1 year ago
On Saturday, December 16, the outgo of transacting successful bitcoin eclipsed its erstwhile highest from May 8, 2023, surging past $40 per transaction. The inclination of escalating onchain fees began connected the last time of October, steadily expanding thereafter. Numerous crypto proponents foresaw this spike, suggesting a imaginable displacement to Layer 2 (L2) platforms arsenic a prudent measure. Despite an archetypal summation successful the quantity of BTC connected the Lightning Network from precocious October to November’s conclusion, astir 350 bitcoin person been withdrawn successful the consequent 1 and a fractional months.
The Rush to L2s Remains Underwhelming
After a brief pause successful September 2023, Ordinal inscriptions surged towards October’s end, presently accounting for 40-50% of Bitcoin’s transactions. In November, BTC miners deed grounds highs, processing an unprecedented fig of transactions successful a azygous day, and earning important fees from these inscriptions.
Yet, the surge successful inscription use, combined with bitcoin’s fiscal transactions and rising prices, has led to a important buildup of unconfirmed transactions. By Saturday afternoon, 2 p.m. (EST), the mempool had soared, nearing the 400,000 people from 300,000.
Concurrently, fees escalated, crossing the $40 per transaction threshold arsenic the mempool exceeded 300,000 unconfirmed transactions. Warnings astir this precocious interest complaint situation person been circulating for immoderate time.
On November 7, 2023, Barefoot Mining’s Bob Burnett cautioned astir this trend, recommending semipermanent storage. Similarly, others successful the crypto assemblage person suggested shifting to offchain solutions similar the Lightning Network.
The Lightning Network’s capableness expanded modestly from 5,440 BTC to 5,540 BTC by November’s end. Yet, since November 25, 2023, astir 350 BTC, valued astatine astir $14.8 million, has exited the L2 network.
The Lightning Network present holds 5,190 BTC, little than what it had erstwhile fees began to emergence connected Halloween. One mightiness expect an summation successful capableness earlier the high-fee complaint situation became overwhelming.
However, this enlargement didn’t materialize. In this situation of fluctuating precocious fees, those opting for the Lightning Network look onchain fees to entree this L2 solution. Meanwhile, Blockstream’s L2 solution, Liquid, has seen a rise successful capacity, with 199 BTC added since November, arsenic stated connected the firm’s website.
Yet, Liquid’s explorer indicates minimal transaction enactment successful blocks. Between artifact heights 2,640,919 and 2,640,976, blocks contained nary much than 7 transactions each. In this precocious interest complaint climate, newcomers look daunting challenges adapting, often bewildered by the analyzable dynamics driving these onchain costs.
Despite anterior warnings, the assemblage mostly disregarded the signs, starring to an unexpected diminution successful the Lightning Network’s capacity. This inclination starkly contrasts with the anticipated and favored increase, highlighting a disconnect betwixt expectations and the evolving realities of the cryptocurrency landscape.
Even though determination are further L2 solutions disposable for BTC, truthful far, these excessively are not experiencing a important migration towards their scaling options. Based connected factual information from caller weeks, mounting speech subjective views, it seems that users are consenting to navigate the steep onchain fees, opting not to crook to alternate solutions.
What bash you deliberation astir the diminution and lackluster request for Bitcoin L2 solutions earlier and amid the high-fee complaint environment? Share your thoughts and opinions astir this taxable successful the comments conception below.
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