Story Highlights:
- Bitcoin network congestion has caused transaction fees to rise, with medium-priority transactions costing $34.08.
- OKX’s internal consolidation transactions have been identified as the leading cause of the current Bitcoin network congestion.
- Developers believe that adding adaptability to the Bitcoin blockchain could drive the next major rally for cryptocurrency.
Bitcoin users are experiencing critical transaction delays and high fees as the blockchain faces congestion. Space, a medium-priority Bitcoin transaction, currently costs $34.08 for prompt processing, with over 333,400 unconfirmed transactions awaiting confirmation.
The rise in fees has frustrated many in the cryptocurrency community. They have voiced their concerns on Twitter, highlighting Bitcoin’s limited transaction capacity and advocating for adopting more efficient layer 2 solutions and sidechains. Meanwhile, Bitcoin miners benefit from increased revenue, earning more than double the usual amount per block due to the fee surge.
Bitcoin Network Congestion is Not Caused By Ordinals
The current congestion is not linked to the Ordinals or Runes protocols, which previously drove fees to high levels. CryptoQuant, a cryptocurrency analytics platform, has identified the leading cause as internal transactions by OKX, a major crypto exchange based in Seychelles. Julio Moreno, Head of Research at CryptoQuant, explained on Twitter that OKX’s efforts to consolidate outputs have led to a fee spike.
When users transfer Bitcoin between wallets, they must pay fees on each unspent transaction output (UTXO). This can result in significant costs for large transfers. Exchanges, dealing with many small incoming and large outgoing transactions, and consolidate their UTXOs to mitigate fees, typically when network fees are low. However, when a major exchange like OKX undertakes this consolidation process, it can significantly increase costs across the network, causing inconvenience for other users.
Programmability Predicted as Bitcoin’s Next Step
A group of developers believes that introducing significance to the Bitcoin blockchain could drive the cryptocurrency’s next major rally. While Bitcoin is currently viewed primarily as digital gold and a store of value, developers argue that adding adaptability would unlock a range of new functionalities and applications.
Ethereum supports the creation of smart contracts and robust match applications, but the Bitcoin blockchain lacks these capabilities. Developers have attempted to address this by creating “Layer 2” networks like Lightning to scale Bitcoin for payment applications. These solutions have often proven unpredictable, and the bridges used to transfer tokens between networks have been prone to hacks, leading to user apprehension.
The Bitcoin network is again experiencing crowding, leading to high transaction fees and delays. While OKX has identified the root cause as merge transactions, the situation has reignited discussions about the need for more efficient solutions and the potential for alteration to drive future growth.
Personal Note From MEXC Team
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