Bitcoin’s blockchain experienced a surge in volume over the weekend due to transactions involving “BRC-20” Ordinals, an emerging standard for issuing fungible tokens on Bitcoin. This caused network fees to skyrocket and transaction fee revenue for miners exceeded the natural block subsidy for the first time since 2017.
Meme Tokens on Bitcoin
As per data from Dune Analytics, over 3.7 million BRC-20 Ordinals transactions have already occurred, compared to just 631,630 non-BRC-20 Ordinals transactions. Additionally, there are over 4.7 million Ordinals inscriptions on Bitcoin, with most appearing in the past two weeks, indicating the recent activity is due to new fungible assets created by the BRC-20 standard.
BRC-20 is a “fun experimental standard demonstrating that you can create off-chain balance states with inscriptions.” despite being called a better solution, data shows that the market cap for tokens of this standard has surpassed $720 million, with tokens like “ordi,” a Bitcoin-based version of memecoin “PEPE,” and “meme” leading the pack. Transactions for these new memecoins are driving fees higher, creating a highly competitive fee market.
According to data from ycharts, the average Bitcoin transaction fee has skyrocketed to $19.21 as of Monday, up from just $2.90 last week. Glassnode data indicates that Taproot-related transactions have surged to 75% of all on-chain transactions, as opposed to just 1.5% at the start of the year. The congested network has created a significant boost to miner revenue. However, some view the development as a denial of service attack on Bitcoin, making transactions unfeasible for less wealthy populations in developing countries.
“Nodes can always decide to invalidate blocks by miners that include transactions they don’t consider valid,” suggested Bull Bitcoin CEO and Ordinals critic Francis Pouliot over Twitter. “Last resort and could be messy but it’s always possible.”