Following hints that MicroStrategy would enter Bitcoin software development as the Ordinals craze began last summer, the company announced the MicroStrategy Orange Decentralized Identity (DID) platform this week. The pervasive concept has applications for fighting social media bots and spam, verifying documents and protecting medical records.
When the specification for Orange was released on GitHub, it received a mixed response from crypto Twitter, partly due to the technical complexity of the plans. Here's a basic primer on the proposed digital ID system and how it might interact with Bitcoin.
What is Micro Strategy Orange?
MicroStrategy Orange is a Bitcoin-based Decentralized Identity (DID) system introduced by MicroStrategy Founder and Executive Chairman Michael Saylor and CEO of Engineering Cesari Racco at the MicroStrategy World conference on May 1st.
Microstrategy Orange is an attempt to optimize immutable, or permanently fixed, decentralized identities. These accounts gave individuals a way to control and verify their identity without relying on a central authority.
How is orange used in real life?
MicroStrategy says MicroStrategy's Orange and decentralized accounts can be used to authenticate users on social media apps or verify text messages or medical records over Bitcoin.
For example, a social media app can verify a user's DID with the Bitcoin blockchain and display an “orange check” to other users. Or a medical record's metadata—perhaps a hash of its content at some point—is stored on bitcoin to verify its owner and may not be modified. Public records such as land and housing documents can also be recorded on the Bitcoin blockchain.
What is DID: How does BTC and Bitcoin compare?
By establishing a decentralized identity system on Bitcoin, dubbed DID:BTC, users can benefit from the strong security and global decentralized network of the Bitcoin blockchain.
According to MicroStrategy, DID:BTC uses a modified ordinals text. In the year Introduced in January 2023, digital assets (images, text, music, videos) are “written” on an individual Satoshi, the smallest denomination of Bitcoin.
In the case of MicroStrategy Orange, the mapped space is used to store DID-related information and updates. This identity, authentication and verification information will be separate from other digital data – such as images or documents – stored elsewhere.
As a result, DID-verified files could be created and updated without size or content restrictions, but using a cost-effective method introduced by the Segregated Witness (SegWit) protocol in the Bitcoin network.
Introduced in 2017, SegWit increases Bitcoin's blockchain capacity by separating signature data from transaction data, reducing transaction size and enhancing scalability.
What does the proposed DID:BTC specification tell us?
An initial draft of the Bitcoin Orange plan has been published on GitHub, allowing for public inspection, feedback, and ultimately online discussion and collaborative edits. While largely technical, it covers a number of key topics, including how data is captured in Bitcoin scripts and privacy implications.
For example, the spec allows for on-chain updates to the DED:BTC token. While the original DID tag is immutable, its associated content and keys can be modified.
Updates to DED:BTC identifiers are done using JSON, a data exchange standard format.
Meanwhile, when de-identification is required, MicroStrategy DID:BTC can be destroyed by “de-identification” – setting a flag using the remaining UTXO (unprocessed transaction output).
What are critics saying about Microstrategy Orange?
Reactions to MicroStrategy's announcement were mixed on Crypto Twitter, with some Bitcoin fans saying DID data was unacceptable on the world's leading blockchain. It's the same reaction we've seen to the rise of mainstream texts with Bitcoin meme coins through the BRC-20 and Runes token levels.
Taproot Wizards CEO Udi Wertheimer joked that the “laser-eyed Maxis” backing Sailer's big bitcoin purchases are in complete disarray, bringing “institutional-grade spam” to the blockchain.
“I don't like shitcoins at all, but if I close my eyes, this speech sounds like it's coming from the US government,” said one post, while another called Saylor a “fed boy.”
“WTF is this dog spitting garbage? Nothing at all. No,” replied the other.
Saylor pointed out the business implications of Ordinals' articles as soon as they came out, Bitcoin proponent and venture capitalist Preston Pisch.
When can we use oranges?
MicroStrategy did not say when the Orange Protocol would come online, and noted that the information published on GitHub was an unofficial early draft. Even when it's done, it's unknown whether other Bitcoin projects, crypto platforms or applications will use it.
Edited by Ryan Ozawa and Andrew Hayward.
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