I understand the utility of non-fungible tokens. I think their use will be hugely important, and real-world assets being tokenized on a massive, decentralized, permissionless network (ie. Bitcoin) could be an excellent way to codify ownership of real-world assets.

That said -- and maybe this is just me not understanding it -- I feel like inscriptions on Bitcoin are not this.

If I understand correctly, inscriptions take an individual SAT and give it an attribute making it unique to all other SATs, so that it can be used to represent something unique.

The limited supply of bitcoin screws the whole thing up. If everything ends up being tokenized, suddenly there are only so many assets in the world -- even the digital world. But obviously there is no limit to the amount of assets that can be in the world -- so representing them with an asset that itself is limited seems like it's bad out of the gate.

Unless you think Ethereum should handle this sort of thing (I'm gonna go ahead and doubt that), then this needs to be a Layer 2 function, where the limited supply of bitcoin is no longer a sticking point. I'm not familiar enough with Taproot assets -- perhaps that is barking up the right tree?

And for clarification, this is not arguing for or against the use of asset tokenization. I just feel that it is inevitable and we either do it right or we leave it for someone to do it wrong. Either way it's getting done.

If anyone goes ahead and reads this, please poke holes. :-)

#bitcoin #inscriptions #ordinals #sats