Bitcoin Fees Skyrocket Amid Ordinals Surge: What\'s Happening?

Bitcoin (BTC) fees are in the spotlight again, soaring to levels not seen in months. The recent surge in transaction fees is directly linked to the renewed popularity of Ordinals, a protocol for inscribing data onto the Bitcoin blockchain.

On November 20, the average daily Bitcoin transaction fees reached a six-month high due to a surge in new inscriptions. This intensifying competition for block space is driving up transaction costs for everyone using the network. According to data from BitinfoCharts, Bitcoin fees have approached a $6 average transaction charge for the first time since June.

Ordinals and the Fee Spike: A Closer Look

Ordinals, a protocol enabling users to store NFTs on Bitcoin, experienced a surge in demand during a brief meme token craze this spring, leading to fees reaching nearly their current levels. Now, they\'re back, and impacting transaction costs significantly. The surge in fees is attributed to the recent influx of Bitcoin Ordinals inscriptions, causing a spike in transaction costs for all network users.

A recent uptick in NFT trading is further fueling the increase. According to BitInfoCharts, average Bitcoin transaction fees hit $6.84 on Wednesday, nearly a 1000% increase from August lows around $0.64! This dramatic rise illustrates the tangible effect Ordinals are having on the Bitcoin network.

NFTs, BRC-20 Tokens, and Congestion

In recent weeks, the Bitcoin network has experienced a significant uptick in transaction fees, attributed to the growing popularity of NFT-like Ordinal assets and BRC-20 tokens. These new assets, while innovative, consume block space, leading to congestion and higher fees.