Bitcoin's network has experienced a significant surge in transaction fees, overtaking Ethereum's total fees last week, as users competed for block space during a period of high network traffic. This congestion was driven by a combination of factors, including a Bitcoin price rally that saw the cryptocurrency peak at over $38,500 before settling around $37,000, and a resurgence in Bitcoin Inscriptions, which increased demand for network capacity.
The rise in transaction fees was notable, with Bitcoin miners benefiting from the increased costs. According to data from IntoTheBlock, Bitcoin collected between approximately $52.6 million and $61 million in transaction fees during the week leading to today, compared to Ethereum's roughly $61.5 million as reported by Glassnode.
The popularity of ordinals, which allow for non-BTC tokens to be inscribed on Bitcoin’s blockchain, has played a significant role in the increased fees. This trend has led to a substantial spike in block space usage, with the average Bitcoin transaction fee reaching $12.96 against Ethereum’s average of $7.52 in the week preceding last Monday. However, when ordinal activity decreased two weeks prior to last Monday, Bitcoin fees dropped to an average of $2.56, while Ethereum's fees remained higher at $4.94 on average.
The impact of high inscription costs is also reflected in the earnings of mining pools such as FoundryUSA, which reported that over 12% of their total rewards from transaction fees this month can be attributed to these increased costs. This highlights the significant financial implications that network activity and congestion can have on the cryptocurrency mining industry.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.