A week before the halving, the bitcoin network is facing another wave of huge demand, some of which is coming from a now familiar source: ordinal traders.
As of Thursday, data from mempool.space shows that bitcoin users are paying over 90 sats/vByte of block space, putting the average cost of a transaction at $8.50 each.
The ordinals return
The increase in rates has corresponded to a increase in daily ordinal registrations, which counted more than 162,000 on Thursday compared to a monthly average of 90,280. Meanwhile, “daily registration fee expenditure” reached $1.24 million, its highest level in the past month.
However, the vast majority of network fees were limited to regular transactions. Some suspect that on-chain trading activity is increasing ahead of the bitcoin halving, which will reduce the bitcoin supply inflation rate by half in about a week.
“I have been monitoring bitcoin rates for the past few weeks and they are starting to rise again significantly.” twitter.com/jvs_btc/status/1778354228039192901″ data-wpel-link=”external” target=”_blank”>wrote CryptoSlate senior analyst James Van Stratten on twitter on Thursday. “bitcoin has not changed ethereum fees in 2024; I think they will soon. Halving may be the catalyst.”
It's not just about the halving either: April 19 will see the activation of the “Runes” protocol, a new token standard in bitcoin invented by Ordinals creator Casey Rodamor. Like the BRC-20 tokens before them, twitter.com/bensig/status/1778278588892242125″ data-wpel-link=”external” target=”_blank”>some hope that their trading activity at launch could raise fees to more than $30 each.
“bitcoin halving rune drop will kick off memecoin season in bitcoin,” TrustMachines CEO Muneeb Ali tweeted on Monday. “As L1 Breaks Out of Insane Fees and Activity, All Roads Lead to bitcoin L2.”
The Incoming Wave of bitcoin Fees
The tokens have been foreign to bitcoin for most of the network's lifespan, although there is reason to believe that they will immediately gain traction when introduced.
For example, Ordinals introduced nfts to bitcoin less than 18 months ago and has already made the network the most popular blockchain for nft trading, surpassing ethereum. On Thursday, bitcoin's 24-hour nft trading volume hit $28 million, versus $9 million for ethereum, according to CryptoSlam.
The positive side is that Ordinals' high fees increase the income of miners, the entities responsible for securing the bitcoin network. The halving will naturally halve most of miners' rewards, requiring higher network fees to make up the difference in their bottom line.
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