The Bitcoin network is once again struggling with a major bottleneck. According to data from data analysis companies, there are more than 550 thousand transactions expected to be confirmed on the network as of our news hour.
This situation in the Bitcoin network is not the first. A similar picture occurred in May 2023, when the popularity of BRC-20 tokens increased, and Binance suspended Bitccoin withdrawals on May 8 due to network congestion. His current congestion is thought to be due to a similar cause.
BRC-20 tokens use a protocol called Ordinals that allows users to write data to the Bitcoin network using JSON, a format for data storage and exchange. Simply put, BRC-20 tokens are actually nothing but Satoshis, the smallest unit of Bitcoin. Extra data is associated only to these Satoshis using the Ordinals protocol.
As Bitcoin miners struggle to meet this demand on the network, block times have increased to 10.9 minutes. Meanwhile, transaction fees have also increased.
While there is a significant delay in transactions with BTC due to this congestion in the Bitcoin network, it harms the trust in BTC.
This increase in unconfirmed transactions and blocked blocks may cause exchanges to suspend Bitcoin withdrawals again. In this case, users are expected to turn to altcoin networks that offer cheaper transaction fees.
*Not Investment Advice.