Bitcoin Faces ‘Siege’ From BRC-20 Fees: Expert Warns Of Impending Crisis

Key Points:

• Increased fees and backlog of transactions are besieging Bitcoin due to the surge in block space demand from BRC-20 memecoin minting.
• The average fee per transaction has skyrocketed, exceeding $16 and peaking at $29 on May 9.
• Bitinfochart data recorded a new all-time high in the number of Bitcoin transactions, hitting a top of 534,000.

The Bitcoin network is currently facing many difficulties, including increased fees and a backlog of transactions.

This is primarily due to the increasing popularity of the new “token” standard known as BRC-20, according to Axel Adler Jr., an analyst with the crypto data firm, CryptoQuant.

Adler explains that BRC-20 memecoin minting on the BTC blockchain is one of the primary factors causing the surge in block space demand. He notes that this standard is different from conventional token standards, such as Ethereum’s ERC-20, as it does not utilize smart contracts and operates only with wallets supporting the Bitcoin blockchain.

As a result of the rise in block space demand, the average fee per transaction has skyrocketed, exceeding $16 and peaking at $29 on May 9, according to CryptoQuant. Similarly, data from Bitinfocharts has reported a spike in average transaction fees, recording a jump to $31 on May 8 compared to around $19 the day prior. Additionally, on May 8, the total fees per block temporarily exceeded the block subsidy reward of 6.25 BTC for the first time since 2017.

Despite these difficulties, the number of Bitcoin transactions has been steadily increasing. On May 9, Bitinfochart data recorded a new all-time high on the seven-day moving average for the number of Bitcoin transactions, hitting a top of 534,000. However, the figure could actually be higher than that, as Bitinfocharts noted two higher spikes over 600,000 daily transactions this month using raw values. On May 9, it recorded 598,000 BTC blockchain transactions.

While the Bitcoin network is facing some significant challenges, it continues to grow in popularity and usage, with more and more transactions taking place on its blockchain.

Blockchain.com has confirmed the data reporting that the average transactions per block are also at an all-time high of 3,778.

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