In short: Bitcoin's network fees surged to a level where transaction fee revenue for miners briefly exceeded the natural block subsidy for the first time since 2017 due to the increase in transactions involving BRC-20 Ordinals, an emerging standard for issuing fungible tokens on Bitcoin. Over 3.7 million BRC-20 Ordinals transactions have occurred so far, indicating that much of the recent activity is related to new fungible assets created by the BRC-20 standard. The average Bitcoin transaction fee skyrocketed to $19.21, and over 460,000 transactions await confirmation. This has created a profitable fee market with mining incentives for Bitcoin miners.
Our quick analysis:
Over the weekend, Bitcoin's blockchain was overwhelmed by a surge of transactions involving new fungible tokens called BRC-20 Ordinals. The network fees skyrocketed, causing transaction fee revenue for miners to exceed the natural block subsidy for the first time since 2017.
Data from Dune Analytics shows that over 3.7 million BRC-20 Ordinals transactions have already occurred, compared to only 631,630 non-BRC-20 Ordinals transactions. Furthermore, over 4.7 million Ordinals inscriptions are now on Bitcoin, signifying that most of the recent activity is related to new fungible assets created by the BRC-20 standard.
BRC-20 is an experimental standard, demonstrating that off-chain balance states with inscriptions can be created, making it possible to issue assets on Bitcoin. Even though BRC-20 has some reservations, it has surpassed $720 million in market cap for tokens of this standard, with cumulative trading volume over the past 24 hours exceeding $132 million.
However, transactions for these new memecoins are competing with ordinary BTC transfers for Bitcoin block space, making the average transaction more expensive, and designating an estimated 460,000 transactions still awaiting confirmation within the blockchain. Since Glassnode data indicates that Taproot-related transactions have risen to 75% of all on-chain transactions, it is almost certain that the crowded network is due to BRC-20 Ordinals.
This has led to many in the Bitcoin community being enthusiastic that BRC-20 tokens are driving up fees, meaning Bitcoin will have a profitable fee market with mining incentives even after the block subsidy dwindles to almost zero over the coming decades. However, others view this development as a denial of service attack on Bitcoin, making transactions unfeasible for less wealthy populations in developing countries.
All in all, Bitcoin's fees are exploding due to new memecoins, benefiting miners, and some are reluctant to view it as a positive development for some of the world's poorer communities.
Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
Our quick analysis:
Over the weekend, Bitcoin's blockchain was overwhelmed by a surge of transactions involving new fungible tokens called BRC-20 Ordinals. The network fees skyrocketed, causing transaction fee revenue for miners to exceed the natural block subsidy for the first time since 2017.
Data from Dune Analytics shows that over 3.7 million BRC-20 Ordinals transactions have already occurred, compared to only 631,630 non-BRC-20 Ordinals transactions. Furthermore, over 4.7 million Ordinals inscriptions are now on Bitcoin, signifying that most of the recent activity is related to new fungible assets created by the BRC-20 standard.
BRC-20 is an experimental standard, demonstrating that off-chain balance states with inscriptions can be created, making it possible to issue assets on Bitcoin. Even though BRC-20 has some reservations, it has surpassed $720 million in market cap for tokens of this standard, with cumulative trading volume over the past 24 hours exceeding $132 million.
However, transactions for these new memecoins are competing with ordinary BTC transfers for Bitcoin block space, making the average transaction more expensive, and designating an estimated 460,000 transactions still awaiting confirmation within the blockchain. Since Glassnode data indicates that Taproot-related transactions have risen to 75% of all on-chain transactions, it is almost certain that the crowded network is due to BRC-20 Ordinals.
This has led to many in the Bitcoin community being enthusiastic that BRC-20 tokens are driving up fees, meaning Bitcoin will have a profitable fee market with mining incentives even after the block subsidy dwindles to almost zero over the coming decades. However, others view this development as a denial of service attack on Bitcoin, making transactions unfeasible for less wealthy populations in developing countries.
All in all, Bitcoin's fees are exploding due to new memecoins, benefiting miners, and some are reluctant to view it as a positive development for some of the world's poorer communities.
Image provided by Unsplash
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
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