Bitcoin transactions and fees have reached record levels, with over 400,000 unconfirmed transactions on the blockchain. The backlog is due to a surge in demand for block space caused by a new “token” standard known as BRC-20 memecoin, according to CryptoQuant analyst Axel Adler Jr. Unlike Ethereum’s ERC-20, BRC-20 does not use smart contracts and operates solely with wallets supporting the Bitcoin blockchain. This has caused the average fee per transaction to skyrocket, peaking at $29 on May 9th, with Bitinfocharts recording a jump to $31 on May 8th.
On May 8th, the total fees per block exceeded the block subsidy reward of 6.25 BTC for the first time since 2017. Bitinfochart data recorded a new all-time high on the seven-day moving average for the number of Bitcoin transactions, reaching a top of 534,000 on May 9th. However, the figure could actually be higher than that with Bitinfocharts recording two higher spikes over 600,000 daily transactions this month using raw values. Blockchain.com confirmed the data, reporting that the average transactions per block are also at an all-time high of 3,778.
Despite the surge in transactions, there are currently 400,000 unconfirmed transactions pending on the network, keeping transaction prices elevated. The total market capitalization of BRC-20 tokens surpassed $1 billion on May 9th, as reported by Cointelegraph. Bitcoin core developers are considering taking action against BRC-20 tokens and ordinals, which they consider network spam. The number of ordinal inscriptions has almost doubled from 2.5 million to 4.78 million in just over a week.
The surge in demand for block space is causing a civil war between miners, who want to double down on ordinals and BRC-20s to increase fees and the value of private mempools, and BRC-20 holders, who want the right to exist and pursue growth. The problem has gotten so bad that Bitcoin core developers are considering taking action against BRC-20 tokens and ordinals, which they consider network spam.
Despite the backlog of transactions, the surge in transactions is good news for miners, as profitability, or hash price, has surged 66% since the beginning of the month.