Disclaimer: Information found on CryptoreNews is those of writers quoted. It does not represent the opinions of CryptoreNews on whether to sell, buy or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk.
CryptoreNews covers fintech, blockchain and Bitcoin bringing you the latest crypto news and analyses on the future of money.
Analyst asserts that Bitcoin is facing challenges from BRC-20 coins as transaction fees rise.
Rising fees and a backlog of transactions are affecting the Bitcoin (BTC) network, attributed to a trending new “token” standard, as noted by a CryptoQuant analyst.
On May 9, Axel Adler Jr, an analyst at the crypto data company, stated that the minting of BRC-20 memecoins on the BTC blockchain is driving the increased demand for block space, adding:
“Unlike traditional token standards, such as Ethereum's ERC-20, BRC-20 does not employ smart contracts and functions solely with wallets that support the Bitcoin blockchain.”
CryptoQuant reported that the average transaction fee surged, surpassing $16 and reaching a peak of $29 on May 9.
Bitcoin under pressure from BRC-20 "junk" coins: record fees and thousands of unconfirmed transactions!
"Unlike traditional token standards, such as Ethereum's ERC-20, BRC-20 does not employ smart contracts and functions solely with wallets that support the #Bitcoin blockchain."
by… pic.twitter.com/yCsrXGM38H— CryptoQuant.com (@cryptoquant_com) May 9, 2023
Data from Bitinfocharts also indicated a rise in average transaction fees, noting an increase to $31 on May 8 from approximately $19 the previous day.
On May 8, total fees per block briefly surpassed the block subsidy reward of 6.25 BTC for the first time since 2017.
On May 9, Bitinfochart data recorded a new peak in the seven-day moving average for Bitcoin transactions, reaching a high of 534,000.
However, the actual number may be higher, as Bitinfocharts noted two spikes exceeding 600,000 daily transactions this month based on raw values. On May 9, it recorded 598,000 transactions on the BTC blockchain.
Love them or hate them, ordinals are certainly causing a stir. 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
Related Posts
Blockchain.com has verified the data, confirming that the average transactions per block have also reached an all-time high of 3,778.
Average transactions per block. Source: Blockchain.com
As per Mempool Space, there are currently 400,000 unconfirmed transactions awaiting processing on the network, indicating that the backlog is not diminishing, which keeps transaction costs elevated.
Related:‘Bitcoin is not under attack:’ BTC maxis reassure concerns of a DoS offensive
On May 9, the total market capitalization of BRC-20 tokens exceeded $1 billion, as reported by Cointelegraph.
The situation has escalated to the point where Bitcoin core developers are considering measures against BRC-20 tokens and Ordinals, which they view as network spam.
bitcoin-core devs want to eliminate ordinals & BRC-20s
Miners likely want to double down on ordinals & BRC-20s to boost fees and the value of private mempools
Ordinals & BRC-20 holders seek the right to exist and pursue growth
Civil war https://t.co/QeoAHJpPN4— Ryan Berckmans ryanb.eth (@ryanberckmans) May 9, 2023
Moreover, the number of ordinal inscriptions has nearly doubled from 2.5 million to 4.78 million in just over a week.
This development is beneficial for miners, as profitability, or hash price, has increased by 66% since the start of the month.
Magazine: $3.4B of Bitcoin in a popcorn tin: The Silk Road hacker’s story
