The digital world is abuzz as the world’s largest cryptocurrency exchange suddenly paused Bitcoin withdrawals amid congestion in the Bitcoin blockchain. The Bitcoin network has been clogged with a record amount of unconfirmed transactions, resulting in staggering transaction fees and pushing miners of the cryptocurrency to snag extra revenue. Binance temporarily halted BTC withdrawals Sunday morning, U.S. time, just as the average transaction fee reached a two year high.
BRC-20 Token Inscriptions: Bitcoin’s New Anomaly
The proposal that the anomaly comes from the adoption of the BRC-20 standard, a new way to inscribe, has been widely accepted across the Crypto world. According to pseudonymous analyst Dynamo DeFi, BRC-20 tokens have accounted for about 6% of all Bitcoin activity since its inception in early March, and the market cap of these tokens – which are similar to Ethereum’s ERC-20 tokens – has also seen a huge surge to almost $446 million.
The recent frenzy in Bitcoin activity implemented through BRC-20 token inscriptions has skyrocketed the demand for blockspace, driving up the transaction fees. Consequently, this has been the driver for the huge spike in transaction fees with the seven-day average fee standing at roughly $2 million, second only to Ethereum’s $12.5 million.
Bitcoin’s New Use Case: Temporary or Long-Term?
Jimmy Zhang, who works in the business operations and strategy department at blockchain data firm Artemis and Colin Harper, head of content at Luxor Technologies, have both weighed in on the situation. Zhang commented on the “new use case” of Bitcoin, while Harper predicted it would be “a temporary phenomenon,” stating that transaction fees will revert back soon. On the other hand, Kydo, vice president of Stanford Blockchain Club, argued that the phenomenon would not be short-lived, given the current surge in popularity of NFTs.
Mindful of Fees: Bitcoin BRC-20 Frenzy Reminder
Although the pause on Bitcoin withdrawals caused much speculation, the issue was quickly resolved, and BTC is currently trading at $28,935 down 0.15% from yesterday. Bitcoin’s network congestion and stratospheric fees, however, remain as a stark reminder to the wider crypto community of the power and potential of Bitcoin.
Furthermore, the frenzied activity and activity surrounding BRC-20 tokens, Ordinals inscriptions and NFT-like “inscriptions” highlight the revolutionary power of cryptocurrency for the tech and creative worlds. Although the cause of the buzz and transactions is unknown, the message to take away is clear – remember to be mindful of transaction fees when transacting on the Bitcoin blockchain or risk being swallowed up in the enthusiasm of a Bitcoin BRC-20 Frenzy.
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