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The Bitcoin network is currently under heavy load and in a congested state due to the popularity of BRC-20 tokens. This has impacted transaction times and costs for sending BTC for users and traders.
The popularity of BRC-20 tokens is taking its toll on the Bitcoin network, which has become overloaded, creating a backlog of unconfirmed transactions.
Bitcoin Network Under Pressure
According to mempool.space, there are more than 280,000 unconfirmed transactions on the BTC network. Furthermore, memory pool usage has exceeded 300 MB and reached 1.57GB.
In essence, the mempool is Bitcoin’s “waiting area” for transactions that each full node maintains for itself. Once a node has verified a transaction, it waits inside the mempool until it is picked up by a miner and inserted into a block.
Once the mempool fills up, nodes begin to prioritize transactions by setting a minimal transaction fee threshold. Only transactions with a large enough fee can access the mempool which also reduces transaction spam. Nevertheless, it also increases transaction costs for genuine transactions.
Transaction fees have now increased to between $14 and $16.50, depending on the priority.
Read more: Bitcoin NFTs: Everything You Need To Know About Ordinals
According to Dune Analytics, there has been a spike in BRC-20 minting over the past couple of days. Moreover, token minting surged to over 450,000 per day earlier this week.
BRC-20 is an experimental token standard that uses ordinal inscriptions to enable the minting and transfer of fungible tokens on the Bitcoin blockchain.
Earlier this year, the ordinal minting hype clogged up the network, driving transaction fees higher. Many thought it was just a short-term craze, but it appears to be happening again.
Ordinal Inscriptions are digital assets similar to NFTs, which can be inscribed into one Satoshi, the smallest denomination of a Bitcoin. The data is written into the transaction ‘witness,’ which was introduced in the SegWit upgrade in 2017.
Related Ordinals Tokens Surging
The Ordinals (ORDI) BRC-20 token has reached a market value exceeding $1 billion, becoming the first of its kind to do so. ORDI is a meme coin using the Ordinals protocol to make inscriptions.
Its price skyrocketed 28% on the day to reach an all-time high of $65.18 a few hours ago.
Stacks, a protocol for building on Bitcoin, has also seen token prices surge recently. STX is up 50% over the past week, trading at $1.15 at the time of writing.
Bitcoin itself has hit another 2023 high of $44,367 during the Wednesday morning Asian trading session.