Starting from the end of January, both the transactions of Ordinals and the fees on the Bitcoin blockchain have significantly decreased. 

It was not a real collapse, but a slow return to normality. 

However, normality is no longer that of the end of 2023, but the situation is still significantly better than that of the end of December.

Ordinal transactions on the Bitcoin blockchain

According to on-chain data, the daily peak on the Bitcoin blockchain, in terms of Ordinals, occurred in November 2023, but the number of daily transactions with Inscription remained high until the end of January.

However, suddenly at the beginning of February it dropped significantly, and although it did not go as low as in October 2023, it decreased four times. 

Daily peaks, however, are not constant, because for example on January 13th transactions with Inscription were more than 470,000, while on the 21st of the same month they were less than 100,000. 

However, if we analyze the weekly trend, it has dropped by about four times in the first week of February compared to the last weeks of January. 

Ordinals and NFTs: Transactions on the Bitcoin blockchain

This sharp reduction has also led to a decrease in the overall number of validated transactions each day. 

The on-chain data indicate that the peak of the last twelve months from this point of view was reached on December 31, 2023, with over 730,000 transactions in one day.

For the Bitcoin blockchain, these are definitely high numbers, since for example in October they rarely exceeded 300,000 per day.

Although in the month of January, for three more times the daily peaks were higher than 600,000, there were also several days with less than 400,000 transactions. 

So in December, in addition to the exaggerated volumes of transactions of the Ordinal, there was also a high volume of ordinary transactions, generating a boom that, however, had already subsided by January.

In February so far there has not been a single day with more than 600,000 transactions, and only one with more than 500,000. There have already been three days with less than 300,000 transactions, which is in line with the average for October. 

The fees

This drop has finally led to a significant reduction in fees. 

By analyzing the average daily cost per single transaction, it is discovered that shortly after mid-December it had even skyrocketed to over $37, a figure that many considered excessive. 

Already at the end of December, on some days the average cost per transaction had dropped to $10, but it is in January that the biggest decrease occurred. In fact, by the end of the month, we even dropped below $4, a figure in line with the recent past. 

At the beginning of February there was another brief peak above $14, but in the following days it dropped back below $4. 

However, while the average cost per transaction is indicative of the trend of increasing or decreasing fees, it would be better to use the median as a reference for individual transactions. 

By mid-December, the median transaction fee had reached almost $25, but by early January it had dropped to $3.3. These numbers are absolutely in line with those of the recent past. In fact, by the end of January, the median had dropped to around $1.6, which is a completely normal, although not low, fee. 

1.6$ is also the value of the median of the daily transaction fees of the last few weeks. 

It should always be remembered that to move a few BTC, or a few Satoshis, it would be better to use Lightning Network, and not the classic on-chain transactions, because with LN the fees are significantly lower to the point of being irrelevant in some cases. 

Since in order to use LNB it is necessary to open a channel, and the opening of the channel requires a single on-chain transaction, it would be convenient to open it now that on-chain fees are low.

In the future, it will no longer be necessary to make on-chain transactions with that channel until it needs to be closed, saving a lot of fees.

The correlation with the price

As can be easily seen from these data, there is no correlation between the cost of Bitcoin fees and the price of BTC.

In fact, the main problem is caused by the Ordinals, which are not BTC. They are a kind of NFT on the Bitcoin blockchain obtained by exploiting the potential of the so-called Inscriptions, which in turn are not BTC but information recorded on the Bitcoin blockchain. 

The same Bitcoin blockchain was not designed for the creation or transfer of non-fungible tokens, so the Ordinals are actually an unoptimized workaround that ends up having an excessively negative impact on the use of Bitcoin. 

Instead, for example, if they were exchanged on a layer-2 like LN, the problem would be greatly reduced, because on the blockchain there would be only the transaction of creating the tokens as usual, but not those of possible exchange. 

It is hoped that sooner or later those who exchange Ordinal will realize how convenient it could be to exchange them on a low-cost layer-2, instead of exchanging them directly on the high-cost blockchain.