Bitcoin News Today: Bitcoin’s JPEG War: A Battle for Network Soul

Bitcoin’s network is facing increasing scrutiny over its use for non-financial purposes, as concerns around spam and inscriptions continue to grow. Adam Back, founder of Blockstream, has publicly called for protocol-level changes to address what he describes as a "JPEG industry" that is undermining the core economic incentives of Bitcoin. He argues that the network is being misused for content storage, particularly through the rise of Ordinals, a system that allows for the inscription of data—including images—onto the Bitcoin blockchain [1]. This, according to Back, not only inflates transaction fees but also diverts attention from Bitcoin’s fundamental role as a digital currency.

The issue has gained traction following a surge in inscriptions, with the Bitcoin network recording over 100 million image inscriptions by August 2025. The trend began to accelerate in May, when the network carried over 88 million inscriptions, generating up to 7,000 BTC in monthly fees—approximately $250 million annually [1]. While these fees represent a small portion of miner revenue, Back warns that during peak traffic periods, the congestion caused by these inscriptions can prevent regular users from accessing the network for standard transactions. This has raised concerns among developers and node operators about the long-term sustainability and security of the Bitcoin network.

Ordinals, which began gaining popularity in 2023, have become a focal point of the debate. The system, which allows users to assign unique identifiers to satoshis (the smallest unit of Bitcoin), has been used to create digital collectibles, akin to NFTs on other blockchains. However, unlike NFT platforms such as Ethereum, which are explicitly designed for such use cases, Bitcoin’s developers have historically emphasized its role as a peer-to-peer electronic cash system. The surge in Ordinals has led to growing discussions about the need for a consensus-driven solution to regulate or limit such content [1].

Currently, miners still have an incentive to include JPEG-based inscriptions in blocks because they generate fees. This has led to the development of specialized block-building strategies to optimize the inclusion of such content, further fragmenting the network’s consensus on ideal usage. While some Bitcoin developers are researching ways to maintain block propagation efficiency, there is no clear agreement on how to proceed. BitMex research has highlighted potential issues with content-heavy blocks, particularly in terms of propagation delays and network stability [1].

The controversy over inscriptions has also raised broader questions about who ultimately controls the Bitcoin network. Adam Back emphasized that while protocol developers are stewards, they require consensus from users to enact significant changes. Core developer Luke Dashjr has similarly argued that users, rather than developers or node operators, determine what content the network carries. This decentralized governance model complicates the path toward a unified solution, as any proposed change must be accepted by the broader user base [1].

The cumulative impact of inscriptions has been significant, with over 97 million total inscriptions on the network and over $795 million in total fees paid to date [1]. Although the NFT market has declined from its peak, the Bitcoin inscription market shows no signs of slowing. As the debate continues, the focus remains on finding a sustainable balance between maintaining Bitcoin’s financial utility and accommodating new forms of data storage, all while ensuring network security and efficiency.

Source:

[1] Adam Back calls for new Bitcoin rules to curb spam and inscriptions (https://cryptorank.io/news/feed/fa539-adam-back-jpeg-spamming-bitcoin)