Bitcoin Transaction Fee Hits Two Year High as BRC-20 Tokens Cause Network Congestion
The deployment of Memecoins such as Pepe Coin (PEPECOIN-USD) on the Bitcoin blockchain has resulted in congestion problems and a surge in BTC transaction fees to a level not seen in two years. Ordinals, which are non-fungible tokens (NFTs) on the Bitcoin blockchain, were made possible by the upgrade, while memecoins can be traded using the BRC-20 standard.
A market capitalization of over $1 billion (£800 million) has been achieved due to the release of around 14,300 BRC-20 tokens. Ordi (ORDI-USD), a memecoin that honors the Ordinals protocol, is presently the most valuable cryptocurrency, with a value of $400m. Since the November 2021 Taproot upgrade, network activity, which processes transactions every 10 minutes, has increased, which has substantially impeded transaction settlement.
Some bitcoin pioneers, such as Max Keiser and Samson Mow, have voiced their opposition to the development. “Ordinaries are like barnacles on a ship’s hull,” Bitcoin advocate Keiser told Yahoo Finance UK. Humans have the ability to pollute both analog and digital environments, which can be compared to digital plastic pollution floating in the ocean. Transaction fees for Bitcoin (BTC -USD) have skyrocketed since the beginning of May, now averaging over $20. According to Dune Analytics data, ordinary inscriptions have skyrocketed, with users adding images, videos, and other content for a total of over 5 million inscriptions.
Marginalized peoples in developing countries will have to pay more to run their Bitcoin nodes and send transactions because privileged wealthy whites want to put JPEG drawings on the blockchain as status symbols. Just because you can doesn’t mean you should.
— Bitcoin is Saving (@BitcoinIsSaving) January 29, 2023
According to Samson Mow, the creator of JAN3, the current hype surrounding Bitcoin Ordinals and BRC-20 tokens is not sustainable and will likely fade away in the coming months. In an interview with Cointelegraph, Mow stated, “These individuals are essentially paying enormous fees directly to Bitcoin miners, and this cannot be sustained.” Let’s not discuss years here as they will disappear in a matter of months.Similar to the vast majority of activities on competing chains like Ethereum (ETH-USD) and Solana (SOL-USD), these are merely short-term moneymaking schemes.” According to the Twitter account ‘Bitcoin is Saving’, individuals in developing countries with Bitcoin nodes and transactions will face higher costs due to wealthy individuals wanting to use blockchain for status symbols by placing JPEG drawings on it.
Investors purchase BRC-20 tokens and NFTs using the highly sought-after UniSat wallet. To set up a UniSat wallet, users need to visit the UniSat website, download the extension, create a wallet with a strong password, and note down a 12-word recovery phrase. Users should be ready for the likelihood of front-running and high transaction fees because of the Bitcoin network’s high gas fee usage.