Bitcoin’s sky-high price inscription was spent by mistake just because of this wrong step

Not long ago, when a community member purchased inscriptions, he accidentally released the UTXO occupation in his wallet, causing his three Bitfrogs to be transferred out as Gas. About 150,000 yuan was lost in vain.

Three frogs transferred by the user, source: user wallet screenshot

This kind of "asset loss" incident that frequently occurs during the operation of inscription transfers has become common in recent times. Get to the bottom of it At the end of the day, it is actually because some users are not clear about some basic concepts in Bitcoin and inscription transactions, which leads to personal inscriptions being transferred as ordinary UTXOs in transactions, leading to tragedy.

This article aims to briefly introduce the reasons behind this problem, to help everyone understand the precautions when using inscriptions, and to avoid Such a senseless loss.

The UTXO mechanism behind Bitcoin and Inscription

First of all, we need to understand thatBitcoin’s transaction model is different from the bank account we usually use. It does not have an account, only UTXO (Unspent Transaction Output), which is an unspent transaction output.

In a Bitcoin transaction, each transaction has inputs and outputs. The money paid to you by others is the "transaction input". You The money received is the "transaction output".

At the same time, in order to make the verification and tracking of transactions more efficient, each UTXO is indivisible and unmergeable, and can only be used as input for transactions to be spent. , and after each transaction, the old UTXO will be destroyed and a new UTXO will be generated.

For example, Xiaobai has a UTXO of 1 BTC. When he transfers 0.5 BTC to others, there will be two corresponding transactions: one is Give the other party 0.5 BTC, and the other is 0.5 BTC in change. The other party gets a UTXO, and Xiaobai also gets a UTXO worth 0.5 BTC.

In short, a UTXO can be imagined as a "coin" of any amount, which cannot be broken up and used to make up for the transaction. Enter the amount and get change.

Secondly, the main representative of Bitcoin Inscription is the Ordinals protocol (BRC20 token), which assigns each Satoshi a serial number in the transaction. Track them, and users can attach additional data (images, videos, text, etc.) on the Bitcoin blockchain through Ordinals, making each satoshi unique and thus possessing the nature of an NFT.

The carrier of the Bitcoin Ordinals protocol inscription is UTXO - the Bitcoin inscription is engraved in the Segregated Witness data, so users cast the inscription, essentially All of them send Bitcoins that match the amount to the protocol, and the protocol returns you a UTXO with an inscription.

In the final analysis, inscription is to engrave information such as pictures, text and codes onto "Satoshi" and send it to the transaction to complete, A UTXO will be generated after each transaction. If the user wants to convert the inscription into an ordinary Bitcoin balance, he only needs to release the UTXO occupation.

And it is usually a UTXO of 0.00000546 BTC - in order to prevent dust attacks, the Bitcoin network limits the number of Bitcoin transactions in a single UTXO to no less than 546 satoshis.

So users transfer inscriptions, that is, Bitcoin wallets such as Unisat and OKX Web3 recognize the special format of these UTXOs and use these UTXOs as input through the corresponding protocols , and paid additional handling fees and transferred it to the other party.

If the user wants to convert the inscription into an ordinary Bitcoin balance, generally speaking, he only needs to cancel the UTXO occupation - after canceling, This part of the UTXO that originally belonged to the inscription can be spent as a handling fee.  

Why is the inscription missing?

Generally speaking, the wallet can identify the user's inscription, thereby avoiding the merging of this part of UTXO. Only when the user actively trades the inscription, will be transferred.

This is the last line of defense to prevent inscriptions from being burned. Currently, mainstream Bitcoin wallets such as Unisat and OKX Web3 also have protection mechanisms - supporting locking inscriptions function to prevent user assets from being "destroyed".

But if the user is not clear about the UTXO and inscription principles behind it and releases the occupation through the UTXO management function, then the reason for losing the inscription will also emerge. Out of the water:

Since the inscription is still UTXO in nature, when the user uses the wallet to transfer the Bitcoin inscription, if the user accidentally releases this part The UTXO containing the inscription can be easily processed as an ordinary UTXO, and finally the number is sent out.

This also means that these inscriptions may be transferred out as ordinary UTXOs. The whole process is completely random and is not subject to human intervention. Control, may be sent to counterparties or miners, making it difficult for users to retrieve the assets.

From this perspective, once the occupation is released, the included Ordinals assets will be regarded as ordinary balances and may be lost due to normal spending:

Either this part of the UTXO is used as a transfer balance, and the corresponding inscription or NFT asset is sent to the receiving address along with the balance;

Either this part of the UTXO is spent as Gas, and the corresponding inscription or NFT asset is sent to the miners along with the Gas fee;

In this context, contacting the other party to retrieve assets purely depends on luck and the other party's character.

In addition to the Ordinals (BRC20 token) protocol mentioned above, the well-known Atomics Protocol is another derivative protocol that engraves data on UTXO to implement Token. .

Although it is different from Ordinals originally designed for NFT, it uses Satoshi, the smallest unit of Bitcoin, as the basic "transaction unit", that is, the UTXO of each Satoshi Used to represent the Token itself, 1 Token = 1 sat, but since it is still UTXO in essence, it also faces the same problem.

How to avoid pitfalls in the field of inscriptions?

So users must take more precautions before operating inscription transfer transactions, and confirm the Ordinals, Atomics and other assets contained in the occupied UTXO To discard the inscription, you can also use a special wallet and try to isolate the payment address and the receiving address:

Confirm the validity of the inscription and Value:Before trading inscriptions, confirm whether they have actual value and significance, and avoid participating in inscription transactions that are invalid or of unknown value.

Use smart unoccupation function:Use smart contracts or specific functions to unoccupy the inscription UTXO to ensure that it will not be inadvertently used for other transactions.

Use a dedicated wallet that supports inscription locking: Choose a wallet that supports inscription locking to reduce the risk of inscriptions being misused or accidentally destroyed risk.

Isolate the payment address and the receiving address: Try to separate the payment address and the receiving address to reduce the possibility of the inscription being transferred by mistake.

Maintain continuous attention to Inscription transactions: Regularly check and monitor the status of Inscription transactions to ensure the safety of assets.

In addition, users also need to pay attention to other risks when operating Inscription transactions. The most common one is phishing that may be faced when using Google and Baidu search engines. Website promotion risks, users must pay attention to go directly to the official entrance of the official Twitter to enter, carefully screen the official website links, and be careful when authorizing.

At the same time, there is also the risk of fake inscriptions. For example, not long ago, there was a loophole in the OKX Web3 wallet Ordinals trading market, and a large number of fake Sats were displayed by pending orders - not careful. It can easily be mistaken for the inscription of the same name, causing many users to buy fake assets and incur losses.

Source: OKX web3 wallet screenshot 

Summary

Generally speaking, Inscription is an important milestone in the continuous evolution and innovation of the Bitcoin ecosystem in 2023, which greatly It has promoted everyone's attention and enthusiasm for participation in the Bitcoin ecosystem, and has also played a great positive role in the future development of the Bitcoin ecosystem.

But the Web3 world is a paradise for technical talents and hackers. Especially in the past two years, the security risks of the new track are like an asymmetrical one-way hunt. Killing is undoubtedly an inexhaustible free cash machine for technical geniuses, but for us ordinary users, it is more like a "Sword of Damocles" that will fall at some point.

For now, Inscription is still in the wild development stage. Everyone must pay attention to the related risks while participating. Don't leave the card table and hold on tight. Only with the assets in hand can you enjoy victory.