What Is Ethscriptions Protocol and What Is the Potential?

What Is the Ethscriptions Protocol？

Ethscriptions is a new way of creating and sharing digital artifacts on Ethereum using transaction calldata. It is a protocol launched in mid-June by the co-founder and former CEO of Genius.com, similar to BTC Inscriptions, which allows non-financial and arbitrary data to be written to Ether, and allows users to inscribe any type of file as long as the file size does not exceed 96KB.

How Do Ethscriptions Work？

• Any successful Ethereum transaction whose input data (when interpreted as UTF-8) is a valid data URI creates an Ethscription, provided the data URI is unique. Duplicate content is ignored. All valid mimetypes are supported.

• For the URI to be unique, no Ethscription from a previous block or a transaction earlier in the same block can have the same content.

• Any Ethereum transaction whose input data is the transaction hash of a valid Ethscription is a valid Ethscription transfer, provided the transaction sender is the Ethscriptions owner.

• The recipient of the creation transaction is the Ethscriptions initial owner. The sender of the creation transaction is the Ethscription's creator.

Annotation:

A URI (Uniform Resource Identifier) is a string representation used to identify and locate resources. It is used to uniquely identify a resource on the Internet, which can be a web page, file, image, audio, or other type of data.

MIME (Multipurpose Internet Mail Extensions) is a standard for identifying file formats and Internet media types on the Internet. It does this by assigning unique identifiers (MIME types) to different types of files so that they can be accurately interpreted and processed.

According to the Ethscriptions description, data is passed through the input data (calldata) of an Ether transaction. When an Ethscription is created, the data is embedded into the blockchain by passing a data URI in the calldata of the Ether transaction. Data URIs are usually Base64 encoded strings.

The Ethscriptions protocol implementation is not innovative and has been available since 2016. The approach has some drawbacks for example, Ethereum itself is not suitable for storing large amounts of data, and the data stored in Calldata is not dynamic and programmable.

As of this writing, a total of 425,895 Ethscriptions have been created with 20,139 users and 32,950 transfers have occurred.

Why Is Ethscription so Hot？

1. “New Technology” Gives Value to the Project

In the blockchain industry, new technology often attracts people's attention, or technology gives value to the kernel of the project. Although Ethscription's implementation technology is not new, Ethscriptions has brought this technology into the public's view.

2. Artificial Promotion

The founder of Ethescription is the former CEO of Genius.com, which received investments from A16Z and Dapper Labs. Also as the founder of Ethescription, he has a celebrity effect and can endorse the project.

In addition, we can pay attention to HUOBI's AMA about Ethscriptions held on Twitter for many times, in which the founder mentioned that it is 40 times cheaper to use Ethscription compared with the traditional nft gas fee of ethereum, and so on.

3. Wealth Creation Effect Raises Concerns

Take ETHS (the first “token” on Ethescriptions) as an example, the cost of one Ethecription in Mint is 0.8U, and the highest price in OTC trading reaches nearly 300U, realizing hundreds of times of income.

4. Similar Project ORDI's Popularity Raised Investor Expectations

In the blockchain industry, it is common to use the method of analogy to value projects. ethscription uses a similar technical approach as Ordinals to achieve this. After comparing the market capitalization of ORDI, investors have raised their expectations for Ethscription.

Despite the current community buzz, Ethscription is not without its drawbacks, though. As mentioned above, Ethscription is realized by storing the data in Calldata, and if tokens or NFTs are issued in the form of Ethscription, it needs to formulate a standard unified series and the indexing part of the data needs to be perfected.Ethereum casts its commercial moat with a strong ecology, and at present, the supporting facilities of Ethscription are not perfect, and there is no corresponding exchange market.

All in all, Ethscriptions Protocol is in its early days and needs more standardization and more infrastructure to improve. The extent to which it will eventually develop depends on the progress of developers and the enthusiasm of the market.

This article does not constitute investment advice. The information provided is for informational purposes only and should not be construed as financial or investment advice.

Cryptocurrency

investments carry inherent risks, and individuals should conduct their own research and consult with a qualified financial advisor before making any investment decisions.