According to Cointelegraph, despite concerns that Bitcoin Ordinals are clogging the network, on-chain analytics firm Glassnode reported on September 25 that there is minimal evidence to suggest inscriptions are taking blockspace away from higher-value Bitcoin (BTC) monetary transfers. The firm explained that this is likely because inscription users tend to set low fee rates, expressing willingness to wait longer periods of time for confirmation. Inscriptions appear to be buying and consuming the cheapest available blockspace and are readily displaced by more urgent monetary transfers.
Bitcoin Ordinals were introduced in February 2023 and have since accounted for the lionâs share of network activity when it comes to daily transaction count. However, this hasnât necessarily been reflected in its share of mining fees, with inscriptions only attributing to about 20% of Bitcoin transaction fees, Glassnode noted. While inscriptions have strengthened the base-load demand for blockspace and increased fees for miners, Glassnode says Bitcoinâs hashrate has also increased 50% since February. This has resulted in tougher competition for miners looking to swoop in on revenue fees.
Bitcoin is currently priced at $26,216, but many industry pundits expect some degree of price appreciation in the lead-up to Bitcoinâs halving event scheduled for April 2024. Currently, most inscriptions come as a result of BRC-20 tokens, which were introduced one month after Casey Rodamor launched the Ordinals protocol on Bitcoin in February. On September 25, Rodarmor pitched âRunesâ as a potential alternative to BRC-20s, suggesting that a UTXO-based fungible token protocol wouldnât leave as much âjunkâ unspent transaction outputs on the Bitcoin network.
