On 17 December, the average fee in the Bitcoin network set a one-year high, reaching $37. Binance contributed by listing ORDI in November. As a result, the token's price rose ten-fold. The average fee has seen a six-fold growth during the same time.
Once again, Ordinals, which facilitate over half of all transactions, were the reason for this rise in costs. Ordinals are artefacts within a network, such as images or other digital objects. The Ordinals protocol was introduced in February by developer Casey Rodamor. Months later, he apologised to the community because of the surge in spam on the network.
Since May, the primary volume of Ordinals has been represented by quasi-tokens or meme coins (similar to ERC-20 coins on the Ethereum network). They don't carry a payload, and all the hype is associated with speculative expectations. Coins now account for 99% of transactions among Ordinals.
Advocates of developing the network conservatively have condemned the new sphere, with Bitcoin Core developer Luke Dashjr threatening miners with a PoW algorithm change if they don't start filtering transactions. Ocean Mining, the pool he founded, has previously admitted that it filters out Ordinals.
However, the likelihood of changing the algorithm is extremely low since not everyone supports such radical decisions. Some participants see the emergence of Ordinals as a natural stage of evolution, which increases the demand for transactions in the network, leads to a rise in income for miners and, due to their greater involvement, improves security.
Thanks to Ordinals and the rising value of the cryptocurrency, the yield from the power terahash hit a new one-year high yesterday at $0.13.
The downside of the high fees is a declining interest in Bitcoin as a means of payment. In May, after similar events took place, the use of Litecoin skyrocketed. The latter is similar to Bitcoin in most technical parameters, but the average transaction fee is less than $0.01.
In November, the number of completed transactions set a new record.
If the Ordinals hype doesn't calm down soon, increased demand for transactions involving Litecoin will cause the coin's value to rise.
StormGain Analytical Group
(platform for trading, exchanging and storing cryptocurrency)
