July 15, 2024
Bitcoin Regains Blockchain Dominance After Halving Event
Bitcoin Halving

Bitcoin Regains Blockchain Dominance After Halving Event

Bitcoin’s blockchain bandwidth usage has surpassed 90% for the first time since the halving event in April, indicating a significant rise in network activity. This milestone is noteworthy despite the cryptocurrency facing an ‘extended level’ of Fear, Uncertainty, and Doubt (FUD), with Bitcoin adoption, transaction, and trading activity remaining robust.

Transactional Share and Token Standards

Dune Analytics user Cryptokoryo highlighted this significant development in a chart, showcasing the defining moment on June 20. On this date, Bitcoin’s dominance in transactional share reached 91.4%, surpassing 6.8% for Runes, 1.6% for BRC-20, and 0.2% for Ordinals. The increase in bandwidth usage post-halving can be primarily attributed to the adoption of new token standards, specifically Runes and BRC-20.

cryptokoryo’s chart depicting the share of transactions across Bitcoin, Ordinals, BRC-20, and Runes in 2024. Source: Duneanalytics

Data from Dune Analytics reveals a substantial rise in transactions involving these token standards, particularly on April 23, when Runes transactions exceeded 750,000. This surge in activity underscores the growing acceptance and implementation of these new standards within the Bitcoin ecosystem.

cryptokoryo’s chart depicting the number of transactions across Bitcoin, Ordinals, BRC-20, and Runes in 2024. Source: Duneanalytics

Analyst Insights on Network Activity

Bitfinex analysts shed light on the mechanics behind this surge in network activity.

“New token standards such as BRC-20 and Ordinals have also contributed to more incentivization to build on BTC rather than other chains as Bitcoin ecosystem keeps gaining more mindshare.”

They explained that “Runes were designed to establish fungible tokens on the BTC blockchain and gained widespread traction, resulting in high transaction volume.” This increased transaction volume, combined with the adoption of BRC-20 tokens, has led to more complex transactions and heightened interaction with the BTC blockchain, significantly increasing the chain’s bandwidth load.

cryptokoryo’s chart depicting the transaction dominance between BRC-20 and Runes in 2024. Source: Duneanalytics

The recent April halving event, which reduced block rewards for miners by 50%, has also played a pivotal role. Miners, in response to the reduced rewards, have prioritized transactions with higher fees to compensate for the loss. This behavior has contributed to the increased number of transactions being processed on the blockchain.

“[After] the halving event, there is typically heightened onchain activity. Traders and investors adjust their positions, leading to more transactions being broadcast to the network.

On the topic of the halving event’s impact, Bitfinex analysts said that the typical pattern resulted in an increased number of transactions being processed and gave momentum to the steady surge in BTC’s blockchain bandwidth usage. This pattern underscores the dynamic nature of the Bitcoin network, where economic incentives drive miner behavior, ultimately influencing overall network activity and bandwidth usage.

Image by Liam Ortiz from Pixabay

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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