The cost of sending funds through the Bitcoin blockchain has surged to levels last seen in April 2021, when the price of BTC was above $59,000.
According to data from BitInfoCharts, the average transaction fee on the Bitcoin blockchain currently sits at over $37, and there are around 280,000 unconfirmed transactions on the mempool.
The mempool is a waiting area of sorts for transactions awaiting confirmation on the blockchain. At the time of writing, fees of $1.16 were assigned no priority, while those transactions sent with $7 in fees were assigned “low priority.”
Unlike the last time transaction fees were at these levels, the price of Bitcoin is currently trading at $41,000. This means that the surge in transaction fees can be almost entirely attributed to an increase in demand for blockspace, likely driven by the popularity of trading BRC-20 tokens, or inscriptions on the Bitcoin Ordinals protocol.
Inscriptions spent $10 million in Bitcoin transaction fees yesterday. pic.twitter.com/UQduwFtyPQ
— Joko ⚡️ (@jokoono) December 17, 2023
Ordinals have often been the subject of debate within the crypto community of late, with some hardcore Bitcoiners taking the stance that these inscriptions bring a negative impact on the fee market and the usability of the blockchain. Others see the BRC-20 token standard and inscriptions as a legitimate use case, seeing as blockchains are public, uncensorable goods.
Meanwhile, miners are reaping the benefits of the inflating Bitcoin transaction fees, with data from Blockchain.com showing that miner revenue on Dec. 17 had surged to $64 million – the highest level since Bitcoin traded at its all-time high of $69,000 in November 2021.
An inscriptions analysis dashboard on Dune Analytics from “@dgtl_assets” found that miners earned $9.9 million in daily fees from Ordinals alone on Saturday, and $7.2 million in Ordinals-based fees on Sunday.