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According to a CryptoQuant analyst, higher fees and delayed transactions are besieging the Bitcoin (BTC) network, and this is due to the popular new “token” standard.
On May 9, Axel Adler Jr., an analyst at the cryptocurrency data firm, explained that the minting of BRC-20 memcoins on the BTC blockchain is causing a surge in demand for block space, adding:
“Unlike traditional token standards such as Ethereum’s ERC-20, BRC-20 does not use smart contracts and only works with wallets that support the Bitcoin blockchain.”
According to CryptoQuant, the average transaction fee has skyrocketed, surpassing $16 and peaking at $29 on May 9th.
Bitcoin under siege from BRC-20 “junk” coins: record fees and thousands of unconfirmed transactions!
“Unlike conventional token standards, such as Ethereum’s ERC-20, BRC-20 does not utilize smart contracts and operates only with wallets supporting the #Bitcoin blockchain.”
by… pic.twitter.com/yCsrXGM38H— CryptoQuant.com (@cryptoquant_com) May 9, 2023
Bitinfocharts data also reports a spike in average transaction fees, recording a jump to $31 on May 8 from about $19 a day earlier.
On May 8, the total block fee temporarily exceeded the 6.25 BTC subsidy reward for the first time since 2017.
On May 9, Bitinfochart data recorded a new all-time high of the seven-day moving average of bitcoin transactions, peaking at 534,000.
However, this figure may actually be higher than that of Bitinfocharts, which recorded two higher spikes of over 600,000 daily transactions this month using raw values. On May 9, 598,000 BTC blockchain transactions were recorded.
Love em or hate em, ordinals are definitely shaking things up. The number of transactions on the #bitcoin blockchain reached a new all time high yesterday of 534,000. pic.twitter.com/NTWmPsdiLw
— Mati Greenspan (@MatiGreenspan) May 9, 2023
Blockchain.com confirmed that the average number of transactions per block is also at an all-time high of 3778.
There are currently 400,000 unconfirmed transactions on the network, according to Mempool Space, so the backlog is not being cleared, keeping transaction prices high.
Related: ‘Bitcoin is not under attack’: BTC maxis allays fears of a DoS offensive
As reported by Cointelegraph, on May 9, the total market capitalization of BRC-20 tokens exceeded $1 billion.
The problem has become so serious that Bitcoin core developers are considering taking action against BRC-20 tokens and ordinals, which they consider network spam.
bitcoin-core devs want to kill ordinals & BRC-20s
Miners likely want to double down on ordinals & BRC-20s to increase fees and the value of private mempools
Ordinals & BRC-20 holders want the right to exist and pursue growth
Civil war https://t.co/QeoAHJpPN4
— Ryan Berckmans ryanb.eth (@ryanberckmans) May 9, 2023
In addition, in just a week, the number of ordinal inscriptions almost doubled from 2.5 million to 4.78 million.
This is good news for miners as profitability, or the price of a hash, is up 66% since the beginning of the month.
