According to a new research report issued by cryptocurrency trading company Binance, it is stated that the Bitcoin network needs to expand further.
In December 2022, Casey Rodarmour launched the “Ordinals” protocol, creating so-called “patterns” and setting off a cycle of momentum and hype for Bitcoin non-fungible tokens (NFTs) in 2023.
The introduction of “suffixes” has increased demand for Bitcoin block space.
After “Ordinals”, the Bitcoin fungible token standard, BRC-20, was created, and after that, the “Runes” protocol, which was recently launched.
The launch of these new protocols has attracted a new group of users, traders, developers, and even people with a strong interest in Bitcoin.
Currently, cryptocurrency entities are financing and developing Bitcoin projects at an unprecedented rate.
Interestingly, some developers have begun to move from alternative layer 1 networks to Bitcoin.
Besides these protocols, several new Bitcoin projects are currently being worked on while others have been launched.
They range from different activities, with some focusing on creating money markets or providing staking and redeposit services on the Bitcoin network.
Although these innovations signal the community's confidence in Bitcoin's long-term potential, they have led to increased memory pool congestion and higher transaction fees.
Between 2022 and 2023, average Bitcoin transaction fees rose 175% from $1.5 to $4.2.
So far, in 2024, the fee has increased and has risen to $9.
This highlights the importance of scalability solutions in Bitcoin, which can help move some transactions from layer 1 to layer 2 networks, she told Binance.
The cryptocurrency community is focused on boosting Bitcoin adoption, but users may face high transaction fees in the next few years.
In 2023, the Bitcoin network processed 152 million transactions, and this number tends to rise to 1.6 billion if 2% of the world's population makes ten Bitcoin transactions annually.
Binance insisted that if true global mass adoption is truly Bitcoin's goal, it should be clear that at least a few Bitcoin scalability solutions will be necessary.
Meanwhile, solutions for scaling Bitcoin already exist such as “Lightning Network”, “RGB”, “Stacks”, “BounceBit” and “Merlin”.
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