Bitcoin transactions smash the record — what just happened?
By Tom Rodgers, Head of Research, ETC Group
The Bitcoin network just obliterated the record for the number of transactions processed, surpassing its previous weekly peak set in 2019 by more than 300,000.
So what just happened?
The daily count of Bitcoin transactions hit a record of over 568,000 on Sunday 30 April 2023.
Analysis of these transactions shows that 350,000 came from Bitcoin Ordinals.
More than 3 million Bitcoin Ordinals have now been created.
ETC Group has been following the rise of Bitcoin Ordinals since their creation in December 2022.
Ordinals are Bitcoin’s version of NFTs.
Ordinals are a new asset type that it was previously thought impossible to produce on the Bitcoin blockchain, due to its data structure and limits in its scripting language.
Since their creation by researcher Casey Rodarmor, Ordinals have produced more than 250 BTC in fees for Bitcoin miners.
Ordinals can take many different forms.
The most common are images, followed by audio, text files, video clips and software applications.
During the last peak in 2019, most Bitcoin transactions skewed towards larger transactions, in the range of $1,000 to $10,000. This suggests most Bitcoin users were using the blockchain for trading.
Compare this to today.
The largest cohort of Bitcoin transactions — 359,560 — came from transactions under $1.
Small transactions under $1 lead the record spike.
This suggests a huge increase in Bitcoin velocity — or the amount of Bitcoin being transacted by users, instead of being locked up in cold wallets and held over the long term.
The introduction of NFT-like assets on the Bitcoin blockchain has not only enthused a new wave of developers but also brought forward an enticing new revenue stream for miners who are hyper-focused on block rewards.
Bitcoin will undergo its next Halving in 2024. When that happens, the amount of new BTC being created per block will be cut in half from 6.25BTC to 3.125BTC.
That means the revenue generated from block rewards will fall dramatically.
Users of the Bitcoin blockchain pay fees to miners to have their transactions or data included in the next block. Once added, blocks cannot be removed from the Bitcoin blockchain, creating an indelible record that cannot be altered.
What is really interesting about Bitcoin is that it is not just digital gold.
While BTC is currently used as a store of value, it also has many other applications that are emerging more than 10 years after it was created.
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