Bitcoin Transaction Fees Hit Six-Month High Due to Surge in Ordinals Incriptions
Summary:
Bitcoin transaction fees approach a six-month high of nearly $6 due to increased competition for block space, largely driven by inscriptions from non-fungible tokens known as Bitcoin ordinals. The backlog of unconfirmed transactions has also surged to over 120,000, resulting in higher revenues for Bitcoin miners from fees.
The average Bitcoin (BTC) transaction fee is nearing $6, the highest it has been in almost six months, due to an increase in inscriptions creating competition for block space, according to data from BitInfoCharts as of November 7th. Bitcoin ordinals are back in discussion as their return is driving up the cost of on-chain transactions this week. Ordinals, non-fungible tokens (NFTs) that store data directly on the blockchain, have been reminiscent of the second quarter of this year, occupying more blockspace with their inscriptions.
When BRC-20 ordinals enter the blockchain, they lead to a higher volume of transactions that Bitcoin miners need to process. This inflates the mempool and results in fierce competition for confirmations of transactions. As a consequence, costs rise as transactions that lack adequate fees end up taking longer than usual to confirm.
GeniiData reports that nearly a million ordinal “mints” have been recorded in the past week. The principally active projects in the same period have shifted, with the leading minters currently being BEES, gpts, and HALV. Further, the BRC-20 coin $RATS is causing congestion in the mempool, leading to substantial increases in Bitcoin transaction fees.
At present, Bitcoin's mempool is experiencing a backlog of over 120,000 unconfirmed transactions, according to live data from Mempool.space. Comparatively, the queue housed fewer than 30,000 transactions at the start of October.
Social media chatter suggests that fresh minting initiatives may overtake the existing ones upon completion, propelling the fee trend further. Benefitting from the situation are Bitcoin miners, whose income from fees is on the rise. According to Glassnode, an on-chain analytics firm, 8.5% of Bitcoin miners' revenue on November 6th came from an increase in fee rates, marking the highest daily proportion since early June. As always, individuals are advised to conduct their own careful research as all investment and trading moves embody risks.
Published At
11/7/2023 8:02:58 AM
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