How Do Inscriptions Affect Bitcoin Blocksize
Bitcoin subscriptions have increased the average block size of the cryptocurrency; see how this can impact the blockchain.
Impact of Subscriptions on Bitcoin Block Size
Very recently, “Inscriptions” appeared on the Bitcoin network, basically an application of the BTC blockchain similar to non-fungible tokens (NFTs), but not the same.
Unlike NFTs on other blockchains like Ethereum, these inscriptions are directly inscribed on the Bitcoin blockchain (hence the name). Inscriptions can be data, images, audio, video or even software.
As they are directly stored as a transaction on the blockchain, they are rapidly inflating the chain size. This has made these assets a hotly debated topic in the community regarding their impact on the future of cryptocurrency.
In its new report, on-chain analytics firm Glassnode showed how this new BTC app affected the network. One obvious implication was the block size, which was almost pushed to the limit.
In terms of impact on the total size of the blockchain itself, sign-up transactions have increased by 1.74GB since December 15, 2022 (when they first appeared), as shown in the chart below.
Looks like the size contributed by Inscriptions has been rapidly going up | Source: Glassnode
Compared to the total Bitcoin blockchain size of 444GB, Subscriptions represent an increase of around 0.4%. Most of this increase came from image signups, which is not surprising considering they are the most popular type on the market.
In total, 93.3% of the data footprint comes from images, while text inscriptions, the following, contributed around 4.59% to the increase. Audio, video, and other inscriptions had a small data footprint.
However, audio and video types were the largest in terms of the average size of Bitcoin Subscriptions. Its footprint is still the smallest because its frequency has been significantly reduced compared to types like images or text.
Subscriptions currently account for only 4.2% of all transactions on the network, but something interesting emerges when looking at the share of blocks they occupy.
The 24-hour MA blocksize share of Inscriptions in recent weeks | Source: Glassnode
Subscriptions occupy 47% of the block space right now, despite representing only 4.2% of transactions, showing how much richer this type of transaction is in data. At its peak, Inscriptions took up 60% of the block size.
Glassnode notes that blocks were often empty before Subscriptions appeared on the scene, with transactions only taking up 25-50% of the available block space.
“This has changed dramatically since the appearance of Subscriptions, with blocks now reaching between 80-90% saturation (3.2-3.6 MB),” the report explains. “Since blockspace cannot be stored for future availability, Inscriptions can be thought of as a consumer of blockspace that would otherwise be empty.”
As this is just the current impact of Inscriptions on the Bitcoin blockchain, a big question remains: what could be the longer-term impact on chain size? To answer this question, Glassnode modeled what the next 14 years would look like for BTC for three block size assumptions.
Evolution of the size of the blockchain | Source: Glassnode
The three block size assumptions (on which the simulations are based) are as follows: 1.35 MB (which is the 30-day peak average block size of pre-enrollment days), 2.50 MB (the average peak post-enrolment) and 4.00 MB (the theoretical upper limit).
Assuming the theoretical upper bound scenario holds, the size of the Bitcoin blockchain will have grown to 3.41TB by March 2037. With current hard drive prices, the hard drive needed to store a file of this size is only $ 120. This means that the future impact on on-chain data storage requirements is likely to be negligible.
BTC price
At the time of writing, Bitcoin is trading around $24,900, up 10% over the last week.
BTC has shot up today | Source: BTCUSD on TradingView
Featured Image of Vasilis Chatzopoulos at Unsplash.com, Charts by TradingView.com, Glassnode.com