In a heated debate that once again brings into focus the very soul of Bitcoin, Adam Back, a revered name in the cryptocurrency world, has voiced his concerns over what he terms “JPEG spam” cluttering the Bitcoin blockchain. On Friday, Back took to X (formerly Twitter) to express his discontent about this burgeoning phenomenon, which he believes dilutes the cryptocurrency’s primary purpose as a medium of exchange.
A Call to Preserve Bitcoin’s Essence
Adam Back, the co-founder and CEO of Blockstream, isn’t just any voice in the Bitcoin ecosystem. His contributions date back to the early days of Bitcoin, and his opinions carry weight. His latest comments have reignited the ongoing discussion about Bitcoin’s identity and its future direction. Back insists that Bitcoin should be considered “owned by humanity,” with developers serving as “stewards” who require consensus from users before making any significant changes to the network.
This philosophy is not new. Back recalls the block-size wars of 2015-2017, where user-led economic pressure effectively halted miners from implementing protocol changes that many felt would skew Bitcoin’s ethos. This historical precedent underscores the importance of community consensus in shaping Bitcoin’s path forward.
The Rise of JPEG Inscriptions
The crux of the current debate centers around JPEG inscriptions—digital images directly stored on Bitcoin’s blockchain, made possible by the Taproot upgrade and the Ordinals protocol. These innovations have led to a notable increase in the number of JPEGs on Bitcoin’s ledger, jumping from 88 million in May to 105 million by September, a staggering 20% surge. Alongside this, transaction fees associated with these inscriptions have ballooned to approximately 7,000 BTC, translating to an eye-watering $777 million.
Differing Views on Bitcoin’s Role
Proponents of the Taproot upgrade argue that as long as users are willing to pay for block space, any use of the network is legitimate. They emphasize Bitcoin’s nature as a permissionless system, suggesting that dictating its use contradicts the core principles of decentralization. Moreover, they argue that this so-called “JPEG spam” provides a valuable economic incentive for miners to maintain the network, particularly as block rewards halve every four years.
However, Back counters that the financial benefits for miners are negligible once increased hashrates and operational costs are considered. He estimates that JPEG inscriptions contribute a mere 0.1% to mining profits, a figure dwarfed by the potential reputational damage they could inflict, alongside higher transaction fees for everyday users and a reduced focus on Bitcoin’s primary role as a peer-to-peer monetary system.
A Fractured Community
The debate over JPEG inscriptions has exposed a schism in the Bitcoin community. Supporters view these inscriptions as a legitimate use of blockchain technology and an extension of economic activity. Critics, including Back, argue they squander valuable block space and detract from Bitcoin’s fundamental value proposition.
Back has proposed several potential solutions to address the issue, including engaging miners and mining pools to dissuade them from processing these transactions. He also suggests implementing wallet-level changes that could steer fees towards those rejecting these inscriptions. While he acknowledges the risk of centralization, Back believes that even minor economic incentives could make mining JPEG inscriptions unprofitable.
The Road Ahead
As this debate unfolds, it highlights the ongoing struggle to balance innovation with Bitcoin’s foundational principles. The outcome could shape Bitcoin’s trajectory for years to come, influencing how it is perceived and utilized.
Bitcoin’s history is replete with contentious debates and hard-fought compromises. The current discourse over JPEG inscriptions is another chapter in this evolving narrative. As the community grapples with these questions, it must weigh the benefits of innovation against the potential risks to Bitcoin’s identity.
The path forward is uncertain, but one thing is clear: the decisions made today will reverberate through the ecosystem for years to come. Whether Bitcoin remains primarily a peer-to-peer currency or evolves to encompass a broader range of applications depends on the collective will and wisdom of its global community.
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
