The Bitcoin network is experiencing a surge in block space demand, driven by growing interest in BRC-20 tokens inscribed via text-based Ordinals. This renewed on-chain activity has pushed transaction fees to historic highs, reshaping miner revenue dynamics and redefining how users interact with the world’s most secure blockchain.
At the heart of this shift lies the BRC-20 standard—an experimental token protocol leveraging Bitcoin’s Ordinal Theory to embed JSON metadata directly into the blockchain. Unlike traditional smart contract platforms, BRC-20 tokens are created through inscriptions, opening a new frontier for digital ownership and speculation—all while consuming minimal block space.
Rising Demand for Bitcoin’s Block Space
This week marked a pivotal moment for Bitcoin’s network utilization. Transaction volume hit an all-time high of 682,000 daily transactions, surpassing the previous peak during the 2017 bull run by nearly 39%. This surge was primarily fueled by BRC-20 activity, as users raced to mint and transfer newly issued tokens.
👉 Discover how blockchain demand impacts transaction efficiency and miner rewards.
The average number of transactions per block more than doubled—from a baseline of around 2,000 to over 4,300 transactions—thanks to SegWit’s 75% discount on witness data. This optimization allows more data to fit within Bitcoin’s 4MB block weight limit, making high-volume inscription activity technically feasible.
Despite the spike in transaction count, active addresses have dipped to cyclical lows, averaging just 566,000 per day. This divergence suggests that many BRC-20 participants are reusing addresses, possibly due to familiarity with account-based systems like Ethereum or Solana. Researcher Tsypruyan observed that 71% of transaction outputs go to previously used addresses, well above the typical 50% baseline seen in exchange-related wallet management.
This behavior not only reflects user inexperience with Bitcoin’s UTXO model but may also indicate centralized tools or bots driving much of the current activity.
The Shift from Images to Text-Based Inscriptions
Earlier this year, the first wave of Ordinal inscriptions was dominated by images, NFTs, and large files—each consuming significant block space. These transactions averaged around 1,500 bytes, contributing to higher fees and slower confirmation times.
Now, the landscape has shifted dramatically. Text-based inscriptions, particularly those used for BRC-20 tokens, are far more efficient. The average transaction size has dropped to just 405 bytes, nearing historical lows. This efficiency enables thousands of token operations to be processed at lower data costs.
As a result, text-based inscriptions now dominate the ecosystem:
- Over 5 million text inscriptions have been recorded—nearly ten times more than image-based ones.
- Text files account for 89% of all inscriptions, totaling 5.69 million entries.
- Daily inscription counts have consistently exceeded 250,000, with peaks above 350,000 in early May.
In terms of network impact, text inscriptions now represent over 50% of confirmed transactions in the mempool—far surpassing the 5–20% share previously held by image-based NFTs. This shift underscores both the scalability and economic efficiency of lightweight data storage on Bitcoin.
Miners Reap Short-Term Revenue Surge
With BRC-20 traders eager to secure fast confirmations, fee markets have exploded. For only the fifth time in Bitcoin’s history, average block fees exceeded the base block reward of 6.25 BTC.
At the peak of the frenzy:
- Average fees per block reached 6.66 BTC, pushing total miner rewards to 12.9 BTC (~$348,000) per block.
- Daily fee revenue in USD peaked at $17.8 million, approaching all-time highs.
- Median transaction fees hit $20.17**, with averages soaring to **$30.80—making simple BTC transfers costly for regular users.
Transaction fees now contribute 11.5% of total miner income, matching levels last seen during the 2017 and 2021 bull markets. Over the past month, miners earned an additional **$100 million in fees**, supplementing their $773 million in block rewards from a BTC price range of $26,000–$30,000.
Text-related inscriptions alone accounted for 30–60% of total fee payments, a massive jump from the 5–20% contributed by image inscriptions during earlier waves.
Statistically, this fee surge is unprecedented. Miner revenue Z-scores—measuring deviations from historical norms—show that:
- Over 1–2 year windows, current fee pressure is accelerating faster than at any point except 2011.
- Across 3–4 year periods, growth exceeds even the 2021 bull market and rivals the explosive rallies of 2013 and 2017.
👉 Explore how fee dynamics influence mining profitability and long-term network security.
However, this boom has been short-lived. The hash price—miner revenue per exahash—briefly spiked to $172,200/EH** before crashing **55% to $76,300/EH as congestion eased. While welcome after the brutal 2022 bear market, this windfall appears transient against Bitcoin’s long-term deflationary mining reward schedule.
Notably, miners have been selling aggressively. Of the 3,275 BTC in fees collected over two weeks, their on-chain balances increased by only 655 BTC (~20%). The rest was likely sold to cover operational costs—a pattern consistent with post-bear-market recovery behavior.
Frequently Asked Questions (FAQ)
Q: What are BRC-20 tokens?
A: BRC-20 is an experimental token standard on Bitcoin that uses JSON text files inscribed via Ordinals to create fungible tokens. It enables token issuance without smart contracts by leveraging Bitcoin’s immutable ledger.
Q: How do BRC-20 tokens affect Bitcoin transaction fees?
A: High demand for BRC-20 minting and transfers increases competition for block space, driving up fees. During peak activity, fees surpassed the base block reward, making transaction costs temporarily very high.
Q: Are BRC-20 tokens secure like Bitcoin?
A: While inscriptions are permanently stored on-chain, BRC-20 lacks native smart contract validation. Users must rely on external tools and community consensus for token integrity, introducing potential risks.
Q: Why are text inscriptions smaller than image ones?
A: Text files (like JSON) contain minimal data compared to images or videos. Combined with SegWit efficiency, this allows more transactions per block and lower overall data costs.
Q: Is this surge in block space usage sustainable long-term?
A: Current levels are likely cyclical. While innovation is positive, sustained high fees could deter everyday use. Layer-2 solutions may eventually help balance utility and scalability.
Q: How do Ordinals differ from Ethereum NFTs?
A: Ordinals inscribe data directly onto satoshis—the smallest Bitcoin units—making each inscription part of the base layer. Ethereum NFTs rely on smart contracts and exist as references rather than embedded content.
Final Thoughts
The rise of BRC-20 tokens and text-based inscriptions marks a transformative phase in Bitcoin’s evolution. It demonstrates growing demand for expressive uses of the blockchain beyond simple payments—proving that even a "non-programmable" chain can foster innovation.
While questions remain about long-term adoption and network sustainability, one fact is clear: Bitcoin’s block space now has new economic value. Whether this trend stabilizes or evolves into broader utility layers, it offers fresh insights into how users value decentralization, permanence, and digital scarcity.
For miners, developers, and enthusiasts alike, this moment underscores Bitcoin’s adaptability—and its enduring role as the foundational layer of trust in the digital economy.