Bitcoin activity has hit an unprecedented level, with daily transactions reaching a new record of 682K. This is a significant increase from 250K daily transactions at the start of 2023. The primary reason behind this surge is the growing popularity of ordinal inscriptions, which are predominantly used for creating a type of digital asset known as BRC-20 tokens. These tokens are generated using Taproot addresses, which have seen a substantial rise since mid-April. This high usage of Taproot addresses for creating tokens further demonstrates the increasing interest in Bitcoin and its associated technologies. Alongside this, there's a consistent increase in the number of Unspent Transaction Outputs (UTxOs). UTxOs represent the output of Bitcoin transactions that can be spent as new transactions, and an increase in their number signifies heightened activity on the Bitcoin network. However, this surge in Bitcoin activity and the popularity of BRC-20 tokens have led to a downside: the Bitcoin network has become congested. As a result, users have been forced to pay significantly high transaction fees. The average fee per transaction has skyrocketed to $30.82, the steepest it has been since February 2021. Moreover, these high transaction fees have started to make up a large portion of miners' earnings. Currently, daily fees constitute 42.6% of the rewards miners receive for adding new blocks to the blockchain. This is the highest percentage seen since December 2017, indicating that the current state of the Bitcoin network is impacting all its stakeholders, from everyday users to miners.
Written by CryptoQuant.com
