- Binance paused and resumed BTC withdrawals twice in 24 hours.
- The congestion was due to high BRC-20 transaction fees.
- More about BRC-20 tokens.
YEREVAN (CoinChapter.com) – Binance paused Bitcoin withdrawals on its platform for the second time in the previous 24 hours, citing the large volume of pending transactions. The platform paused transactions on May 7, as unconfirmed transactions hit a record high.
To prevent a similar recurrence in the future, our fees have been adjusted. We will continue to monitor on-chain activity and adjust accordingly if needed. Our team has also been working on enabling BTC Lightning Network withdrawals, which will help in such situations.
commented the platform after resuming the withdrawals.
The congestion was due to the ongoing Bitcoin Ordinals craze and the spiking transaction fees due to the heightened BRC-20 token demand.
Also read: Are BRC-20 tokens the new meme coins? A 600% explosion in market cap shows so.
The “BRC-20 effect” brought the total fees paid to 493 BTC and the overall number of BRC-20 transactions to 3.5 million. In detail, transaction fees spiked on May 7, reaching just under 7.9BTC.
While the congestion raised many complaints, crypto analyst Miles Deutscher asserted that high fees might benefit the blockchain as they “feed” miners.
Despite the inconvenience of paying higher gas fees, in many ways, an increase in fees is actually GOOD for the Bitcoin network. More fees = more rewards for miners, which incentivizes BTC mining (making the network more decentralized & secure).
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BRC-20 meme coin craze on the Bitcoin blockchain
Moreover, 450,000 BTC transactions remain unconfirmed due to congestion.
BRC-20 tokens are an experimental token standard on the Bitcoin blockchain that uses the Bitcoin Ordinals Protocol. Originally, Bitcoin Ordinals, i.e., NFT-like inscriptions on the blockchain, first came about in Jan 2023 and quickly gained an audience.
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The inscriptions triggered a lot of controversy around them. One camp condemned the idea of “mismanaging” the Bitcoin blockchain, while the other hailed Ordinals as a way of sidestepping the security budget problem.
Then BRC-20 tokens came along in early March. Their developer @domodata commented that “anyone can deploy, mint, or transfer” BRC-20s using ordinal inscriptions.
Despite the initial dispute, there are over 14,000 BRC-20 tokens as of May 8, most of them meme coins. Moreover, the BRC-20 tokens have gained over $500 million in market cap since early March.
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