Bitcoin transaction fees rise to 24-month high amid BRC-20 memecoin craze
The average Bitcoin transaction fee has risen to $30.91 – a level not seen since April 2021, according to data from ycharts.com.
The period in the run-up to April 2021 was characterized by a mania that saw Bitcoin run to $64,900 – likely fueled by Coinbase’s NASDAQ listing and the narrative that crypto is going mainstream.
This run was abruptly ended when China expanded its anti-crypto policy to ban Proof-of-Work mining, followed by Elon Musk announcing that Tesla would stop accepting BTC for vehicle purchases due to concerns about miners using fossil fuels .
Today, the meme coin craze is driving activity on the Bitcoin network via the recently released BRC-20 standard.
What is BRC-20?
In March, the BRC-20 standard was created by an anonymous person known as “Domo”.
While Bitcoin was traditionally a single-asset blockchain, the Ordinals protocol, via the Taproot soft fork, has enabled exchangeable BRC-20 assets to operate on the chain.
Taproot was launched in November 2021 to make transactions faster and cost-effective while laying the foundation for smart contracts and dApps.
In February, Taproot’s capabilities were used to store jpegs and videos directly on the blockchain, thus creating a non-fungible market on Bitcoin – much to the chagrin of the purists.
At the time, commentators warned that this would eventually lead to higher transaction fees and chain bloat – with BRC-20 added to the mix, that situation plays out.
According to the website brc-20.io, BRC-20 tokens have a total market capitalization of $693.2 million. The top three tokens are Ordi, Nals and Pepe – valued at $411.3 million, $42.3 million and $34.7 million respectively.
Scrolling through the list shows tokens called d*ck, P*SY, sexy and f*ck, indicating the general triviality of the BRC-20 space at this point.
Bitcoin casino
Despite this, a comment from RamenPanda reflects, Phobar is adamant that BRC-20 tokens will be a significant factor in increasing Bitcoin dominance, making Ethereum irrelevant.
“The next bull market will be driven by Bitcoin and BRC20 tokens
Bitcoin dominance will skyrocket to over 70%
Ethereum will become irrelevant.”
Similarly, Dough Spartan expressed a “can’t beat ’em, join ’em” attitude to BRC-20 — saying that if you’re going to memecoin, you might as well do it on Bitcoin.
“TThe final conclusion of the janky brc20 experiment will be that it is better to shitcoin on a chain built to house and facilitate a full shitcoin casino.“
Willy Woo said that there are pros and cons to the current situation. He explained that block rewards will be zero one day, meaning an alternative source of mining revenue is needed to keep miners incentivized.
At the same time, the trade-off is “bad for nodes and decentralization” — adding that the impact of Ordinals is happening at a time when mining rewards are still high.
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