Record-breaking surge in ordinals causes Bitcoin fees to skyrocket
The average commission on the Bitcoin (BTC) network has reached a yearly high, surpassing $37. This increase in blockchain fees can be attributed to a surge in activity within the Ordinals segment, resulting in a higher demand for block space.
This situation is reminiscent of what happened in April-May 2023, when the average commission reached $19 after the introduction of inscriptions on the Ordinals blockchain. However, the demand for Bitcoin NFTs decreased during that time but picked up again in Q3 2023.
The rise in commissions is directly linked to the growing demand for inscriptions on the Ordinals network. Both the number of these tokens and the volume of commissions are showing a consistent upward trend.
Miners have been the main beneficiaries of this situation, as their income has reached levels comparable to Bitcoin’s historical highs of around $69,000.
Some users have expressed concerns about the high network fees hindering mass adoption of cryptocurrencies. However, popular influencer hodlonaut believes that the Bitcoin network is not designed for mass use and that high commissions serve as a security measure against attacks. He advocates for the use of second-layer solutions like Liquid Network or Lightning Network, which are specifically designed for accessible transactions.
Hodlonaut is confident that the structure of the Bitcoin network allows for a constant increase in value due to the design of the Proof-of-Work consensus algorithm. In his view, it is impossible to maintain low commissions in this situation, as demonstrated by failed forks like Bitcoin Cash.
It’s worth noting that commissions have also increased in other blockchains that issue analogs of Ordinals. On December 16, gas consumption for operations involving “inscriptions” in EVM networks amounted to $8.37 million. Avalanche accounted for $5.6 million of that total, while Aribitrum One contributed $2.1 million.
In summary, the average commission on the Bitcoin network has reached a yearly high due to increased demand for block space. This trend is similar to what happened in 2023, and it has led to higher commissions in other blockchains as well. While some users have concerns about mass adoption, hodlonaut believes that high commissions are necessary for the network’s security and advocates for the use of second-layer solutions.
