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.
In a recent development within the leading cryptocurrency network, Bitcoin Ordinals, which permits users to inscribe items onto the smallest unit of BTC, has experienced a significant reduction in daily fees. Data from August 22 indicates a sharp 24% decrease in total daily fees generated, falling from around $95,000 to $72,000. This decline aligns with the overall performance of Bitcoin’s prices, which have encountered downward pressure over the past two weeks, including a considerable drop last week that brought the coin closer to the $25,000 threshold.
Dune Analytics, a platform focused on monitoring on-chain activities across various blockchains, including Bitcoin, reports that the average daily fees from Bitcoin Ordinals decreased to $71,709 on August 21 from $94,910 on August 14. This decline in activity and fees follows an extended consolidation phase during which Bitcoin Ordinals activity and BTC prices showed minimal fluctuations in early August.
A direct link can be seen between the decline in Bitcoin prices and the minting of ordinals. The future direction of ordinal minting remains unclear given the current BTC price movements. As of August 22, more than 26 million inscriptions have been minted, generating $50 million in fees for miners.
Related Posts
The Bitcoin Ordinals protocol allows users to inscribe items, such as images or texts, onto the smallest BTC unit—Satoshis—integrating them into transaction blocks. Miners then verify these blocks, earning fees in the process. Unlike Ethereum, Bitcoin operates on a proof-of-work consensus, where miners contribute to security and decentralization. These miners play a vital role in ensuring the security of inscribed items, and the protocol guarantees that blocks remain full, enabling miners to secure higher fees.
On-chain data highlights that a considerable portion of inscribed items consists of text-based content. Typically, lighter items incur lower fees, while those inscribing larger items face higher fees. This dynamic influences the speed at which Bitcoin blocks fill up. As more users opt to inscribe larger items, blocks will reach capacity more swiftly, prompting those who wish to prioritize their transactions to pay increased transaction fees.
Bitcoin’s current condition remains under bearish pressure. The sustainability of Ordinals’ activity and the minting of “NFTs” on the network, as observed in the first half of 2023, is uncertain. Historical patterns indicate that falling asset prices frequently affect on-chain activity, as shown by the reduced Total Value Locked (TVL) in decentralized finance (DeFi) and the NFT market. As the market progresses, all attention is directed toward Bitcoin’s performance and its influence on the dynamics of its distinctive Ordinals ecosystem.
The post Bitcoin Ordinals Fees Witness 24% Dip Amidst Bearish Pressure on Prices appeared first on BitcoinWorld.
