- Bitcoin fees hit an all-time high of $128 on the day of the halving.
- Runes protocol contributed greatly to the skyrocketing of Bitcoin fees.
- 82% of all bitcoin holders are unable to move their coins because the fees are more that what they hold in their wallets.
Bitcoin network saw high congestion after the launch of the Runes protocol. This resulted in a surge in transaction fees and delayed confirmations.
The high fees have rendered the Bitcoin network unusable, with 82% of Bitcoin holders being unable to move their Bitcoin due to extreme fees.
Runes, a new protocol by Casey Rodarmor that would allow users to mint tokens on the Bitcoin network, went live on April 20, 2024.
While investors love the innovation behind the Runes protocol, the immediate impact has been less than favorable.
The protocol’s debut coincided with the Bitcoin halving, a scheduled event that reduces the reward for mining new blocks. This combination caused a surge in network activity, pushing transaction fees to an all-time high.
Miners Reap Benefits Amidst User Frustration
Bitcoin miners found themselves on the receiving end of a windfall, as the increased fees translate to higher earnings.
Users, on the other hand, are facing exorbitant costs and longer wait times. The average transaction fee spiked to $128.45 on the day of the launch, more than seven times the rate just a day prior.
The network fee has gone down since and is ranging around $28.20 as of April 25, 2024.
The stability of the Bitcoin network is now under scrutiny, with some questioning whether it can sustain such levels of activity without significant upgrades.
The market has reacted with a mix of apprehension and optimism, as investors weigh the long-term benefits of Runes against the short-term challenges it presents.
Investors are revising their prior statement that ‘Bitcoin is the future of money”. With such high volatility, it is impossible for Bitcoin to work as money for day-to-day purchases.
The Runes protocol launch has brought to light the limitations of the current Bitcoin infrastructure.
While it offers exciting possibilities for the future of tokenization on the blockchain, the network must evolve to accommodate such advancements.