Giant Bitcoin 'Taproot Wizard' NFT Minted in Collaboration With Luxor Mining Pool

Independent developer Udi Wertheimer claims he minted a giant image of what appears to be a bald, bearded wizard donning sunglasses and promoting “magic internet JPEGs” on the Bitcoin blockchain via the Ordinals protocol.

His announcements in the Discord channel “taprootwizards.com” and on Twitter sparked further flames of division between Bitcoin purists and Ordinals proponents. The block that minted the non-fungible token (NFT) was mined by bitcoin mining firm Luxor Technologies, which said it was “the largest Bitcoin block” ever mined.

Battle lines were drawn when the Ordinals protocol, which stores non-fungible tokens on Bitcoin, launched on the dominant blockchain last month. That showdown created two factions – purists who insist on using bitcoin BTC$66,498.86 exclusively for payments and Ordinals fans who welcome NFTs, including this “Taproot wizard” sketch that nearly filled an entire 4 megabyte (MB) block, incurred no transaction fees (although a premium off-chain fee was likely paid) and left Bitcoiners of both stripes mystified.

The image itself is a throwback to an early Bitcoin meme featuring a similar wizard, crudely rendered in MSPaint, inviting all and sundry to “Join us” on the then-popular r/bitcoin subreddit.

Read more: Bitcoin Community Erupts in Existential Debate Over NFT Project Ordinals

Bitcoin transaction blocks are capped at 4MB, while individual transactions are limited to 1MB unless a user directly approaches a miner to process a larger non-standard transaction (like the wizard NFT) that fills an entire block. The image, which was a massive 3.94 MB, had many Bitcoiners asking: Who would go through the trouble of processing this non-standard NFT mint (or “inscription” in Ordinals lingo) and why?

Earlier Thursday, Wertheimer tweeted about the Taproot wizard, stating that “we made history” and linking to the Taproot Wizards Discord channel. The channel contains a Jan. 31 announcement message from Wertheimer alluding to the future minting of the Taproot Wizard.

He and Luxor CEO Nick Hansen collaborated to ensure the Taproot wizard NFT was included in a block mined by Luxor, according to a Luxor spokesperson.

Amid much online criticism, Luxor Chief Operating Officer Ethan Vera tweeted the company views the Taproot Wizard as “short term R&D” as it looks to maximize the revenue potential for both the company and its clients.

"Luxor's payout method is based on a full-pay-per-share model, meaning miners get paid an equal market rate for their hashrate based on the total value of bitcoin and transaction fees mined in a given timeframe," Colin Harper, head of research and content at Luxor, told CoinDesk.

"Miners are paid the same regardless of how many (or how few) blocks Luxor mines in a given timeframe. As such, any transactions that weren't included in the NFT block would have been included in subsequent blocks and the variance would even out. This block did not affect miner compensation."

Veteran Bitcoin Core developer Luke Dashjr, who vehemently opposes having Ordinals on Bitcoin, says he’s developed a rudimentary “spam filter” that screens for inscriptions and prevents them from being relayed through the Bitcoin network. An inscription is when arbitrary content (like text or an image) is added to sequentially numbered satoshis (sats) – the smallest units in Bitcoin – to create unique “digital artifacts.”

Critics of Ordinals argue that NFTs will compete with traditional payment transactions by crowding blocks and driving up transaction fees.

Casey Rodarmor, creator of the Ordinals protocol, disagrees but isn’t fazed by Luke’s new invention. In fact, he welcomes it.

“It filters inscriptions from an individual Core node’s mempool,” Rodarmor told CoinDesk. “I actually told him how to look for inscriptions to filter them.”

UPDATE (Feb. 2, 2023 18:00 UTC): Adds data size of the NFT and a quote from Luxor's head of research and content, Colin Harper.