A week before the halving, the Bitcoin network is facing another wave of high demand, some of which is coming from a now-familiar source: ordinal traders.
On Thursday, data from mempool.space shows that Bitcoin users are paying over 90 sats/vByte of block space, putting the average cost of a transaction at $8.50 a piece.
Ordinals make their return
The increase in costs corresponds to a increase in daily registrations of ordinalswhich counted more than 162,000 on Thursday, compared to a monthly average of 90,280. Meanwhile, “daily spending on registration fees” reached $1.24 million, its highest level last month.
However, the vast majority of network fees were limited to regular transactions. Some suspect that on-chain trading activity is accelerating ahead of the Bitcoin halving, which will cut Bitcoin's supply inflation rate in half in about a week.
“I've been monitoring Bitcoin fees for a few weeks now, and they're starting to rise significantly again” wrote James Van Stratten, senior analyst at CryptoSlate, on Twitter Thursday. “Bitcoin Has Not Reversed Ethereum Fees in 2024; I think they might do it soon. The halving could be the catalyst.
It’s not just about halving: On April 19, the “Runes” protocol will be activated – a new token standard on Bitcoin invented by Ordinals creator Casey Rodamor. Just like the BRC-20 tokens before them, some expect that their trading activity at launch could result in fees exceeding $30 each.
“Launching runes during Bitcoin halving will launch memecoins during Bitcoin season,” TrustMachines CEO Muneeb Ali tweeted Monday. “As L1 breaks away from insane fees and activity, all roads lead to Bitcoin L2.”
The incoming Bitcoin fee wave
The tokens have been foreign to Bitcoin for most of the network's lifespan, although there is reason to believe they will immediately gain traction once introduced.
For example, Ordinals pioneered NFTs on Bitcoin less than 18 months ago and has already transformed the network into the most popular blockchain for NFT trading, surpassing Ethereum. Bitcoin's 24-hour NFT trading volume on Thursday was $28 million, compared to Ethereum's $9 million, according to CryptoSlam.
On the bright side, high Ordinal fees increase revenue for miners – the entities responsible for securing the Bitcoin network. The halving will naturally cut the bulk of miners' rewards in half, requiring higher network fees to make up the difference in bottom line.
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