Bitcoin on-chain transactions have seen an unprecedented surge recently, with the number of daily transactions crossing half a million. On May 1st, the figure touched a new record high of 682,000.
According to the tweet by Rafael Schultze, Co-founder & CTO of Glassnode, this surge in transaction counts rose by over two times compared to the 2022 baseline, which had remained stable at approximately 250,000 transactions per day throughout the previous year.
BRC20 Token Standard Drives Increase In Bitcoin Activity
The surge in Bitcoin transactions has been largely driven by text inscriptions related to JSON data. Ordinal inscriptions related to the new BRC20 “token standard.” According to Schultze, the rise in the number of Taproot transactions clearly indicates this trend.
On April 30th, 37.5% of spent outputs were P2TR output types, while on May 1st, 60% of all Bitcoin transactions used Taproot – a record high. Interestingly, text inscriptions now constitute the most prominent ordinal inscription type in the Bitcoin network.
As per Glassnode’s data, text inscriptions account for 2.8 million transactions, followed by 650,000 images, 1,800 videos, 347 audios, and 19,000 other types.
Apart from the influence on the Bitcoin fee market, the rise in text inscriptions is also responsible for the recent increase in Bitcoin activity. In fact, they have even surpassed the total number of all other transactions for a brief amount of time.
Schultze suggests that the rise in text inscriptions can be attributed to adoption of the new BRC20 token standard used to deploy contracts and mint/transfer tokens.
With the surge in Bitcoin transactions, miners have made considerable money. On May 1st, miners earned a total of $3.5 million in transaction fees, which is the highest value in two years when the BTC price was at $38,000.
Schultze notes that up to a third of all BTC fees paid to miners in recent days can be attributed to BRC20 transactions. Never the less recent surge in Bitcoin transactions has been driven by text inscriptions related to adopting the new BRC20 token standard.
This trend has been further corroborated by the rise in Taproot transactions and the considerable fees paid to miners. It will be interesting to see how this trend develops in the coming days and weeks.
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