The total fees paid for Ordinal inscriptions topped 272 BTC, around $7.6 million on Tuesday, according to a Dune Analytics dashboard. On Monday alone, over 372,000 inscriptions were created on the Bitcoin network—contributing to a daily record 682,281 Bitcoin transactions—with daily network fees hitting 23 BTC, or around $656,000.
I can't believe my eyes
BRC-20 demand leading to a 700% increase in fees AFTER what we've seen with Ordinal Inscriptions
12,800% increase in fees from BEFORE Ordinal Inscriptions launched
300,000 unconfirmed transactions in the mempool pic.twitter.com/oyLceu6ODe
— trevor.btc @ NYC (@TO) May 2, 2023
“Most of the acceleration is BRC-20,” Trevor Owens, Managing Partner at Bitcoin Frontier Fund, told Decrypt. The BRC-20 token standard made minting tokens and meme coins on the Bitcoin network possible, clearing the path for over 1 million more inscriptions to be added to the over 2.5 million already on the Bitcoin network in less than a week.
Introduced in March, BRC-20—or Bitcoin Request for Comment number 20—allowed the creation of fungible tokens using the Ordinals protocol launching a new wave of interest in minting NFT-like assets on the Bitcoin blockchain.
But while JPEGs are flooding the network, most inscriptions are still text-based.
“Text inscriptions are lower cost since you pay based on the size of the data,” Owens said. “So they are low-cost high volume, whereas JPEGs and digital media is high cost, low volume.”
LMFAOOOO 🤣🤣🤣🤣 pic.twitter.com/Nwe3q1Gt4C
— Udi Wertheimer 🧙♂️ (@udiWertheimer) May 2, 2023
Currently, the memory usage on the Bitcoin network is over 650 MB, double the initial 300 MB capacity, indicating a higher demand for computer memory due to the increased transactions and fuller blocks, according to data from Mempool. This increase may make running a node more challenging, but Ordinals proponents say it secures and strengthens the network.
“As long as the value gained from minting BRC-20 tokens is higher than the value lost to the inscription fees, we will see fees on Bitcoin continue to climb,” pseudonymous Twitter user @LeonidasNFT said, adding that higher fees on Bitcoin are a very good thing.
“It indicates strong demand for Bitcoin’s block space, which is critical for the long-term success of the protocol,” Leonidas said. “The days of only using Bitcoin to transfer BTC to your hardware wallet once every few years have come to an end.”
High fees benefit the Bitcoin blockchain by incentivizing miners, prioritizing valuable transactions, and enhancing network security. However, while loading up the Bitcoin blockchain with JPEGs and sending fees skyrocketing may be good for miners and the network’s security, it puts a higher price tag on transactions on the network.
“In February, we inscribed the Taproot Wizards collection, which took over 80MB of Bitcoin block space,” Taproot Wizards tweeted. “But now bitcoin transaction fees are so high, that if we tried inscribing the 80MB of wizards today, the fees would’ve cost us 32 BTC. Almost $1 million dollars.”
“I think this is the best thing that could have happened to Bitcoin,” Owens said, pointing out that the launch and development of Ordinals did not require changing the Bitcoin base protocol. “We’ve unlocked new use cases to bring in liquidity, new users, and lots of developers making Bitcoin more valuable through better user experience and more use cases is what we need to reach mass adoption.”