CJ - Bitcoin Specialist
The transaction fees on the Bitcoin network have experienced a sharp rise over the past two weeks. According to CryptoQuant, the fees went from $0.77 on January 29 to a high of $1.95 on February 10. The median transaction fee for the blockchain has also gone up to $0.73 from $0.25 on January 30. The surge in fees can be attributed to the growing popularity of Ordinals NFTs, which have caused an increase in network activity similar to levels seen in May 2021 when China banned cryptocurrencies.
BitMEX Research conducted a recent study which revealed that more than 10,000 NFTs were created between December 14 and February 7. During this time frame, Ordinals NFTs consumed 526 megabytes of block space and creators spent 6.77 BTC on Ordinals-related transactions. The increasing interest in Non Fungible Tokens has led to a rise in their value, with some Ordinals NFTs being sold for as high as 11 BTC due to the high demand.
Despite the growth of NFTs on the Bitcoin network, not everyone is thrilled with the trend. Rene Pickhardt, a lightning network developer, has criticized the trend, calling it a waste of valuable block space, as Ordinals NFTs have consumed over 70% of Bitcoin's total block space despite only accounting for about 3% of all transactions, according to BitMEX research.
Despite some criticism, the rise of Ordinals NFTs and its impact on the Bitcoin network can be seen as a positive development. The increase in network fees and block space usage demonstrates that Bitcoin is being utilized in new and innovative ways, and that there is growing demand for NFTs on the blockchain. This shows that Bitcoin has a greater range of use cases than previously anticipated, and that it has the potential to be a key player in the growing NFT market.
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