Bitcoin blockchain fees have surged to two-year highs as Bitcoin Request for Comment (BRC-20) tokens and the rising popularity of the Ordinals protocol drive demand for block space.
Average transaction fees on the Bitcoin network hovered near $20 during European business hours on Monday, up from last week’s average level of $1.20. Such levels were previously observed in May 2021 when bitcoin prices hit a then-record high of $60,000.
The number of non-fungible tokens (NFT) tied to the Bitcoin blockchain surged to over 3 million last week after a day’s surge in activity that consisted mostly of text-based assets, data from Dune Analytics showed.
The tokens, called inscriptions, work according to the ordinals protocol. Ordinals allow users to embed data on the Bitcoin blockchain by inscribing references to digital art into small Bitcoin (BTC)-based transactions.
The BRC-20 token standard allows users to issue transferable tokens directly over the network – which has resulted in a collection of digital artworks and meme tokens based on Bitcoin.
Data from OrdSpace, which tracks BRC-20 data, shows that over 11,000 tokens issued on Bitcoin are available on the open market as of Monday, with a cumulative market cap of $1.6 billion.
So far, Ordinals Marketplace Ordi (ORDI) tokens are the most valuable BRC-20 tokens with a market cap of $220 million and 7,300 unique ordi token holders. Ordi is said to be the first BRC-20 token to be staked on Bitcoin, which could also support its value proposition among holders.
Pepe tokens on Bitcoin – unlike those issued on Ethereum – are the second largest BRC-20 issuance, albeit with a relatively small market cap of $17 million.
Meanwhile, some analysts see the rapid transaction activity as a sign of network adoption, adding to Bitcoin’s fundamental narrative.
“During the last peak in 2019, most bitcoin transactions tended towards larger transactions in the $1,000 to $10,000 range,” said Tom Rodgers, head of research at ETC Group, in an email to CoinDesk.
“This suggests that most Bitcoin users have used the blockchain for trading. Compare this to today. The largest cohort of bitcoin transactions – 359,560 – came from transactions below $1. This indicates a huge increase in bitcoin velocity — or the amount of bitcoin transacted by users, rather than being locked away in cold wallets and held for the long term,” Rodgers added.
While adoption has been brisk, network congestion has briefly caused problems for crypto exchanges like Binance, which paused bitcoin withdrawals twice over the weekend.
Therefore, on-chain data shows that there were nearly 415,000 unconfirmed Bitcoin transactions as of Monday’s writing, which is more than anything seen during the 2018 and 2021 bull runs.
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.