Recently, due to the surge in interest in Ordinals and BRC20 in the Chinese community, the transaction fees on the Bitcoin network have seen a significant increase. According to data from BitInfoCharts, the average transaction fee on the Bitcoin blockchain is now $6.84 per transaction on Wednesday, a roughly 970% increase from the low of $0.64 reached in August.
Digital asset management company 21Shares pointed out in a report released this week that this surge is being driven by the demand for minting tokens by network participants. According to a Dune dashboard created by community user @dataalways, the demand for transactions related to tokens has surged since November, even setting a record of up to a million US dollars in daily transaction fees.
Analysts at 21Shares stated that while there are still many who do not understand or even oppose the applications of the Ordinals protocol, it is undeniable that with the halving of block rewards, the Bitcoin ecosystem must increase network transaction fees in order to provide sufficient income for Bitcoin miners and incentivize long-term participation in the network to maintain its current level of decentralization and hash power.