You may have noticed that from January 21, 2023 it will be possible to create non-fungible tokens (NFTs) on the Bitcoin blockchain. It didn’t stop there, because with the arrival of the BRC-20 token standard it is also possible to launch normal tokens and memecoins on the largest blockchain in the world. The BRC-20 token standard in particular creates a huge demand for block space on the Bitcoin blockchain and that is grist to the mill for the miners.
As a result, the Bitcoin blockchain is slowly filling up and the transaction costs on Bitcoin are rising sharply.
A piece of history
Thanks to the new token standard on Bitcoin, we have witnessed a piece of history. It was only the fifth time in Bitcoin’s more than fourteen-year history that the average transaction costs in a block exceeded the block subsidy that miners receive.
Miners currently receive a grant of 6.25 Bitcoin for producing a block. The last time transaction fees exceeded the block subsidy was during the peak of the market in 2017. At the time, the block subsidy was still at 12.5 Bitcoin.
At the peak of the BRC-20 hype, an average block collected about 6.66 Bitcoin in transaction fees, bringing the total to 12.91 Bitcoin perk block (~$350,000).
Unsurprisingly, text-based Bitcoin Inscriptions were once again the most popular form. These are necessary to create BRC-20 tokens. Text-based inscriptions accounted for about 30 to 60 percent of all transaction fees paid.
The double sandwich
To date, miners have collected more than 1,262 Bitcoin thanks to Ordinals. That’s that double sandwich we were referring to in the title. It is nice that we now have memecoins on Bitcoin, but it is mainly the miners who are cheering on the sidelines. They earn tons of money thanks to the launch of all those tokens.
Last week, the popularity of Ordinals really seemed to explode, as 1,090 out of 1,262 Bitcoin were earned by the miners during that period. The number of BRC-20 token inscriptions has exploded in recent days.
Due to this massive increase in demand for block space on Bitcoin’s blockchain, the total amount of US dollars paid for transactions in a single day has reached a new all-time high of $17.8 million.
The average transaction costs therefore amounted to about $ 30.80 per item. Those are amounts we haven’t seen for Bitcoin in a long time. But we cannot call it a negative development. After all, this means that more and more people want to use Bitcoin.