What are Ethscriptions?
Ethscriptions are a kind of on-chain digital artifacts (somewhat analogous to BTC Ordinals) created by MiddleMarch in the Ethereum ecosystem. They offer a new way to create and share digital artifacts on the Ethereum blockchain using calldata of transactions. Although the first Ethscription is said to have been created several years ago, the notable interest in them took off in June 2023. Their creator Tom ‘Middlemarch’ Lehmann presented his new project just a couple of weeks ago. He claimed that thirty thousand ‘new type NFTs’ had been minted during the first 18 hours and invited everyone interested to join the developing team to support the project.
Ethscriptions are created using Ethereum calldata for recording and storage of information directly on the Ethereum blockchain and the goal of their invention was to make ETH use cheaper and simpler for an ordinary user of the ecosystem. This is achieved via the relatively low cost of calldata usage. The project started with using images (however, Lehmann declared he was working on the project to support other formats) and each piece must not exceed 96 Kbytes. They seem more decentralized and cheaper, which ensures valid Ethscriptions’ distinctiveness, integrity and immutability.
The Ethscription protocol does not rely on third parties, the indexer data can be rebuilt and verified manually whenever the owner wishes.
The first collection based on a new protocol was the ‘Ethereum Punks’ project, inspired by the famous NFT collection called ‘Crypto Punks’. The demand for the invention is said to have turned into a frenzy even the official website API could not withstand. Such massive recent excitement showed the strong potential of Ethscriptions in the blockchain world.
More than six thousand of inscriptions (equal to 593 ETH, which is about 1 mln US dollars) have been traded at OpenSea platform already and a total of over three hundred thousand have been created recently.
What’s their difference?
Ethscriptions can be traded and stored as NFTs, and sometimes the two are easily confused. In reality, though, they are similar but not the same. What is the difference?
First of all, initially NFTs were smart contracts managed via blockchain which allowed users transferring the rights of ownership to a certain piece of property. Users created tokens converting digital files into new blocks, receiving proof of ownership and provenance. After the minting, an NFT becomes valuable and can be traded or stored. Ethereum smart contracts mint a token by defining their metadata and linking metadata of a file to it (metadata of different text formats will be different but the smart contract will always point to the external source, which is the content). ERC-721 NFTs can not be exchanged one-to-one, they represent one-of-a-kind assets.
In the case of Ethscriptions, NFT-like features are given to parts of the blockchain itself. Smart contracts are unable to read calldata, while Ethscriptions can and are actually pieces of calldata themselves. This fact makes them reasonably cheaper than traditional NFTs. In addition, having no smart contract logic, Ethscriptions are less composable in comparison. However, there is a hidden risk here. For example, EIP-4444 (a ‘Purge’ update on Ethereum proposal) may endanger the life load of Ethscription model of storage due to reducing transaction calldata.
There is also some difference between Ethscriptions and Bitcoin Ordinals, even though they have a lot in common (they both add data directly on a blockchain, individuals use them both for collectibles’ trading or adding information to transactions). There are significant differences in how they function. Bitcoin Ordinals are stored on the Bitcoin network within transaction data. The process is associated with high gas fees. Ordinals can also have identical images on several coins. They may contain video content (such as videos, images, text and even games) and their size may reach 4 Mbytes. Ethscriptions use transaction calldata, which offers more a decentralized inscription and cost reduction, avoiding high gas fees. Unlike Ordinals, Ethscriptions can only contain images (however, creators are going to add other types of data), and those images are completely unique no Ethscriptions within a block or transaction block can be the same. In addition, unfortunately, for now Ethscriptions are limited in size to only 96 Kbytes.
How does it all work?
The creation process starts from selecting the image and the NFT and converting them into the URL data format. The data is then converted into a hexadecimal representation. As long as the image is in the correct format, the user should make a ‘0 ETH transaction’ (entering the image data into ‘Hex data’ field) to create an Ethscription with the transaction’s calldata. The sender of such a creation transaction is the Ethscription creator, and the initial owner becomes the recipient of this transaction. Due to the rule that every Ethscription must be unique, if there is another transaction with the same hex data, the new transaction will be ignored.
Ethscriptions can be easily managed and tracked using the official website (ethscriptions.com), which offers a convenient guide of the creation process and allows browsing already created ones. To track their Ethscriptions, users need indexers. To prove the transfer ownership, the Ethscription ID is used.
Ethscriptions are transferred using their IDs, which can be also found on the special website. Then a ‘0 ETH’ transaction should be sent to the proposed recipient, with the Ethscription ID entered into the ‘Hex data’ field. Then the owner should update the page. Keep in mind that all unauthorized transfers are ignored.
The most popular platform for trading Ethscriptions is OpenSea, but there are other NFT marketplaces which support such procedures (such as EmblemVault). Ethscriptions can also be traded through private sales, but this is more risky because they are hard to monitor. Trading on an NFT platform is simpler and more reliable. The user simply needs to check if the chosen platform supports Ethscription trading and go for it. However, experts warn that Ethscription trading involves several individual transactions on the blockchain (including monetary transactions to send or receive payments).
Closing thought
Despite critics claiming that the technology is not new and has been failing to attract users until recently, every vegetable has its season and the time has come for Ethscriptions in an easy Tom Lehmann’s state of mind. Ethscriptions offer intriguing opportunities for new investors, which is proved by the recent frenzy and rising prices at marketplaces. No one can predict whether the protocol will be as popular in the distant future as it is now, since Ethereum infrastructure is constantly updating, but it will certainly grab its niche and open new horizons for blockchain users and NFT owners.
