Ordinals boom pushes Bitcoin fees to record highs

The average Bitcoin network fee exceeded $37, hitting a yearly high. Expert opinions on the cost of sending transactions were divided.

The rise in fees in the blockchain was driven by another wave of activity in the Ordinals segment. This led to higher demand for space in blocks. At the time of writing, more than 280,900 transactions were waiting for confirmation in the mempool, according to Mempool.space.

Miners won, and users lost?

The beneficiaries were the miners, whose revenue surged to Bitcoin’s all-time-high levels around $69,000.

6.25 btc fees, 6.25 btc subsidy in this block. i guess we don\’t need to worry about mining incentive in the future after all. https://t.co/0aApwiobZG

— Adam Back (@adam3us) December 16, 2023

«6.25 BTC in fees and 6.25 BTC in block subsidy. I guess we don\’t need to worry about mining incentives in the future», said veteran of the industry and Blockstream CEO Adam Back.

Some users noted that such a level of network fees makes mass adoption of cryptocurrency problematic.

Currently the “high priority” #btc txfee is $37

How many people earn less than $37 daily?

5.39 BILLION people.

TWO THIRDS of the worlds population are currently excluded from sending a “fast” #bitcoin tx unless they want to spend more than a days income.

Well done maxipads. pic.twitter.com/0JhNbH0kS7

— Kawaii Crypto (@kawaiicrypto) December 17, 2023

«Сколько людей зарабатывают менее $37 в день? 5,39 млрд человек! ДВЕ ТРЕТИ населения мира в настоящее время лишены возможности отправлять “быстрые” биткоин-транзакции, если только они не готовы потратить больше своего суточного дохода», — написала трейдер Kawaii Crypto.

However, according to popular commentator hodlonaut, the network for this purpose is not intended, and high fees are its defence against attack. The expert argues that accessible transactions should use second-layer solutions such as Liquid Network or Lightning Network, which are designed for mass use.

Kinda blows my mind that so many people seemingly have never reflected on the obvious fact that fees will be high with high demand for block space.

Fees are currently artificially and temporarily high due to JPEG clownery, but it is nothing more than a glimpse into the future.…

— hodlonaut 80 IQ 13%er ?⚡? ? (@hodlonaut) December 16, 2023

«Меня просто поражает, как много людей, по-видимому, никогда не задумывались над очевидным фактом, что комиссии будут высокими при сильном спросе на пространство блоков. В настоящее время сборы искусственно и временно завышены из-за клоунады в формате JPEG, но это не более чем взгляд в будущее. Масштабирование не происходит на L1», — заявил hodlonaut.

Он уверен, что структура сети биткоина предусматривает постоянное повышение стоимости в соответствии с замыслом алгоритма консенсуса Proof-of-Work. Сохранить в этой ситуации низкие комиссии невозможно, что и показали провалившиеся форки вроде Bitcoin Cash, полагает эксперт.

Pор аналогичный взгляд высказал пользователь Beautyon.

On chain fees are $41.72. That means anyone with less than that amount cannot send on chain from their wallet.

Assuming that people want to actually use Bitcoin, anyone who has, say, $30 on chain in their wallet is now “locked out” of their Bitcoin.

It would be an interesting… pic.twitter.com/Z22HP3YFyi

— Beautyon (@Beautyon_) December 16, 2023

«Вы не можете остановить JPEG в биткоине. Жалобы только заставят делать их больше, что будет еще хуже. Высокие комиссии стимулируют внедрение L2 и инновации. Так что расслабьтесь и работайте», — написал он.

Основатель маркетплейса Ord.io под ником Leonidas отметил, что 17 декабря транзакции с «надписями» составили 57% от всего объема в блокчейне первой криптовалюты.

The Ordinals boom spills over to L2 solutions

At the same time, fees rose on other blockchains where Ordinals analogues are issued.

On 16 December gas spend on operations with “inscriptions” in the EVM-networks rose to a record level of $8.37 million. Of the total, $5.6 million went to Avalanche, while Arbitrum One stood at $2.1 million.

Over the last 24 hours, Avalanche users spent more than 77% of gas on inscriptions transactions. Over the week, the volume of such transactions reached 87% of the total. On BNB Chain the corresponding values are 39.7% and 72.9%.

On 15 December Arbitrum One experienced an outage of more than an hour due to a significant uptick in network traffic.

Recall that Bitcoin Core developer Luke Dashjr, junior stated, that Ordinals contribute to spam in the blockchain, and predicted an end to the “inscriptions.”