The Ebb and Flow of Bitcoin Inscription Activity

Overview of Bitcoin Inscription Use

Recent on-chain analysis indicates that the enthusiasm around Bitcoin Inscriptions is fading, as seen from the substantial decrease in miner revenue from transaction fees. Bitcoin Inscriptions, a newly emerged application at the end of 2022, allow for the embedding of metadata onto Bitcoin's smallest unit, satoshis (sats), alongside BTC transactions, respecting the 4MB block size limit. This technology paved the way for innovations like NFTs and BRC-20 tokens on the Bitcoin network.

Impact on Transaction Fees

The introduction of Inscriptions prompted notable spikes in transaction fees during peak periods, directly influencing miners' earnings. Transaction fees, which vary based on network congestion, soared during these peak times as Inscriptions congested the network. Users competed with higher fees to expedite their transactions, leading to a substantial increase in miner revenue. However, analyst James Van Straten has noted a decline in the recent Inscription boom, with these transactions now accounting for only a small percentage of the total miner revenue.

Current Bitcoin Market Trend

Although the Inscription craze's popularity has dwindled, resulting in only a 6% contribution to miner revenues from fees – still more than double the percentage prior to the phenomenon – Bitcoin's market price shows a positive trend. At the moment, Bitcoin's value stands at approximately $42,100, reflecting a 6% increase over the last week.