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- The Bitcoin network sees its longest period of block fullness in history, with over 461,000 transactions waiting in the mempool.
- “Inscriptions” – text-based data entries – are identified as a significant contributor to the blockspace demand, accounting for 50-60% of all confirmed transactions since mid-April.
Decoding the Bitcoin Block Fullness Conundrum
The Bitcoin network, the backbone of the cryptocurrency universe, is currently navigating through uncharted waters. According to Dune’s recent data, the network is witnessing an unparalleled level of block fullness. Glassnode’s esteemed researcher, James Check, or as the community fondly knows him, “Checkmate”, delves into this anomaly, seeking answers and understanding.
At the heart of the anomaly lies a term the crypto community is becoming increasingly familiar with: “Inscriptions”. These text-based data entries onto the Bitcoin network have been steadily increasing, accounting for a notable 50% to 60% of all transactions since mid-April. What’s confounding, though, is despite their numerical dominance, these inscriptions occupy a mere 10% of the block size. Their footprint in terms of transaction fees? Roughly 20%.
The Intricacies of Inscriptions and Blockspace Economics
Checkmate’s analysis introduces us to a term vital to understanding this puzzle: BASELOAD fee pressure. This economic dynamic reveals a preference among users to consume blockspace that’s cost-effective. In simpler terms, despite the hike in transaction fees since May, users are inclined towards leveraging blockspace that offers value for money.
Further dissecting the data, while inscriptions dominate in terms of numbers, monetary transfers, the essence of Bitcoin, still occupy over 80% of the block. This is intriguing, especially when considering that the volume of such transfers has seen a noticeable decline.
The Evolution of Transaction Sizes and the Bigger Picture
The landscape of Bitcoin transactions has witnessed notable shifts over the years. Historically, the average transaction size oscillated between 550 to 600 bytes. However, the advent of image inscriptions in March 2023 saw this metric leap to over 1.4kb. Recent text inscriptions have further nudged this average, bringing it down to a historic low of 435 bytes.
Beyond the numbers, Checkmate also philosophizes on the more profound implications of inscriptions. These aren’t just mere data points; they’re markers, capturing the spirit of the times. With Bitcoin’s immutable nature, these inscriptions transform the network into a “golden record” of human history, etching events and sentiments for posterity.
To sum it up, the emergence of inscriptions and the subsequent debates and innovations they spark, ensure that the Bitcoin network and its ecosystem remain at the epicenter of blockchain evolution. As of this report, Bitcoin’s trading value stands firm at $26,991.
