Bitrabo Editorial
The Bitcoin transaction fee share of the Inscriptions has dropped to just 26% recently, indicating a possible waning of hype around them.
Fee Share Compared to Peak
During their peak, the fee dominance of the Inscriptions was at 62%, according to data from on-chain analytics firm Glassnode. An “Inscription” refers to any form of data inscribed into the Bitcoin blockchain directly.
The Inscriptions became possible with the emergence of the Ordinals protocol earlier this year and have since seen numerous applications and gained some rapid popularity.
As with any other transfer on the network, Inscription transactions affect the blockchain economics related to transactions. An easy way to gauge their impact is through the Bitcoin transaction fees.
Generally, transaction fees vary based on the amount of demand on the network. In times of low traffic on the blockchain, investors don’t need to pay significant fees to complete transfers quickly, so fees stay low. When the network is congested, however, holders may have to pay high fees due to competition for transaction capacity.
A chart displays the percentage share of the transaction fees that the Bitcoin Inscriptions have occupied since their inception:
The value of the metric has recently decreased | Source: Glassnode on Twitter
The fee share had increased significantly soon after their emergence, primarily from the image-based Inscriptions playing the role of non-fungible tokens (NFTs) on the network. However, the image-based Inscriptions has registered a decline to low values a few months ago. A new application of the technology emerged, BRC-20 tokens, which are fungible tokens created similar to the text-based Inscriptions.
From the chart, we saw that the fee transaction share of Inscriptions had reached an all-time high after the emergence of BRC-20 tokens, with most of the transfers coming from the text-based Inscriptions.
Recently, however, the interest in Inscriptions has lessened, as the fee share of such transfers has dropped to 26%. This is still relatively high but represents a significant decline from the peak.
BTC Price
Bitcoin is currently trading at around $26,800, down 2% in the last week.
BTC has gone stale in the past few days | Source: BTCUSD on TradingView
Featured image from Dmitry Demidko on Unsplash.com, charts from TradingView.com, Glassnode.com