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- 1 Bitcoin has currently 393,000 unconfirmed transactions.
- 2 The network is dealing with congestion according to Bitocin on-chain analyst Willy Woo.
Bitcoin is being adopted by more and more people and institutions every day. What is concerning is that the Inscription craze is leaving thousands of Bitcoin transactions unconfirmed. The Bitcoin network has long lines of transactions waiting to get confirmed which is driving up fees. The network is undergoing another stuffing phase. This is according to Willy Woo, an on-chain analyst.
The list of pending transactions waiting for validation from a node before it is committed to a block on the blockchain is now at the highest point in the history of BTC since data was recorded.
James Check, an analyst for Glassnode posted on Twitter that due to inscriptions, there has been a rush on the blockspace demand. After Bitcoin Ordinals and NFTs, they have become very popular. They allow users to inscribe things onto the blockchain. This can be images, texts, or audio.
Inscriptions on Bitcoin Blocks Increasing Baseload Pressure
Bitcoin inscriptions are the metadata added on Bitcoin satoshis, the smallest unit of the Bitcoin currency. This creates unique digital artifacts that can be held in Bitcoin wallets and transferred using Bitcoin.
The Glassnode analyst further clarified that inscriptions presently account for 50-60% of the baseload pressure. Inscriptions have been occupying empty blockspace for the past 5 months. He added that these types of transactions are sensitive to high fees but willing to buy cheap blockspace. Inscriptions mean more transactions which translates to higher fees.
Willy Woo said that since he is paying $7.50 to move BTC, he wants high transaction fees. He also added that one day the network allowance will also run out and Bitcoin will be obtained only on the fee market. He also said that the Bitcoin Layer 2 scaling solution, Lightning Network, will have to step up but at these high fees, is compromised for smaller transactions.
He stated that the developers have made a lot of efforts to improve the efficiency of the blockchain since the 2017 congestion when the payment fees were the same as they are now. He said he is cautious as nobody knows how long the congestion will last.
The on-chain analyst also said that this inscription came during the bear market when the fee was $7.50 and he questions what will happen during the bull market. “Lightning may take up some of the load, but also we’ll start to see some payment frauds as a result,” he said.
Mr. Pratik chadhokar is an Indian Forex, Cryptocurrencies and Financial Market Advisor and analyst with a background in IT and Financial market Strategist. He specialises in market strategies and technical analysis and has spent over a year as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the Financial markets.
