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Bitcoin ‘under siege’ by BRC-20 coins as fees soar, claims analyst

Altszn.com by Altszn.com
May 10, 2023
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Bitcoin ‘under siege’ by BRC-20 coins as fees soar, claims analyst
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Increased fees and a backlog of transactions are besieging the Bitcoin (BTC) network, and it’s due to a popular new “token” standard, according to a CryptoQuant analyst.

Axel Adler Jr, an analyst with the crypto data firm, explained on May 9 that BRC-20 memecoin minting on the BTC blockchain is causing the surge in block space demand, adding:

“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.”

According to CryptoQuant, the average fee per transaction has skyrocketed, exceeding $16 and peaking at $29 on May 9.

Data from Bitinfocharts similarly reported a spike in the average transaction fees, recording a jump to $31 on May 8 compared to around $19 the day prior.

On May 8, the total fees per block temporarily exceeded the block subsidy reward of 6.25 BTC for the first time since 2017.

On May 9, Bitinfochart data recorded a new all-time high on the seven-day moving average for the number of Bitcoin transactions, hitting a top of 534,000.

However, the figure could actually be higher than that, with Bitinfocharts recording two higher spikes over 600,000 daily transactions this month using raw values. On May 9, it recorded 598,000 BTC blockchain transactions.

Blockchain.com has confirmed the data reporting that the average transactions per block are also at an all-time high of 3,778.

Average transactions per block. Source: Blockchain.com

According to Mempool Space, there are currently 400,000 unconfirmed transactions pending on the network, so the backlog is not clearing, which is keeping transaction prices elevated.

Related: ‘Bitcoin is not under attack:’ BTC maxis allay fears of a DoS offensive

On May 9, the total market capitalization of BRC-20 tokens surpassed $1 billion, as reported by Cointelegraph.

The problem has got so bad that Bitcoin core developers are mulling taking action against BRC-20 tokens and Ordinals, which they consider as network spam.

Furthermore, the number of ordinal inscriptions has almost doubled, going from 2.5 million to 4.78 million in just over a week.

It is all good news for miners, though, as profitability, or hash price, has surged 66% since the beginning of the month.

Magazine: $3.4B of Bitcoin in a popcorn tin: The Silk Road hacker’s story