According to cryptocurrency mining pools, Bitcoin transaction fees for applications like Ordinals, Runes, and BRC-20s will be key to ensuring miners stick around even as more halving events occur.
“The evolution (of the Bitcoin network) has expanded the variety of use cases and increased the user base, which has had a significant impact on miners’ fee income from on-chain transactions,” ViaBTC told Cointelegraph in a recent interview.
Before the launch of the Ordinals protocol in January 2023, miners relied on peer-to-peer transaction fees that came with block subsidies. This is halved every 210,000 blocks, which has a “clear” impact on miners’ profits over the long term, ViaBTC said. .
While rising Bitcoin (BTC) prices may also increase mining revenues, further development of the application layer will increase network activity and expand utility, providing significant rewards to miners, ViaBTC explained.
ViaBTC experienced this first-hand when they mined the very popular halving block at block 840,000 on April 20th. This block included a then-record 37.6 BTC transaction fees (worth $2.4 million at the time).
Taking into account the new 3.125 BTC block subsidy, rewards totaling 40.7 BTC came from memecoin and non-fungible token enthusiasts competing to mint “rare satoshi” and fungible tokens via the new Runes token standard released in the halving block.
ViaBTC told Cointelegraph that while it had a “hunch” that transaction fees would eventually break the 30, 40, and 50 BTC barriers, it did not expect to be the beneficiary of such huge rewards, let alone halving blocks.
Bitcoin miners cashed out a whopping $78.3 million on the day of the halving, but earned more in fees than Ethereum stakers and Uniswap liquidity providers on nine of the last 20 days following the halving, according to Crypto Fees.
Satoshi Nakamoto, the pseudonymous creator of Bitcoin, predicted that transaction fees would eventually become the main source of compensation for miners as block subsidies were halved, ViaBTC noted.
Related: Price consolidation after Bitcoin halving could last 2 months — Bitfinex
ViaBTC added, “If these transactions find broader utility in the future and make significant technological advancements, they could gain more attention and awareness.”
However, Ordinals inscriptions, Runes, and BRC-20 have seen several rises and falls in popularity since the launch of each protocol, which has made miner profits somewhat unstable.
ViaBTC has experienced three halving events since it began operations in 2016, with its 840,000th block being the 37,534th block mined in 2,900 days.
The mining pool’s hashrate is sourced from miners in 118 countries.
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