• The surge of meme coins flocking to Bitcoin’s BRC-20 standard has caused a spike in BTC network fees.
• The daily minting fee on BRC-20 tokens hit a record high of 247 BTC on May 7 and the cumulative fees paid on the Bitcoin Network have crossed $3.5 million.
• Congestion in the Bitcoin Network is due to the increasing shift to BRC-20, particularly Pepe Coin (PEPE) and Wojak (WOJAK).
The recent influx of meme coins into Bitcoin’s BRC-20 standard has changed Bitcoin’s network fees as more coins emerge. This congestion has caused an increase in transaction fees, with records being set for daily minting fees and cumulative fees paid within the network.
Effects of Meme Coins
The hype and frenzy around meme coins such as Pepe Coin (PEPE) and Wojak (WOJAK) have been greatly exaggerated due to their impressive performance, causing many other projects to flock to the BRC-20 standard used by Bitcoin. This influx of projects has congested the network, resulting in increased transaction fees reaching multi-year highs.
According to data analytics platform Dune Analytics, daily minting fees on BRC-20 hit a record high of 247 BTC on May 7th – its highest level in two years. In addition, according to YCharts data, Bitcoin’s average transaction fee for May 7th was $19.21. There are now over 14,000 BRC-20 tokens with a total market cap of over $952 million and 24 hour trading volume exceeding $10 million.
Shift To BRC-20 Model
Before now, most ERC-20 tokens were based on Ethereum’s network which experienced issues such as slow transactions speeds due to congestion in its network scalability. However, since then there has been an increasing shift towards using the BRC-20 model used by Bitcoin which offers improved speed and scalability solutions that have attracted many meme coins and other crypto assets away from Ethereum onto its blockchain instead.
It is clear that with all these new projects moving towards using Bitcoin’s blockchain it will continue to cause congestion within its networks which will result in higher transaction costs being incurred by users who wish to use it or any project built upon it until suitable solutions are found or implemented by developers behind these projects or those working on improving the underlying technology itself such as Lightning Network etc..