Bitcoin Mempool Returns to Normal After Ordinals Rush

The Bitcoin Ordinal craze that took over the network last week seems to have lost momentum. As a result, the Mempool returns to normal levels.

Ordinals flooded the Bitcoin network last week as the latest crypto mania took off. Valentine’s Day saw peak activity with the hundred thousandth order inscribed.

Ordinal inscriptions are digital assets similar to non-fungible tokens (NFT). They can be entered in a Satoshi, the smallest denomination of a Bitcoin.

Writing writes the data to the content stored in the witness of the Bitcoin transaction. The witness was introduced in the SegWit upgrade in 2017.

In theory, Bitcoin blocks should be a maximum of 1MB per block. However, SegWit and Taproot have enabled Ordinal users to add 3MB of data to each block.

Bitcoin Mempool Levels Stabilize

Furthermore, on February 16, industry researchers observed the on-chain effect of Ordinal mania.

“Inscription fee rates, average block size and taproot utilization are exploding, while the mempool (transaction queue) is starting to fill for the first time in months.”

By Monday, February 20, things seemed to have cooled down as Mempool levels stabilized again.

The mempool is essentially Bitcoin’s “waiting area” for transactions that each full node maintains for itself. Once a node has confirmed a transaction, it waits inside the Mempool until it is picked up by a miner and inserted into a block.

When the Mempool starts filling up like last week, nodes start prioritizing transactions by setting a minimum transaction fee threshold. Only transactions with a large enough fee are allowed access to the Mempool, so this mechanism effectively cuts out transaction spam.

Furthermore, the reduction in Mempool levels suggests that Ordinal inscriptions may have been only a phase. They were made possible by the Taproot upgrade launched on the Bitcoin network in November 2021.

Ordinary inscriptions undulating

However, Delphi Digital reported on February 19 that more than 140,000 Ordinals have been entered in the past month. It went on to explain:

“Users enter data into these specific stakes, which arguably fundamentally changes Bitcoin’s fungibility. Ordinals can have wild consequences for set providence and the entire chain.”

It added that fees are rising and blocks are getting bigger, “which increases Bitcoin’s security budget and profitability for miners.”

The researchers noted that regular inscriptions began on December 17, 2022, but users wrote just over a dozen until January 21, 2023. “Since then, we’ve seen the market go parabolic,” it said.