Sustained Bitcoin mempool congestion shows unwavering demand for Ordinals Inscriptions

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Ear­li­er this year, the mar­ket saw an unprece­dent­ed uptake of Ordi­nals and its asso­ci­at­ed Inscrip­tions. Ordi­nals serve as a unique num­ber­ing scheme for satoshis, allow­ing users to track and trans­fer indi­vid­ual sats. Inscrip­tions are a form of NFTs on Bitcoin’s net­work, enabling users to etch their mes­sages on the Bit­coin blockchain. The intro­duc­tion of the Ordi­nals the­o­ry marked a sig­nif­i­cant mile­stone, herald­ing Bitcoin’s for­ay into the NFT space.

When the pop­u­lar­i­ty of Ordi­nals and Inscrip­tions surged, some mar­ket observers spec­u­lat­ed that it was a fad. How­ev­er, recent on-chain data sug­gests oth­er­wise. The demand for Ordi­nals remains robust, and the Inscrip­tions phe­nom­e­non might not be wan­ing for a while.

The Bit­coin mem­pool, a hold­ing area for uncon­firmed trans­ac­tions, is a crit­i­cal met­ric to gauge this demand. An over­flow­ing mem­pool indi­cates a high vol­ume of pend­ing trans­ac­tions, often lead­ing to increased trans­ac­tion fees and con­ges­tion in the Bit­coin net­work. The mem­pool hasn’t cleared since April this year, indi­cat­ing sus­tained activ­i­ty and demand.

mempool 2023
Graph show­ing the num­ber of trans­ac­tions wait­ing in the Bit­coin mem­pool by a rel­a­tive fee in 2023 (Source: Glassnode)

This mem­pool con­ges­tion cor­re­lates with a surge in the count of new Inscriptions.

Accord­ing to data from Glassnode, there was a notable increase in the dai­ly cre­ation of new Inscrip­tions towards the end of April. By mid-May, 400,000 new Inscrip­tions were cre­at­ed in just one day. While a dip in June sug­gest­ed a poten­tial wan­ing inter­est, the num­bers bounced back. Sep­tem­ber end­ed with an all-time high of 450,000 new Inscrip­tions in a sin­gle day.

While the ear­ly days saw the dom­i­nance of image-based Inscrip­tions, text-based ones have now tak­en the lead.

ordinals inscriptions new daily count 2023
Chart show­ing the num­ber of new Inscrip­tions cre­at­ed dai­ly in 2023 (Source: Glassnode)

Bit­coin trans­ac­tion fees spiked in May due to the surge in Inscrip­tions and the con­gest­ed mem­pool. How­ev­er, despite the con­tin­ued demand for Ordi­nals, the fees have since sta­bi­lized. This sta­bi­liza­tion sug­gests that the mar­ket has adjust­ed to the Inscrip­tions phe­nom­e­non, and the Bit­coin net­work has found equilibrium.

bitcoin transaction fees 2023
Graph show­ing the total amount of fees paid on the Bit­coin net­work in 2023 (Source: Glassnode)

The con­sis­tent demand for Inscrip­tions sug­gests they may have found a niche and a ded­i­cat­ed user base. Their impact on the Bit­coin net­work, espe­cial­ly trans­ac­tion fees, and block­space, can­not be ignored. While the ini­tial surge might have caused some dis­rup­tions, the network’s abil­i­ty to adapt and sta­bi­lize show­cas­es its resilience.

The post Sus­tained Bit­coin mem­pool con­ges­tion shows unwa­ver­ing demand for Ordi­nals Inscrip­tions appeared first on Cryp­toSlate.

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