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FameEX Hot Topics | Analyst Claims Bitcoin is 'Under Siege' by BRC-20 Coins as Fees Rise

2023-05-10 16:14:20

The cryptocurrency industry is facing a new challenge witBitcoin transaction fees and volumes soaring to an all-time high. Axel Adler Jr, an analyst with a crypto data firm, has revealed that the minting of BRC-20 memecoins on the Bitcoin blockchain is causing a surge in block space demand, increasing the average fee per transaction to over $16, with a peak of $29 on May 9. This rise in transaction fees is also reflected in the average fee per block, which rose to $31 on May 8. According to Bitinfocharts data, there are currently over 400,000 unconfirmed Bitcoin transactions on the network.


The congestion on the network is being caused by the BRC-20 tokens that do not utilize smart contracts and operate only with wallets supporting the Bitcoin blockchain. Ordinal inscriptions have also increased from 2.5 million to 4.78 million in just over a week. The problem has become so severe that Bitcoin core developers are considering taking action against BRC-20 tokens and Ordinals, which they regard as network spam.


The high number of unconfirmed transactions on the Bitcoin network is keeping transaction prices elevated. Blockchain.com confirmed that the average transactions per block are at an all-time high of 3,778. The high demand for block space has caused total fees per block to temporarily exceed the block subsidy reward of 6.25 BTC for the first time since 2017. The increasing transaction volume is also confirmed by Bitinfochart data, which shows a new all-time high of 534,000 transactions in the seven-day moving average. However, the actual figure could be higher, with Bitinfocharts recording two higher spikes of over 600,000 daily transactions this month using raw values.


While the high transaction fees are concerning for users, it is good news for miners as profitability, or hash price, has surged by 66% since the beginning of the month. Nonetheless, Bitcoin developers are closely monitoring the network and taking action to resolve the issue, as they believe the congestion on the network could lead to a loss of confidence among investors.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.

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