BTC Ordinals Craze Puts Miners in Dilemma: Glassnode

cryptonews.com:

A new Glassnode report says that Bitcoin (BTC) Ordinals are not displacing monetary transfers despite concerns of network clogging.

In a Sept 25 release, on-chain analytics firm Glassnode explained the role of BTC inscriptions on the network, their impact in competition with other transactions, and how they shape the mining industry.

According to the report, there is minimal evidence that Ordinals are displacing high-value transactions as many community members believe. 

This is based on the fact that inscriptions consume less space, cost less and users are willing to wait longer periods for confirmation.

“Since Bitcoin transaction fees are paid on a per-data basis (fee per byte), inscriptions tend to be relatively sensitive to the size of the absolute fee. As such, inscription users have tended to set relatively low fee rates, expressing a willingness to wait longer periods for confirmation.

Inscriptions makeup 20% of block fees and usually consume the cheapest available block space and are described as “pocket fillers” to fill blocks faster while being periodically displaced by more pressing transfers.

This can also be seen in the mean and median transfer volumes of which the mean represents monetary transfer movements while the median could represent inscriptions over a long time. 

The general notion is that inscriptions have given miners a new income stream with more filled blocks. 

Observers have noted in the past that while miners suffer from a bearish outlook forcing many to pivot into Artificial Intelligence, selling Bitcoin reserves, etc.

While block space demand has improved miners' fees since February, the amount of hash rate has also increased by 50% since the roll-out of Ordinals. 

“This has driven the hash price,