Bitcoin’s BRC-20 and Ordinals Inscriptions: Unraveling the decline

• Magic Eden on Bitcoin to suspend BRC-20 trading.
• BRC-20 transactions and Ordinals Inscriptions have declined over the past few weeks.

The emergence of Ordinal Inscriptions and BRC-20 tokens created significant excitement within the Bitcoin [BTC] community, leading to higher earnings for miners due to increased transaction fees. 

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Nevertheless, the influence of these Bitcoin innovations appears to be waning, as a major marketplace has temporarily halted the trading of BRC-20 tokens.

BRC-20 trading placed on hold

In a significant announcement made on 22 October, Magic Eden on Bitcoin revealed a temporary suspension of BRC-20 trading. The platform explained that this suspension is a precautionary measure to safeguard users while awaiting a complete consensus on Ordinals Inscriptions. 

Ordinals Inscriptions became possible due to the November 2021 Taproot upgrade and serve as the underlying technology for BRC-20’s functionality.

BRC-20 tokens rely on JSON (JavaScript Object Notation) Ordinals Inscriptions for executing token contracts, generating new tokens, and transferring tokens.

These innovations had previously contributed to increased BTC transaction fees, but the current landscape appears to be evolving.

BRC-20 transactions declines

Data from Dune Analytics reveals that in September, BRC-20 experienced an impressive peak of 400,000 transactions. During that same month, BRC-20 transactions accounted for over 60% of the total BTC transactions. Additionally, the volume of these transactions contributed to more than 30% of the fees collected by the Bitcoin network.

Source: Dune Analytics

However, the situation has drastically changed as of the current moment. The total BRC-20 transactions have dwindled to approximately 1,000, representing less than 2% of the overall BTC transactions.

Furthermore, the contribution of BRC-20 transactions to BTC fees has dropped to less than 1%. Unfortunately, Ordinal Inscriptions hasn’t fared any better in this regard.

Daily Ordinals Inscriptions drop with fees

Dune Analytics data showed that Ordinal Inscriptions have experienced a significant decline as well. In September, the daily inscriptions reached an impressive peak of over 400,000.

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However, at present, daily inscriptions have decreased to less than 6,000. Furthermore, the fees paid for these inscriptions have seen a substantial drop, plummeting from around 8 BTC in September to less than 1 BTC.

Source: Dune Analytics

The decline in BRC-20 and Ordinals Inscriptions, as illustrated by Dune Analytics metrics, suggests that Magic Eden’s decision may have been part of a larger trend. However, it will be in the coming days and weeks that we will see the full extent to which their influence has diminished.