Bitcoin Inscription Hype Fading? Fee Share Drops To 26%
Data shows that Subscriptions’ Bitcoin transaction fee share has dropped to just 26% recently, a sign that the hype around them may be waning.
Bitcoin Subscription Rate Remains High, But Much Lower Compared To Peak
According to data from on-chain analytics firm glassnode, Subscription rate dominance was 62% during peak. An “Inscription” here refers to any form of data directly inscribed on the Bitcoin blockchain.
Inscriptions only became possible when the Ordinals protocol emerged earlier in the year, and since then they have seen numerous applications and rapidly gained popularity.
Since subscription transactions are like any other transfers on the network, they naturally influence the blockchain economics related to transactions. An easy way to gauge the impact of Subscriptions is through Bitcoin transaction fees.
Generally, transaction fees vary depending on the amount of demand on the network. In times of low traffic on the blockchain, investors don’t have to pay any significant amount of fees to complete their transfers quickly, hence the fees remain low.
When there is high congestion on the network, however, holders may have to charge a hefty sum, as there is great competition for the limited transaction capacity that miners have.
Now, here is a graph that shows the percentage share of transaction fees that Bitcoin subscriptions have occupied since its inception:
Looks like the value of the metric has come down a bit recently | Source: Glassnode on Twitter
As displayed in the chart above, Bitcoin’s share of the subscription fee exploded not long after the technology emerged. Most of the contribution came from Image-Based Subscriptions (colored orange in the graph), which played the role of non-fungible tokens (NFTs) on the network.
In April, however, the image inscription fad had disappeared and the share of transaction commissions for this type of transfer had fallen to low values.
Not long after the decline in interest in Subscriptions, however, a new application of the technology emerged: BRC-20 tokens.
BRC-20 tokens are fungible tokens similar to ERC-20 tokens on the Ethereum blockchain and are created in the same way as text-based inscriptions.
From the graph, it is visible that the Subscription transaction fee increased to a new all-time high (ATH) after the emergence of BRC-20 tokens, with the majority of transfers coming unsurprisingly from the text-based type (highlighted in blue) .
On ATH, the metric value reached around 62%, which means that Bitcoin miners received 62% of the total transaction fees from subscription-based transfers.
In recent days, however, interest around Subscriptions seems to have waned once again, as the share of fees from these transfers has dropped to 26%.
This is obviously still a pretty high level, but nevertheless it represents a very significant decline from the peak.
BTC price
At the time of writing, Bitcoin is trading around $26,800, down 2% over the past week.
BTC has gone stale in the past few days | Source: BTCUSD on TradingView
Featured Image of Dmitry Demidko at Unsplash.com, Charts by TradingView.com, Glassnode.com