case of stamps or coins. And damage can't happen to a rare sat.
Thus, an "old" satoshi hasn't the same kind of "rareness" than an old stamp/coin/piece of art/whatever "material" collectible has. All satoshis have the same probability to exist.
For this reason I believe there is more dilution coming from new kinds of "rare sats". Some very rare cases ("epic sats" for example, and maybe the legendary pizza transaction, or Satoshi's coins which are thought of currently that they won't be moved) could escape from that effect because they are so rare that everybody knows them. But most other rare sats would compete one with another, and thus every new category which is discovered lowers the value of the existing ones (if no more investors are found - similarities with the P-word are pure casuality
).I'd compare the relation between different rare sat categories not with bitcoin-altcoins but with the competition among different memecoins, BRC-20s and Runes, where also new coins tend to "dilute" the value of old ones.
Old sats are also mostly locked. From the first 1000 blocks, only bitcoin from ~100 of them are in circulation. The older the sats, the more lost/locked.
Yeah, some categories can compete with one another, but sats from block 9, old uncommon sats, or black sats (and in general sats from the early days) are hard to come by. So i'd argue you can make a comparison with old stamps. Bitcoin is a deflationary asset in the long haul because people occasionally lose it. This is mostly true for the early days of Bitcoin.
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in the same way that altcoins don't dilute the value of bitcoin
They obviously do, because you cannot have both, at the same time, on the same key, moving simultaneously in the same transactions (because many people create obstacles called "replay protection", while many networks would benefit, if every transaction would be 100% replayed). So, it creates an unnecessary competition, where in theory, you have 21 million coins limit, but in practice, as long as you can flood the market with a lot of new monetary systems, people will stop using the original network. And the supply of new altcoins is unlimited: you can create as many new altcoins, as you want, abusing the maximum supply.Quote
I believe that's the single arbitrary convention about rare sats.
That's the problem: if things would be signature-based, then you would know exactly, what is signed, and which order is signed. But if signatures are ignored, and things just fly in a way, as they are specified in a given transaction, then they can be re-ordered in many cases.For example: some wallets sort transaction outputs in ascending/descending order, or shuffle them specifically, for example by sorting them by address types. Then, you can trace someone, if you know, which client is used by that person. And then, if sats are flying in unsigned way, you are forced to give up your privacy, to put a given satoshi in a specific place.
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but that doesn't make the ones that make sense weaker imo
Of course it does. See: https://en.wikipedia.org/wiki/Interesting_number_paradoxThe interesting number paradox was a good read, but I don't think it brings any obstacles in practice. I argue that there's a spectrum of interestingness. Sats from the first bitcoin are higher up the ladder than a sat that has a palindromic id. Ultimately, the market decides which are the most interesting ones, and that's a good thing because value, especially with collectibles, is subjective.
I'd also argue that without altcoins, there would be far fewer people onboarded in crypto nowadays. We shouldn't ignore the real attention market that we're living in. Altcoins, and especially altcoins that have good price actions serve as a very good way to onboard people to Bitcoin. I suspect neither of us knows if Bitcoin would've been better off without altcoins.
I was first very fascinated by Ethereum when I got into crypto. It seemed to me that it's a bit more potent than Bitcoin because of its programmability. It took around 1y or so for me to figure out the real difference between the two. I could say that Ethereum onboarded me to crypto, and then I turned to Bitcoin. I'm pretty sure there are many people like me out there. Even if altcoins are diluting Bitcoin, they cater to a broader market, which in turn has much higher chances of turning to Bitcoin.
You have a point of failure with the arbitrary way in which the sats flow through fees, but I believe that the broader market already agreed on the established consensus. This is also in the ord indexer code which is run by many entities/platforms, and this strengthens the consensus. If Casey wants to change this particular consensus and try to get the market to agree that the sats flow first to the miner fee, the market will reject this.
I have several points to criticise the "rare sats" concept. I don't repeat pooya87's and Ambatman's points but some are somewhat related.
My main point is that in an open system like Bitcoin, it's likely that the value of rare sats will decrease continuously because the sats will become increasingly less rare over time, due to certain incentives.
First because there will be a proliferation of "historical" satoshis. There are a lot of transactions, dates and events you could consider "historic" in the Bitcoin world.
I give a non-obvious example: What about if we consider the first satoshi of the person who bought at the bottom (i.e. to the lowest price) of a historic bear market "rare"? We had (depending on counting) between 4 and 6 deep bear markets, and those who bought at the bottom were the "heroes" who bought into a falling knife, creating the base for a new bull market.
Second, the method of considering a sat "rare" due to its position is also open for new approaches. We already have the example of "black" sats, the last ones in a difficulty or halving cycle. In another thread I have brought up the following examples:
1) A sat which is situated exactly in the center of all coins mined during a cycle.
2) As an extension to 1), a sat which is situated in a mined transaction in the exact center of a cycle, not in the mined coins. The interesting property of this approach is that there may be cycles without such a "center sat", which means that they are more rare than the traditional uncommon sats.
3) A sat which is exactly positioned at the "golden ratio" between the first and last block of halving cycles.
Third, what if some whale decides to create an own ordinals protocol using franky1's approach to count the fee first when sats are transacted, because he has bought (for almost no money) a lot of these sats? We could get two rival versions of the protocol, and while one will perhaps "win" it's possible that both are used.
All of these approaches allow to create a very high amount of rare sats over time, and that will make the average rare sat less rare. Incentives are always there: you identify an "interesting" event, mathematical property or whatever in secret, buy the sats in secret (e.g. on P2P exchanges) and then promote and establish them in the same way NFTs are promoted ...
My main point is that in an open system like Bitcoin, it's likely that the value of rare sats will decrease continuously because the sats will become increasingly less rare over time, due to certain incentives.
First because there will be a proliferation of "historical" satoshis. There are a lot of transactions, dates and events you could consider "historic" in the Bitcoin world.
I give a non-obvious example: What about if we consider the first satoshi of the person who bought at the bottom (i.e. to the lowest price) of a historic bear market "rare"? We had (depending on counting) between 4 and 6 deep bear markets, and those who bought at the bottom were the "heroes" who bought into a falling knife, creating the base for a new bull market.
Second, the method of considering a sat "rare" due to its position is also open for new approaches. We already have the example of "black" sats, the last ones in a difficulty or halving cycle. In another thread I have brought up the following examples:
1) A sat which is situated exactly in the center of all coins mined during a cycle.
2) As an extension to 1), a sat which is situated in a mined transaction in the exact center of a cycle, not in the mined coins. The interesting property of this approach is that there may be cycles without such a "center sat", which means that they are more rare than the traditional uncommon sats.
3) A sat which is exactly positioned at the "golden ratio" between the first and last block of halving cycles.
Third, what if some whale decides to create an own ordinals protocol using franky1's approach to count the fee first when sats are transacted, because he has bought (for almost no money) a lot of these sats? We could get two rival versions of the protocol, and while one will perhaps "win" it's possible that both are used.
All of these approaches allow to create a very high amount of rare sats over time, and that will make the average rare sat less rare. Incentives are always there: you identify an "interesting" event, mathematical property or whatever in secret, buy the sats in secret (e.g. on P2P exchanges) and then promote and establish them in the same way NFTs are promoted ...
That is a fair point, and some of those categories might even make sense. However, that doesn't dilute the value of sats from the first bitcoin transaction for example... in the same way that altcoins don't dilute the value of bitcoin.
About franky's point: he might be onto something, but there are arguments for the fees being the first to flow out or the last as well. I believe that's the
single arbitrary convention about rare sats.
Your point can apply in practice with the current indexing method tho: someone searching for some category of sats, then creating that category. In that case, it's up to the people to decide if there's really a value proposition with new rare sats categories or not. On magisat.io we list only what makes sense. Also, one shouldn't just jump into any category of rare sats. Some make more sense and have real historical meaning, while some other categories that don't can hit the market in the future, but that doesn't make the ones that make sense weaker imo.
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I am 100% sure that if a more elegant model is designed for Bitcoin NFTs, it will be adopted in time.
It won't, because the main goal for Ordinals was not to make NFTs. Their goal was to turn Bitcoin into a cloud storage. It was never about "ownership", it was always about "pushing data". And before Ordinals, there existed many NFT platforms, so it was not a problem, to design a system, where by signing a Bitcoin key, you would own some NFT on another chain. We even have pay-to-sudoku, since 2016.But if your goal is to push data instead, then you don't care about ownership, which is why Ordinals don't care, who owns a particular satoshi (because if they would care, then that information would be expressed directly, instead of rolling a dice, and betting that the client will order all inputs, outputs and amounts correctly).
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When somebody doesn't like an "innovation" that people use, the rational thing to do is design it in a better way.
The only reason why Bitcoin users would care about Ordinals, is that they take down regular payments. If not that, then nobody would care. For example, imagine a scenario, where this forum would be used as a cloud storage, instead of being used as a forum. Or when people would trade things for merits. Then, the role of forum users is not to "design it in a better way", but to "get rid of the abuse". And if accessing regular threads would be stopped, because of spam, then it would be rational, to introduce some kind of filters, and banning the spammers, to stop the abuse.And the same thing could happen in Bitcoin, but people didn't want to stop the spam, for some reason.
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For some reason, laser eyes prefer to shout and cry in their podcasts, instead of creating the best version they can create that satisfies the market needs.
There are some mining pools, which censor Ordinals. There are also some users, which stopped using Taproot, because of Ordinals. You want NFTs on Bitcoin? Then put your NFT on some existing platform, designed for NFTs, and then use some hash-locked contract (or even point-locked contract, since Taproot is there), to buy or sell those things, if you really want. If you put every data on-chain instead, then you take the room, reserved for other payments, and then, everyone will pay more fees, because of that.So, the problem is not technical anymore, since many solutions were proposed. But if users don't want to adopt those solutions, then what else can be done? If you abuse the system, and take down regular payments, then the only rational answer, is to censor some Ordinals, to process regular payments faster. Fortunately, many Ordinals are now confirming in testnet3 instead, so the mainnet can enjoy cheaper transactions, at least for a while.
I mean hey, if you had the majority of the market on the "censor txs side" I guess this is what would've happened. The way things are, it appears that the market likes Ordinals. Also, I don't think that Bitcoin is designed to prioritize some tx above any other. Bitcoin is made to blend in with the profit-driven market. If these transactions bring more fees, then these are Bitcoin's priorities. It doesn't matter what you like, and it doesn't matter which transactions we consider important. If spamming on this forum is what would bring it more profits, then guess what, you'd probably use this as a cloud storage.
Anyway, I'm not a hard supporter of inscriptions. Rare sats do not require any on-chain information and do not clog the network with anything. Also, there's no other standard for rare sats other than the one established by Ordinals theory (which is a fairly decent one).
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If you want to preserve some rare sats (let's assume you find them in a bigger utxo), you can split that utxo into 3
Imagine how easier could it be, if only signed things would move. And if you would have to explicitly specify, what is moved, and where, for example as a commitment to R-value in a signature.But instead, Ordinals force users to create more UTXOs, for no reason. Not to mention transactions, which store ASCII-encoded transaction data inside OP_RETURN, or even JSON files. Some people wonder, why sometimes fees are high. And the answer is simple: if you have a protocol, designed to bloat the chain, then it will take more space than needed, and increase fees for everyone, for no reason.
I am 100% sure that if a more elegant model is designed for Bitcoin NFTs, it will be adopted in time. When somebody doesn't like an "innovation" that people use, the rational thing to do is design it in a better way. For some reason, laser eyes prefer to shout and cry in their podcasts, instead of creating the best version they can create that satisfies the market needs.
Xverse warns you when spending those rare sats.
How do they define a rare Sats? What about I don't want to send a Sat because its date just commemorate my wedding day or something quite personal.
Well not quite interested in it been rare, just curious if the Bitcoin protocol allows such transactions.
So a third party is needed to accomplish this?
https://docs.ordinals.com/ tells you what sat ranges your utxos contain. Example: https://ordinals.com/output/3ea3bc8d7991869294ce43450eefee0de47a592417a59bd440e7d15fe74f4824:15
This utxo has 600 sats: 45039459700-45039460300 (600 sats). There are 5000000000 mined in a block from the first epoch. You can observe that this particular utxo has satoshis from the first Bitcoin mined by satoshi in block 9.
If you want to preserve some rare sats (let's assume you find them in a bigger utxo), you can split that utxo into 3: sats before the offset of the ones you're interested in, sats that you're interested in, sats after the ones you're interested in. Then you keep the utxo with the sats ur interested in safe. there are already tools built for this.
Hal Finney understood that there could be extra historical value derived from Bitcoin.
https://bitcointalk.org/index.php?topic=132008.msg1416027#msg1416027
https://bitcointalk.org/index.php?topic=132008.msg1416027#msg1416027
I was lucky enough to receive the first bitcoin transaction, and then I was careless enough to spend it accidentally. I probably still have the key sitting on a switched-off computer, so I could auction off the key. Usual caveats about making sure I delete it when I sell it...
It seems even the legend himself understood that the first Bitcoin involved in a transaction held historical value!
I've recently made a post about rare sats. I hope you'll find it interesting: https://bitcointalk.org/index.php?topic=5510789.0
2. There are sufficient people who are trading Bitcoin NFTs. We can safely say they exist (even if you deem Ordinals Theory a "scam") in their current shape or form, which is up to you to decide if it's worth anything. You can't just hate a concept into non-existence 
There is no such thing as a Bitcoin NFT because there is no such thing in the protocol. Their existence has nothing to do with whether people trade them or not.For example my previous post here "msg64579198" also can be tracked since it has a number attached to it and you can call it a NFT and pay me a million dollars for it. That doesn't make it into a NFT though. It also doesn't prevent me from deleting that post because it is centralized and I control its existence.
Why? Because bitcointalk is not a token creation platform and my post was not a smart contract that is being executed in a decentralized platform.
The same with what you refer to as "Bitcoin NFTs". They are literally treated as arbitrary data by the Bitcoin protocol. There is no script. There is no smart contract. There is no verification. Just arbitrary data.
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If you ask someone who doesn't know anything about Ordinals Theory to track sats (for whatever reason), they will come up with the same rules.
And none of it is part of the Bitcoin protocol hence they are all arbitrary in Bitcoin world. Worst of all is that none of those rules were created nor can they change in a decentralized way. It is all centralized.Quote
4. How will Bitcoin scale if it can't handle a few tens of thousands trading their "fake tokens"? The same high fees would be produced by people using Bitcoin on mass for everyday transactions. What then? We'll shout at people that they're just transferring low amounts of Bitcoin and thus should burden their network with their insignificant transactions? All Bitcoin transactions are the same: be it a "fake token" buy or a Bitcoin transfer, or whatever. For people who can't afford to transfer their btc because of high fees, we have lightning.
First of all lets be clear about what is happening here. People found an exploit in the protocol and have been abusing it to inject arbitrary data into the chain. To put simply people are using the decentralized ledger of a payment system as a cloud storage which is the definition of abuse.Secondly your arguments regarding bitcoin's scaling issues is not a justification for this abuse. One of Bitcoin's shortcomings is its scaling issues, but that doesn't mean people should abuse the protocol and turn it into a cloud storage.
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5. Calling someone an idiot because of their "taste" in choosing what to collect is straight-up wrong.
I already explained why they are idiots at the beginning of this post. That's because they think they are trading a token while what they are trading is not a token at all.Bitcoin is not the ethereum (or other similar) platform(s) that you can create a token on.
You're deviating from the subject of the post. I didn't talk that much about "Bitcoin NFTs". It seems to me at this point that you're just venting your personal issues with Bitcoin Inscriptions, which is fine, but the arbitrary assignment of data to certain sats is not required for rare sats to exist.
Anyway, to address some of your points:
1. Marketplaces and services that engage with ordinals all run their own instance of the indexer. If Rodarmor decides to do an update on the git which isn't liked by the market, the services will just keep running the old version. While that's not a very strong degree of decentralization, it isn't centralized. When Bitcoin had 100 nodes it wasn't very decentralized either (not trying to compare the two, but trying to emphasize that the Ordinals protocol can get a higher degree of decentralization in the future). I don't understand how the analogy with your message is valid, as the data stays on Bitcoin. If you're referring to the consensus that creates the "pointer" might change, refer to my previous phrase. I'd argue it can't be changed now because the market wouldn't agree and run its own fork of the indexer with unchanged pointers.
2. "They are all arbitrary in the Bitcoin world". Yeah, but we're not living in the "Bitcoin world" are we? There can be another market consensus outside Bitcoin. I already explained why the consensus needed for "rare sats" (not for Bitcoin NFTs) is not really arbitrary. Please refer to that.
3. UTXOs are not "rare". Sats can be rare. UTXOs, as you already kindly mentioned, are spent and that's the end of their lifespan. Sats can be considered to flow from inputs to outputs according to "not-so-arbitrary" rules as stated in my post.
4. Using Bitcoin as cloud storage may have advantages (if you're not obtuse and change-averse and you can cherry-pick the good use-cases). I've joined a twitter space with Julian Assange's brother and other laser-eyes maxis who started an initiative based on Ordinals Theory to post the Afghan Logs on the Bitcoin chain, proving that Bitcoin (if you're willing to pay) can also act as a censorship-free publication network. They didn't leverage the "pointer" consensus, as it didn't matter who "owned" the Afghan Logs, but they did try to open the eyes of the people that Bitcoin could have this use-case as well. Wouldn't it have been simpler for Snowden to simply publish the documents onchain if Ordinals Theory was a thing back then? If you refuse the exploration of anything new, you wind up exactly as the old-school economists who dismissed Bitcoin as a fad. Nobody is trying to convince you to trade NFTs on Bitcoin or to acknowledge their existence. You could, however, attempt to derive some usefulness from the "exploit" you're so unhappy about. I argue that objectively positive use cases can arise.
5. Nobody believed they were trading a "token". They bought a sat governed by the rules explained above, which is not a token or NFT.
the notion of rare sats and counting sats is wrongly applied by Rodarmor
firstly imagine that you have a new block of 10 coins
oooooooooo
now imagine you want to decide to give some change to different people
and you know when spending that amount you will be charged a fee (call it 2 coin of 10)
(oo)oooooooo
so REAL economics is that you tell the system whom you assign the change to after the fee is deducted first
sooo, knowing upfront how much fee(2coin) is not counted in the change(8 coin) you tell the system this about how much the destinations get of the remainder
i want dave to have 4 coin and ill have 4 coin
(oo)oooooooo
()=fee
yep. the "first sats" go back into being a fee which goes back into mining rewards.. and the remainder(change) is split over 2 destinations
so the counting of sats via "Rodarmor theory" is not as people think, because the transaction value first takes the fee away and then gives change out to destinations
and before anyone tries to say the economics is different EG "Rodarmor theory" that in a 1in 2out tx the second out is always the "change" thus the first sat goes to the first out, and then fee is deducted after(facepalm).
this is not a true economic rule nor a rule at all.. some people can set how much of the change they want back themselves first and then pay out to someone else an amount secondary
so the real economic rule is the fee comes first and then both destinations get the remainder(change).. thus first sats go into the fee
.. but then again in the silly markets of idiots buying fluff.. who cares about math and economics of how things actually work
firstly imagine that you have a new block of 10 coins
oooooooooo
now imagine you want to decide to give some change to different people
and you know when spending that amount you will be charged a fee (call it 2 coin of 10)
(oo)oooooooo
so REAL economics is that you tell the system whom you assign the change to after the fee is deducted first
sooo, knowing upfront how much fee(2coin) is not counted in the change(8 coin) you tell the system this about how much the destinations get of the remainder
i want dave to have 4 coin and ill have 4 coin
(oo)oooooooo
()=fee
yep. the "first sats" go back into being a fee which goes back into mining rewards.. and the remainder(change) is split over 2 destinations
so the counting of sats via "Rodarmor theory" is not as people think, because the transaction value first takes the fee away and then gives change out to destinations
and before anyone tries to say the economics is different EG "Rodarmor theory" that in a 1in 2out tx the second out is always the "change" thus the first sat goes to the first out, and then fee is deducted after(facepalm).
this is not a true economic rule nor a rule at all.. some people can set how much of the change they want back themselves first and then pay out to someone else an amount secondary
so the real economic rule is the fee comes first and then both destinations get the remainder(change).. thus first sats go into the fee
.. but then again in the silly markets of idiots buying fluff.. who cares about math and economics of how things actually work
This is the first intelligent issue raised by someone in this forum. I commend you for actually sitting down and attempting to find a flaw in the system, and not shouting and crying about "nfts" when the post is about rare sats.
I believe that putting the fee last is the first arguably arbitrary convention. I wouldn't necessarily make the economic argument. Maybe it makes more sense to have the first sats flow into the fee because the coinbase transaction that pays the miner is the first one in the "to-be-confirmed" block. One could also argue that the fee is simply the remainder of the amount in the inputs minus the amount in the outputs (which it is) and that's why you pay the fee last because you need to have a set amount for the outputs to calculate the fees. There are arguments for both arrangements, that's why I agree with you that this may be indeed the single arbitrary consensus about rare sats.
To understand Rare Satoshis, we first need to understand Ordinals (Bitcoin NFTs). This IS NOT a post about NFTs, I promise! However, in the journey to create Bitcoin NFTs, Casey Rodarmor, the creator of ordinals.com discovered a much more interesting and intriguing asset: Rare Satoshis.
When you start your topic with a false statement, it discourages the reader from continuing reading the rest.There is no such thing as Bitcoin NFT because Bitcoin is not a token creation platform and it is impossible to create any kind of token using the bitcoin smart contracts.
Ordinals is also not part of the Bitcoin protocol which means you are talking about an exploit in the consensus rules that allows people to inject an arbitrary data into the chain. Then on another completely centralized platform that has nothing to do with Bitcoin they call that arbitrary data an "NFT" and scam people by selling it to them!
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Now that we understand how sats are tracked, we can dive into what makes a satoshi rare. There are multiple types of satoshis that have interesting properties. The broader classification includes:
These are all arbitrary and meaningless. Of course you can come up with any crazy classification like calling any coin in a transaction with ID that starts with 0x101 to be rare! That's your choice and if you can get some newbies to follow that arbitrary classification, you get yourself a community that can also be exploited to make money by selling such coins to them at a higher price!None of it can be called "token" or "tracking sats" though.
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Transfering
UTXOs containing rare satoshis can be transferred untouched by simply making sure that the transaction that involves them as input contains an output of identical size and at an identical offset.
Not surprising at all that the rules for transferring is also arbitrary and mostly technobabble to look like rules. The moment you spend a UTXO it stops adhering to the arbitrary classification above and stops being "rare"! UTXOs containing rare satoshis can be transferred untouched by simply making sure that the transaction that involves them as input contains an output of identical size and at an identical offset.
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Extra miner revenue
Any of the previous spam attacks on Bitcoin Network has caused similar fee spikes making it difficult for people to use bitcoin and at the same time increase the miner revenue due to the high fees the attackers pay.It is not new: https://bitcointalk.org/index.php?topic=1776143.0
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epic-sat-mined-bitcoin-halving-block-sells-two-million
In other words some idiot who had no understanding of Bitcoin paid a lot of money for garbage!Such exploits/scams are also not new.
To understand Rare Satoshis, we first need to understand Ordinals (Bitcoin NFTs). This IS NOT a post about NFTs, I promise! However, in the journey to create Bitcoin NFTs, Casey Rodarmor, the creator of ordinals.com discovered a much more interesting and intriguing asset: Rare Satoshis.
When you start your topic with a false statement, it discourages the reader from continuing reading the rest.There is no such thing as Bitcoin NFT because Bitcoin is not a token creation platform and it is impossible to create any kind of token using the bitcoin smart contracts.
Ordinals is also not part of the Bitcoin protocol which means you are talking about an exploit in the consensus rules that allows people to inject an arbitrary data into the chain. Then on another completely centralized platform that has nothing to do with Bitcoin they call that arbitrary data an "NFT" and scam people by selling it to them!
Quote
Now that we understand how sats are tracked, we can dive into what makes a satoshi rare. There are multiple types of satoshis that have interesting properties. The broader classification includes:
These are all arbitrary and meaningless. Of course you can come up with any crazy classification like calling any coin in a transaction with ID that starts with 0x101 to be rare! That's your choice and if you can get some newbies to follow that arbitrary classification, you get yourself a community that can also be exploited to make money by selling such coins to them at a higher price!None of it can be called "token" or "tracking sats" though.
Quote
Transfering
UTXOs containing rare satoshis can be transferred untouched by simply making sure that the transaction that involves them as input contains an output of identical size and at an identical offset.
Not surprising at all that the rules for transferring is also arbitrary and mostly technobabble to look like rules. The moment you spend a UTXO it stops adhering to the arbitrary classification above and stops being "rare"! UTXOs containing rare satoshis can be transferred untouched by simply making sure that the transaction that involves them as input contains an output of identical size and at an identical offset.
Quote
Extra miner revenue
Any of the previous spam attacks on Bitcoin Network has caused similar fee spikes making it difficult for people to use bitcoin and at the same time increase the miner revenue due to the high fees the attackers pay.It is not new: https://bitcointalk.org/index.php?topic=1776143.0
Quote
epic-sat-mined-bitcoin-halving-block-sells-two-million
In other words, some idiot who had no understanding of Bitcoin paid a lot of money for garbage!Such exploits/scams are also not new.
1. Thank you for taking the time to read and answer
2. There are sufficient people who are trading Bitcoin NFTs. We can safely say they exist (even if you deem Ordinals Theory a "scam") in their current shape or form, which is up to you to decide if it's worth anything. You can't just hate a concept into non-existence
3. The consensus required for tracking sats is not entirely arbitrary. That's the main takeaway from the post imo. If you ask someone who doesn't know anything about Ordinals Theory to track sats (for whatever reason), they will come up with the same rules. I argue that because of this the tracking is not entirely arbitrary. I can agree that the consensus required to bind the injected data to a satoshi is arbitrary, but I believe I make a good argument for the tracking itself not being arbitrary (which you haven't tackled; you just called it arbitrary). My post is about rare sats, and rare sats do not need any arbitrary data bound to them to be deemed "rare sats".
4. How will Bitcoin scale if it can't handle a few tens of thousands trading their "fake tokens"? The same high fees would be produced by people using Bitcoin on mass for everyday transactions. What then? We'll shout at people that they're just transferring low amounts of Bitcoin and thus should burden their network with their insignificant transactions? All Bitcoin transactions are the same: be it a "fake token" buy or a Bitcoin transfer, or whatever. For people who can't afford to transfer their btc because of high fees, we have lightning.
5. Calling someone an idiot because of their "taste" in choosing what to collect is straight-up wrong. I hope you realize this is a double standard, especially because of how Bitcoiners were regarded in the early days. The same was said about "idiots" who don't understand the economy that were buying these "worthless digital coin". It's fine to be conservative and not engage with new things. It's not fine to call those who do idiots. It's all a cycle. 10 years ago you were the idiot for buying Bitcoin, nowadays that guy is the idiot for buying a rare satoshi. Only time will tell who's an "idiot" and who's not. I believe that for the arguments stated above, rare sats are a much better asset than everything else in crypto aside from Bitcoin itself (also they don't involve any data-injection onchain /aka "spam attack").
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The flow of satoshis from inputs to outputs in Bitcoin transactions is done First-In-First-Out. (sending a UTXO containing 1,000,000sats to two addresses: 500,000 to the first and 490,000 to the second, will send the first 500,000 to the first address, 490,000 to the second, and the rest of 10,000 sats to the miner's address adding the block)
This is an Ordinal theory not a Bitcoin protocol Bitcoin are fungible so all Sats are equal.
This is highly likely a passing Fad so I doubt it has a future not to mention rarity is speculative and hasn't been proper stated so I doubt it would be liquid.
Not to mention It was increase the number of Bitcoin scams since individuals that know little and have the money could be deceived to buy a "normal" as rare.
Yes it's fun hunting and seeing something corresponding with history, but if miners focus on rare Sat's what do you think would happen to the security of Bitcoin in the long run?
Well not a hater of development but I love development that complements not contradicts.
I did mention that Bitcoin is intended to be fungible. Yes, this is based on Ordinals Theory. I did post some arguments for which i think the consensus for sat identification and transferring rules is a strong one.
I believe out of all “assets” born from ordinals theory this class is by far the best and with long term potential.
If by network security issues you are referring to the incentive to reorder blocks, i think those are already out there with some other use cases. Bitcoin is not that fragile. People thought that the network will have reordering of tens of blocks when the epic sat minted (which sold for 2.1m$), but in fact there wasn’t any reordering.
Part 1: Rare Sats: What are they? Do they exist?
Rare Sats! Some satoshis may be special and different from others. This is a controversial topic, as is anything related to Ordinals Theory. I'm posting this because I believe this subject is much more fun and intriguing compared to any other altcoin or token out there. I ask you to read patiently, probe my arguments if you think they're lacking, and possibly be open to a new collecting hobby.
To understand Rare Satoshis, we first need to understand Ordinals (Bitcoin NFTs). This IS NOT a post about NFTs, I promise! However, in the journey to create Bitcoin NFTs, Casey Rodarmor, the creator of ordinals.com discovered a much more interesting and intriguing asset: Rare Satoshis.
The first part of Ordinal Theory concerns itself with satoshis, giving them individual identities (ids) and allowing them to be tracked. The second part (required for Bitcoin NFTs) concerns itself with binding data posted on the Bitcoin network to satoshis through a "convention".
Let's dive into this first part! This part of the Ordinals Theory creates two "strong conventions" (I'll explain why I'm calling them "strong" in a minute):
As Bitcoiners, we understand that sats are simply a measuring unit for Bitcoin. By default, the Bitcoin Network has no way of identifying a particular satoshi. However, I would argue that UTXOs can be seen as sats containers, and unlike a glass of water where you have the water molecules chaotically moving through the glass, UTXOs are static and much more akin to a stack (of sats). Yes, sats are a measuring unit, but they are more similar to millimeters than to milliliters. Millimeters of material, unlike milliliters can be preserved when moved and uniquely identified. That's what Ordinals Theory does.
Let's now circle back to why I call the two conventions needed to identify sats "strong conventions", and why this part of the Ordinals Theory makes much more sense than the second. Occam's Razor is the problem-solving principle that recommends searching for explanations constructed with the smallest possible set of elements. In simpler words, this principle states: "The simplest explanation is usually the best one." This also applies to conventions. When a convention is created to aid a certain purpose (in this case identifying an tracking sats), the simplest rules are the preferable ones. In this case, both the way to assign ids(incremental, starting from 0) and the transfer rule (FIFO) for sats are the simplest ones. The fact that these conventions follow Occam's Razor principle emboldens us to believe that even with Ordinals Theory erased from the collective memory, the next attempt at identifying and tracking sats will be based on the same exact conventions that the current Ordinals Theory postulates.
Now that we understand how sats are tracked, we can dive into what makes a satoshi rare. There are multiple types of satoshis that have interesting properties. The broader classification includes:
I would argue that it makes sense to dive into this asset class because (1) it's fun, (2) they can be discovered (especially among old Bitcoin), (3) they can be "hunted" from different sources by shuffling your Bitcoin around, and (4) they can be traded. Caution is advised when trying to hunt them because this activity usually involves sending your Bitcoin to custodial actors such as Binance, in hope that you will withdraw another set of sats that are rare.
Part 2: How are Rare Sats trustlesly traded?
Transfering
UTXOs containing rare satoshis can be transferred untouched by simply making sure that the transaction that involves them as input contains an output of identical size and at an identical offset. Say I want to transfer a UTXO of 1000 sats from address A to address B without losing any of the 1000 sats. I will add the UTXO as input 0 and another UTXO that doesn't involve sats that i prefer to keep as input 1. Output 0 will have the same size as the input and go to address B, and output 1 will be the change. We do this to preserve all satoshis form our UTXO that contains rare sats and pay the fees with sats from another, less interesting UTXO.
Trading
When you want to sell rare sats in a trustless manner, you sign a PSBT (Partially Signed Bitcoin Transaction) with SIGHASH_SINGLE|ANYONECANPAY. What that means is that you agree to involve a UTXO (that contains the rare sats) in a transaction (as input) if and only if you get an output with the desired amount of BTC to a specified address. This PSBT is stored by the marketplace and is then publicly displayed as "for sale".
When the buyer decides to go for the trade, the marketplace gets the buyer to sign the other inputs of the transaction ( the full transaction is shown in the image below).
https://pbs.twimg.com/media/GC6_xd-WYAAoCzh?format=jpg
In a typical marketplace transaction, the buyer signs the transaction, sends it to the marketplace and the marketplace puts together the full Bitcoin transaction and submits it.
The necessity for padding UTXOs exists because to have the buyer receive the rare sats, while still having the input with the rare sats at the same index as the output with the payment (required so that the input UTXO with rare sats of the seller to be involved in the transaction), we need two random inputs from the buyer on positions 0 and 1, and an output with the sum of these two inputs at index 0, so the output at index 1 can be reserved for the rare sats (having the same number of sats as the input with the rare sats and going to the buyer).
Part 3: The implications of rare sats trading
One can observe that the trading of these assets has several implications in the Bitcoin Network. I'll briefly list them:
That's all! I thought this asset class might be much more interesting for Bitcoiners here than any other altcoin or on-chain image collectibles. I can see an appeal in collecting rare sats, similar to how humans collected old and special coins throughout history. The infrastructure needed for this activity is evolving and is getting better and better UI/UX. You can engage with Rare Sats by using a wallet that recognizes them (such as Xverse and trading them on marketplaces such as Magisat. Let me know your thoughts!
Rare Sats! Some satoshis may be special and different from others. This is a controversial topic, as is anything related to Ordinals Theory. I'm posting this because I believe this subject is much more fun and intriguing compared to any other altcoin or token out there. I ask you to read patiently, probe my arguments if you think they're lacking, and possibly be open to a new collecting hobby.
To understand Rare Satoshis, we first need to understand Ordinals (Bitcoin NFTs). This IS NOT a post about NFTs, I promise! However, in the journey to create Bitcoin NFTs, Casey Rodarmor, the creator of ordinals.com discovered a much more interesting and intriguing asset: Rare Satoshis.
The first part of Ordinal Theory concerns itself with satoshis, giving them individual identities (ids) and allowing them to be tracked. The second part (required for Bitcoin NFTs) concerns itself with binding data posted on the Bitcoin network to satoshis through a "convention".
Let's dive into this first part! This part of the Ordinals Theory creates two "strong conventions" (I'll explain why I'm calling them "strong" in a minute):
- Satoshis are assigned IDs from 0 to 21 quadrillion in the order of their creation.
- The flow of satoshis from inputs to outputs in Bitcoin transactions is done First-In-First-Out. (sending a UTXO containing 1,000,000sats to two addresses: 500,000 to the first and 490,000 to the second, will send the first 500,000 to the first address, 490,000 to the second, and the rest of 10,000 sats to the miner's address adding the block)
As Bitcoiners, we understand that sats are simply a measuring unit for Bitcoin. By default, the Bitcoin Network has no way of identifying a particular satoshi. However, I would argue that UTXOs can be seen as sats containers, and unlike a glass of water where you have the water molecules chaotically moving through the glass, UTXOs are static and much more akin to a stack (of sats). Yes, sats are a measuring unit, but they are more similar to millimeters than to milliliters. Millimeters of material, unlike milliliters can be preserved when moved and uniquely identified. That's what Ordinals Theory does.
Let's now circle back to why I call the two conventions needed to identify sats "strong conventions", and why this part of the Ordinals Theory makes much more sense than the second. Occam's Razor is the problem-solving principle that recommends searching for explanations constructed with the smallest possible set of elements. In simpler words, this principle states: "The simplest explanation is usually the best one." This also applies to conventions. When a convention is created to aid a certain purpose (in this case identifying an tracking sats), the simplest rules are the preferable ones. In this case, both the way to assign ids(incremental, starting from 0) and the transfer rule (FIFO) for sats are the simplest ones. The fact that these conventions follow Occam's Razor principle emboldens us to believe that even with Ordinals Theory erased from the collective memory, the next attempt at identifying and tracking sats will be based on the same exact conventions that the current Ordinals Theory postulates.
Now that we understand how sats are tracked, we can dive into what makes a satoshi rare. There are multiple types of satoshis that have interesting properties. The broader classification includes:
- Satoshis interesting by virtue of their historical significance. This category includes (but not limited to): Satoshis involved in the first bitcoin transaction made in Block 9, Satoshis held by Nakamoto, Satoshis from the first 1000 blocks (vintage sats), Satoshis involved in the famous 2010 pizza transaction (pizza sats) and other
- Satoshis interesting by virtue of their block position. This category includes uncommon satoshis (first sat mined in a block), rodarmor rare satoshis (first sat in the first block after a difficulty adjustment), epic satoshi (first sat in the first block after a halving event) and more
- Satoshis interesting by virtue of their numerical appeal. This category includes palindromic satoshis, satoshis that are in the Fibonacci sequence, and more
I would argue that it makes sense to dive into this asset class because (1) it's fun, (2) they can be discovered (especially among old Bitcoin), (3) they can be "hunted" from different sources by shuffling your Bitcoin around, and (4) they can be traded. Caution is advised when trying to hunt them because this activity usually involves sending your Bitcoin to custodial actors such as Binance, in hope that you will withdraw another set of sats that are rare.
Part 2: How are Rare Sats trustlesly traded?
Transfering
UTXOs containing rare satoshis can be transferred untouched by simply making sure that the transaction that involves them as input contains an output of identical size and at an identical offset. Say I want to transfer a UTXO of 1000 sats from address A to address B without losing any of the 1000 sats. I will add the UTXO as input 0 and another UTXO that doesn't involve sats that i prefer to keep as input 1. Output 0 will have the same size as the input and go to address B, and output 1 will be the change. We do this to preserve all satoshis form our UTXO that contains rare sats and pay the fees with sats from another, less interesting UTXO.
Trading
When you want to sell rare sats in a trustless manner, you sign a PSBT (Partially Signed Bitcoin Transaction) with SIGHASH_SINGLE|ANYONECANPAY. What that means is that you agree to involve a UTXO (that contains the rare sats) in a transaction (as input) if and only if you get an output with the desired amount of BTC to a specified address. This PSBT is stored by the marketplace and is then publicly displayed as "for sale".
When the buyer decides to go for the trade, the marketplace gets the buyer to sign the other inputs of the transaction ( the full transaction is shown in the image below).
https://pbs.twimg.com/media/GC6_xd-WYAAoCzh?format=jpg
In a typical marketplace transaction, the buyer signs the transaction, sends it to the marketplace and the marketplace puts together the full Bitcoin transaction and submits it.
The necessity for padding UTXOs exists because to have the buyer receive the rare sats, while still having the input with the rare sats at the same index as the output with the payment (required so that the input UTXO with rare sats of the seller to be involved in the transaction), we need two random inputs from the buyer on positions 0 and 1, and an output with the sum of these two inputs at index 0, so the output at index 1 can be reserved for the rare sats (having the same number of sats as the input with the rare sats and going to the buyer).
Part 3: The implications of rare sats trading
One can observe that the trading of these assets has several implications in the Bitcoin Network. I'll briefly list them:
- Extra miner revenue (by isolating rare satoshis in the coinbase transaction and selling them). This already happens and can be seen in recent coinbase transactions (example)
- MEV now possible on bitcoin and the RBF flag renunciation ( more details here)
- Possible, brief spikes in network hash power around the halving block. The epic satoshi mined in April 2024 halving was sold for more than $2m
That's all! I thought this asset class might be much more interesting for Bitcoiners here than any other altcoin or on-chain image collectibles. I can see an appeal in collecting rare sats, similar to how humans collected old and special coins throughout history. The infrastructure needed for this activity is evolving and is getting better and better UI/UX. You can engage with Rare Sats by using a wallet that recognizes them (such as Xverse and trading them on marketplaces such as Magisat. Let me know your thoughts!