Jack Dorsey-Backed Bitcoin Mining Pool Refuses To Process Ordinals Transactions – What’s Going On?

Last updated: December 6, 2023 20:52 EST
. 2 min read

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Jack Dorsey CEO of Block — Jack Dorsey. Source: a video screenshot

OCEAN – a newly launched Bitcoin (BTC) mining pool backed by Jack Dorsey – has updated its mining software to exclude Bitcoin ordinals transactions from the blocks that it generates.

Ordinals is a protocol for issuing NFTs and alternative tokens on the Bitcoin network – a feat most thought impossible for most of the asset’s lifespan.

After popularizing earlier this year, the online Bitcoin community was torn on whether ordinals were a net benefit for the network thanks to the new applications it provides, or a burden due to enabling transactions that the network was never intended for.

OCEAN CTO and Bitcoin core developer Luke Dashjr has taken the latter position.

““Inscriptions” are exploiting a vulnerability in #Bitcoin Core to spam the blockchain,” he wrote in a post to X on Tuesday, noting that the “bug” had been “fixed” in OCEAN’s latest upgrade.

“Bitcoin Core is still vulnerable in the upcoming v26 release,” he added. “I can only hope it will finally get fixed before v27 next year.”

We are happy to announce testing of Bitcoin Knots v25.1 has completed successfully, and is now deployed to production. Among other improvements, this upgrade fixes this long-standing vulnerability exploited by modern spammers. As a result, our blocks will now include many more… https://t.co/II3y0B6Pu4

— OCEAN (@ocean_mining) December 6, 2023

Less than a year after launch, Ordinals have left their mark on the blockchain in more ways than one. During times of peak activity, the sheer data size of related transactions has caused Bitcoin’s transaction fees to soar while radically slowing network settlement times.

Ordinals activity began surging again last month, taking Bitcoin’s transaction fees as high as $19 apiece. It’s even caused the network’s transaction fee revenue to rival that of Ethereum, which is the leading crypto network for on-chain activity.

Can OCEAN Prosper Without Ordinals?

Yet that revenue has proven very attractive to Bitcoin miners, who are the sole beneficiaries of high fees. As such, some crypto experts have questioned whether the new mining pool will be able to attract mining businesses by explicitly depriving them of extra juicy fees.

“They won’t get meaningful market share as a pool, probably under 1% long term,” predicted CoinMetrics co-founder Nic Carter on X.

OCEAN, by contrast, framed its decision as an opportunity. “We now also offer honest miners the first easy option to contribute toward blocks full of real transactions,” the firm claimed.

OCEAN was announced last week as a permissionless, transparent, non-custodial mining pool that charges 0% fees, aimed at decentralizing the highly concentrated mining industry.

As of today, just two Bitcoin mining pools (comprised of many different mining businesses) take up over 50% of Bitcoin’s total hash rate.