Bitcoin’s average transaction fee has risen above $7, nearly quintupling total fees in two weeks, thanks to an Ethereum-style “BRC-20” surge and an NFT-like “Inscription” token on Ordinals. Coins are becoming more and more popular.
A surge in transactions on the bitcoin blockchain involving ethereum-style tokens and NFT-like “inscriptions” has congested the network, pushing average fee rates to their highest level in nearly two years, further boosting miners’ revenues.
The average fee per Bitcoin transaction rose to $7.25 on Wednesday (May 4), the highest level since July 2021.This compares with figures ranging from 50 cents to $4 this year, according to data from BitInfoCharts show.
As transaction activity surged, so did total Bitcoin fees.
Total Bitcoin transaction fees paid by users to miners increased to about 124 BTC, or about $3.5 million, on May 3, a 484 percent increase over the past 14 days, according to blockchain analytics firm Glassnode.
Colin Harper of Bitcoin mining pool Luxor Technologies:
“The current fees are very unusual.”
In recent days, a token called BRC-20 (a play on Ethereum’s ERC-20 token standard) has facilitated the issuance and transfer of fungible tokens on the Bitcoin blockchain, since its inception in 2018. About 6% of all bitcoin activity. According to analyst Dynamo DeFi, early March.
This year has also seen the rise of Ordinals Inscriptions, which are similar to NFTs that inscribe images or text into transactions on the Bitcoin network. Both operations require transaction fees.
Jimmy Zhang, who works on strategy and business operations at blockchain data firm Artemis, said:
“Increased BRC-20 transaction volume drives demand for Bitcoin block space.”
Kydo, vice president of the Stanford Blockchain Club, said:
“Blockspace is a core commodity on any blockchain. People found a new use case and usage skyrocketed. BTC is now more than just money.”
Miners have benefited from the recent increase in transaction fees, as they are rewarded with BTC fees for processing transactions.
Harper predicted that the increase in transaction fees in the Bitcoin ecosystem is “a temporary phenomenon, and transaction fees will soon return to a manageable normal level.”
Ethereum gas fees soar as…
Average transaction fees on ethereum have hit their highest level since May 2022 after positive signals on the network. Specifically, transaction fees on the Ethereum network increased to around 87 gwei on May 2, according to Dune Analytics.
Hildobby, a researcher at venture capital firm Dragonfly, explained in a May 4 tweet that the reason for Ethereum’s high gas fees is due to the memecoin craze.
Source: Dune Analysis
The hype surrounding memecoins has picked up steam lately, most notably PEPE. It was inspired by a famous meme image, Pepe the Green Frog. In just three days, the price of PEPE surged 21,000% and quickly broke into the top 100 cryptocurrencies by market capitalization on May 1 with a market cap of $451.5 million.
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According to CoinDesk