Bitcoin’s core network of developers are considering killing off BRC-20 tokens that have led to record levels of fees and congestion on the Bitcoin blockchain.
On May 9, the seven-day moving average for transactions on the Bitcoin network hit an all-time high of 539,000 according to data from Bitinfocharts. Industry watchers attribute this heightened level of network activity to the emergence of the BRC-20 token standard and its use for the minting and trading of memecoins on the Ordinals Protocol.
BRC-20 tokens surpassed $1 billion in market cap on Tuesday and saw more than $200 million in trading volume over the last 24-hours. However, the uptick in activity around these tokens has likely contributed to the 394,000 transactions currently pending confirmation on the mempool.
Transaction fees on Bitcoin have now surpassed the block reward earned by miners, with the average transaction fee sitting at $20.34 – a 788% increase over one year. The phenomenon has led some on-chain analysts to comment that Bitcoin is “under siege from BRC-20 ‘junk’ coins.”
The situation has not gone unnoticed by Bitcoin core developers, who are considering taking action against BRC-20 transactions, even if that comes at the cost of enforcing censorship at the node level.
In a Bitcoin developer forum, Bitcoin core developer Ali Sherief proposed ways to address the issue at hand. One way to do this would be making changes to the Bitcoin codebase that would curtail the loophole that allowed these transactions to be created. Another way would be introducing a runtime-option that would delete all non-standard Taproot transactions – a category that BRC-20 falls under.
“I know that some people will have their criticisms about this… which is fine, but we need to find a solution for this that fits everyone’s common ground. We indirectly allowed this to happen, which previously wasn’t possible before. So we also have a responsibility to do something to ensure that this kind of congestion can never happen again using Taproot,” said Sherief.
Among the developers that supported the proposal, was core developer Luke Dashjr, who said that “action should have been taken months ago” and proposed using a script code like OP_RETURN to mark these transaction outputs as invalid.
“Since this is a bugfix, it doesn’t really even need to wait for a major release,” he said.
In February, Dashjr released a patch called “Ordisrespector” which filters out what he believes to be spam transactions from the Ordinals protocol and prevents them from entering the node mempool.