What are Mordinals?

by | Jun 6, 2023

Bitcoin Ordinals protocol, launched by Casey Rodarmor in January, has opened doors for users to attach data to a single satoshi, basically NFTs on Bitcoin. It is now possible to inscribe arbitrary data alongside Bitcoin transactions, thanks to the Ordinals protocol, which keeps track of these satoshis, the linked data, and their unique identifiers, facilitating nonfungible tokens on the network.

Mordinals, on the other hand, are a modified implementation of Ordinals on the Monero blockchain. Unlike Ordinals, which require data to be stored in the “witness” part of a Bitcoin transaction, Mordinals use the “tx_extra” field that exists within each Monero transaction. While this has been technically possible on Monero since 2014, there has been no support for it until now.

Privacy at Risk

However, the introduction of Mordinals has sparked criticisms from the Monero community, particularly regarding its impact on the network’s privacy. Monero’s community values privacy above all else, and the introduction of NFTs on a network that strives to make its tokens as unremarkable as possible was never going to be easy.

To protect user privacy, Monero transactions are signed using “ring signatures,” which bundle a transaction with a set of fake ones. But if an attacker with enough capital flooded Monero blocks with Mordinals, it would be easy to distinguish actual transactions from the dummy NFTs. This is a genuine concern for Monero, especially since the United States Internal Revenue Service offered a $625,000 bounty in 2020 to anyone who could help track Monero transactions.

Decentralization at Risk

Another criticism of Mordinals is its potential impact on decentralization. As blocks get bigger, storage requirements for nodes increase, which could disincentivize smaller nodes from staying online. While the protocol could be upgraded to allow nodes to prune these transactions, filtering out certain blocks or transactions could be construed as censorship, which goes against the very principles of blockchain.

In conclusion, the introduction of Mordinals on the Monero blockchain has sparked concerns and criticisms from the community, particularly regarding its impact on privacy and decentralization. While it is possible to upgrade the protocol to address these issues, it is important to ensure that any changes made do not compromise the principles of blockchain.

Should Monero Upgrade?

The Monero community has expressed concerns about Mordinals potentially causing the blockchain to expand abnormally, as Monero has a dynamic block size, unlike Bitcoin. However, on-chain metrics indicate that blocks are not growing significantly faster. While Mordinals’ impact on privacy cannot be ignored, some experts argue that the risks can be mitigated through updates to the protocol.

Cake Wallet vice president Justin Ehrenhofer believes that Monero should take steps to limit certain behaviors, as it has done for other privacy and fungibility risks. He emphasizes that the privacy, security, and efficiency of XMR are prioritized first and foremost. To limit the size of the tx_extra field within Monero transactions to 256 bytes, Ehrenhofer suggests that this could significantly increase the attack cost of flooding the network with dummy transactions while providing flexibility for future use cases.

While some Monero holders view NFTs as a threat to privacy, others recognize their potential value and believe that privacy can be maintained. According to Apollo Greed, CEO of gaming merchant service firm QGlobe Games, there’s enormous potential for privacy-conscious NFTs in protecting financial data while selling in-game assets.

In conclusion, while concerns about Mordinals’ impact on privacy and decentralization are valid, experts believe that the risks can be mitigated through updates to the protocol. It is important to prioritize privacy, security, and efficiency in any changes made to the Monero blockchain to maintain its strength and integrity.

For those wanting to dive into Mordinals further, checkout mordinals.org and if you are interested in minting your own Mordinal take a look at the Mordinals Handbook here

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