How Bitcoin Ordinals Use Taproot and Witness Data to Inscribe On-Chain Content

The Ordinals protocol assigns a unique serial number to every satoshi based on its mining order, enabling specific satoshins to be tracked across transactions without additional on-chain state. Inscriptions embed arbitrary content into a Bitcoin transaction's witness data using a tapscript envelope wrapped in an OP_FALSE OP_IF block, which is parsed but never executed during script validation. This means the embedded data does not affect transaction validity and sits as inert bytes readable only by the ord indexer. The process uses a two-step commit-reveal sequence: a commit transaction creates a Pay-to-Taproot output referencing the inscription data, while the subsequent reveal transaction broadcasts the full tapscript to the network. This approach is not an exploit but a legitimate use of segwit witness data rules, allowing up to roughly 4MB of content per input at relatively low fee cost.