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Crypto News - Archive

Bitcoin Transaction Fees Rise Amid Backlog and Ordinal Inscription Trend

Author

Jay Solano

Tags

Tags Editor's Choice / Slider Posts

Reading time

2 mins
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Author

Jay Solano

Tags

Editor's Choice / Slider Posts

Category

Crypto News - Archive

Reading time

2 mins
Last update

Author

Jay Solano

Tags

Editor's Choice, Slider Posts

Reading time

2 mins
Last update


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The Bitcoin network is experiencing a significant spike in transaction fees, coinciding with a growing backlog of unconfirmed transactions. As reported by bitinfocharts.com, the average cost of a Bitcoin transaction reached $27.55 on December 6, 2023. The average fee is approximately $13.93, with about 249,000 transactions waiting for confirmation.

This surge in the Bitcoin mempool, which records all pending transactions, aligns with an increase in Ordinal inscriptions. These inscriptions, which occupy block space alongside financial transactions, have become more prevalent. Currently, the network requires clearance of 287 blocks or 493 megabytes of block space to alleviate the backlog.

Ordinal inscriptions, consuming over 50% of daily transactions, have reached 47.77 million on the Bitcoin blockchain. After a brief dip in transaction fees to $5 – $7 per transfer from around November 26 to December 2, fees escalated dramatically the following week, peaking at an average of $27.55 per transaction on December 6, with a median fee of $17.70.

The current average transaction fee is 0.00033 BTC or $13.93, and the median fee is 0.00025 BTC or $10.75. Glassnode’s lead onchain analyst, Checkmate, commented on the full mempool and the resulting dissatisfaction among some Bitcoin users on December 13. Checkmate noted that inscriptions, primarily small text files, account for about 50% of daily transactions but less than 10% of block data size.

Despite their small data size, these inscriptions significantly impact transaction fees, contributing 20% – 40% of the total fees. They benefit from the Segregated Witness (Segwit) discount, making them more efficient regarding space within Bitcoin blocks. Checkmate emphasized that inscriptions enhance value and fee efficiency within the current block size limit, positively contributing to the Bitcoin network.

The analyst concluded that the opposition to the trend of Ordinal inscriptions is more ideological and subjective, contrasting with the objective nature of Bitcoin’s consensus rules, which are not influenced by personal feelings or values.