Bitcoin's Block Size Set to Explode: 4MB Inscriptions Loom

Bitcoin's block size could potentially grow to 4 MB with increased inscriptions, according to a recent report by Mempool Research. The average block size of the Bitcoin network is currently around 1.5 MB, but it could significantly increase if inscriptions, a method for efficiently encoding arbitrary data inside a block, become more widely adopted. This would address one of the most significant constraints on the Bitcoin network's scalability.

The report projects a range of potential growth scenarios for the Bitcoin blockchain, from a return to pre-inscription dynamics to widespread inscription adoption. In the latter case, the blockchain could potentially drive growth as high as 4 MB per block. Under these scenarios, the blockchain could reach 1 TB as early as late 2026, though mid 2027-2029 seems more likely.

Bitcoin's 2021 Taproot upgrade enabled the network to support more complex activities, including creating and trading other types of tokens and minting non-fungible tokens (NFTs). This has reinvigorated the oldest blockchain network, with Bitcoin-native decentralized finance (DeFi) expected to be among the hottest themes in 2025 as institutional Bitcoin adoption accelerates and its DeFi ecosystem matures.

However, Bitcoin faces competition from networks touting far more block space, enabling more complex transactions and potentially lower costs for users. In September, Celestia — a layer-1 network specializing in data availability — unveiled a technical roadmap charting a path to increased scalability and efficiency.