Imagine that you’re paying for a meal. On the back of one of the $1 notes you hand over, you sketch an image of the waitress. That picture will circulate with that $1 bill forever.
It’s an imperfect analogy, but that’s essentially what an Ethscription is. These new ‘digital artifacts’ are being created and traded as an alternative to the NFTs that everyone in the crypto space knows about.
NFTs: A Key Web3 Technology
NFTs have proven to be one of the killer use cases for blockchain technology. These unique or limited-edition, indivisible tokens now underpin a vast market for digital art, P2E gaming tokens, exotic CeFi and DeFi assets, identity applications, and more. They are one of the foundational technologies of Web3.
However, NFTs have their drawbacks – and there’s more than one way to create so-called ‘digital artifacts’. Following the massive success of Bitcoin Ordinals (a kind of NFT or digital artifact on the Bitcoin blockchain), Ethscriptions has launched to enormous fanfare.
But what exactly are Ethscriptions, how do they differ from regular NFTs, and what are the pros and cons of using them?
What Are Ethscriptions?
Ethscriptions are a new way to mint one-of-a-kind digital items on Ethereum. In this respect, they are similar to NFTs. However, under the hood, they work in a completely different way, and are more like Bitcoin Ordinals.
While Ethscriptions are simpler than NFTs, they also offer significant advantages, including gas-efficiency and a high level of decentralisation, since all the data they require is stored on-chain.
Ethscriptions have seen huge interest since they were launched on 16 June 2023 by Tom Lehman (also known as Middlemarch online), with over 420,000 being created at the time of publication. Lehman also launched Ethereum Punks as a proof of concept – and because the original Ethereum CryptoPunks is iconic and has been endlessly copied on every platform – though Yuga Labs (the owner of CryptoPunks) has since asked him to take down the website and delete his tweets.
‘It’s the Venmo notes field, but you put an image in there.’
The big difference between Ethscriptions and NFTs is that Ethscriptions use ‘calldata’ – a read-only field for notes that generally isn’t used for regular transactions, but that holds data required by a transaction or smart contract – to embed the image on the blockchain itself. In contrast, NFTs require a complex smart contract to manage ownership of the token, and that contains a link to the image data stored somewhere externally (for instance, on IPFS, or even Google Drive, in many cases).
One way Lehman describes this process is like using Venmo to send a friend money, but instead of including a reference like ‘pizza’ or ‘thanks for the drinks’ in the notes field, you include an image.
Ethereum calldata is much the same. It’s a way of including extra information in an otherwise simple payment. Once you’ve sent a transaction that includes some notes in calldata – including an encoded image – that information is stored on the blockchain. Over the years, people have often used calldata to send messages and embed ‘notes’ in the blockchain. It’s certainly not the first time that users have done this, but Lehman has capitalised on the success of Bitcoin Ordinals (which use a similar method to store or ‘inscribe’ images in otherwise unused block space on the Bitcoin blockchain) to create a new kind of Ethereum artifact, and built a set of tools to make it easier to create and transfer Ethscriptions.
In practice, Ethscriptions are created by taking a unique image (which must be no more than 96 kb), converting it into a format called a Base 64-encoded data URI, and sending that data to yourself in calldata with a zero ETH transaction. Every Ethscription has a unique ID number (its transaction hash) that is used when transferring it to another address. All the tools you need to do this can be found on https://ethscriptions.com.
Ethscriptions are therefore NFT-like, but also quite different in certain ways.
Ethscriptions vs NFTs
There are pros and cons to using Ethscription and NFTs, which use very different mechanisms to link image data to a blockchain address.
- On-chain/off-chain. Most NFTs link to the image metadata from their smart contract, while Ethscriptions store the image on-chain in calldata.
- Decentralisation. That makes Ethscriptions more decentralised, because they’re not relying on external hosting and storage.
- Cost. The simplicity of Ethscriptions, which do not rely on a complex smart contract, makes them cheaper to create and transfer in gas terms – potentially up to 40 times more efficient, according to Lehman.
- Composability. However, the simplicity of Ethscriptions means they cannot be integrated with smart contracts in the same way that NFTs can be; they are inherently less flexible.
- Image size. Additionally, Ethscription images can only be a maximum of 96 kb as a result, whereas NFT images can be megabytes or even gigabytes.
- Infrastructure. Because Ethscriptions are a new development, marketplaces and other services are (for now) less developed than they are for NFTs – which have enjoyed years of popularity.
- Future-proofing. Image data for Ethscriptions is stored on-chain, making them more robust and reliable than NFTs, which rely on hosted storage or IPFS. However, a proposal to be included in Ethereum’s ‘Purge’ will remove calldata that is more than a year old, to save space. A workaround would be needed to prevent Ethscriptions images from being deleted, should this be passed.
While they’re similar in some ways, then, Ethscriptions and NFTs will have different applications, depending on what technology and features the use case requires.
The blockchain world is growing quickly and moving fast. There’s room for Ethscriptions, NFTs, and other kinds of digital artifacts that may be developed in the future.
Check out Ethscriptions.com for more information!