Bitcoin (BTC) miners have achieved a new revenue milestone from validating transactions, following the 2024 halving. As Bitcoin fees surge, these miners are making high earnings, sparking discussions about the future dynamics of the network.
Following the recent Bitcoin halving on April 20, 2024, miner revenue surged to an all-time high of $106.7 million, with 75.444% of it stemming from network transaction fees. This highlights a pivotal shift in miner compensation strategies post-halving.
Surge in revenue amidst reduced block rewards
The recent halving, which took place on April 20, 2024, drastically reduced the block reward from 6.25 to 3.125 Bitcoin. This strategic adjustment is designed to slow the increase of the total Bitcoin supply, which is capped at 21 million coins.
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Despite the reduction in block rewards, miners experienced a significant boost in total block revenue, which climbed to 21.74 BTC. The primary driver behind this increase was a spike in transaction fees, which accounted for nearly 18 BTC of the average block revenue, according to data from OKLink.
This remarkable achievement highlights a pivotal shift in the compensation strategies for miners and raises crucial questions about the future dynamics of the network.
Accompanying the surge in revenue, the Bitcoin hashrate also registered 625.40 EH/s at block height 840,207 with a difficulty level of 86.38T.
Impact of Runes protocol on transaction fees
Prominent mining pools, including Foundry, Antpool, Viabtc, Poolin, and F2pool, have played essential roles in this financial windfall, particularly in securing blocks that carried hefty transaction fees. These fees saw a dramatic increase to $240 per transaction with the introduction of the Runes protocol, though they have since adjusted to a range of $35 to $75.
This period also witnessed a record level of on-chain activity, with the number of transactions on the Bitcoin network reaching a new high of 991,029,144 transactions in a single week.
This uptick in activity explains the corresponding increases in miner revenue and hashrate. As the Runes token protocol kicked off with the 2024 halving, it sparked intense competition for block space, with participants striving to be the first to generate tokens
The evolving landscape of Bitcoin mining
As the cryptocurrency sector adjusts to these new economic conditions, the impacts on network security, miner profitability, and Bitcoin fees will become clearer over time.
The rising share of transaction fees in total block revenue is already spurring the development of second-layer solutions like the Lightning Network. This innovation aims to decrease costs and improve transaction speeds on the blockchain, addressing some of the scalability issues faced by the network as it continues to grow.
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