Why Bitcoin miners made over $36 million in fees in the past seven days?
The rise in Bitcoin network transaction fees is mainly due to the hype surrounding ordinals NFTs and BRC-20.Author: wesely
Original Title: “BRC-20 Explodes, How Much Have Miners Earned?”
Original Source: The Way of DeFi
In March 2023, Twitter user @domodata created an experimental Token standard for Bitcoin, utilizing the ordinal inscriptions of JSON data to deploy tokens, mint, and transfer—this is now known as BRC-20.
BRC-20 is derived from the Ordinals protocol, which was in its development phase in March and experienced explosive growth in April and May.
On-chain data shows that starting from May 1, the average transaction fee for BTC began to rise significantly, increasing from an initial 2U to now 20U.
Bitcoin Average Transaction Fee Trend Chart
Composition of Miner Revenue—Currently, miner revenue consists of two main components:
Block Reward: 6.25 $BTC / block
Transaction Fees: These are the fees for packaging transactions. The amount of transaction fees varies based on network conditions and user settings, measured per byte. Currently, the average fee for low-priority transactions in the Bitcoin mempool is about 300 sats/byte, which is approximately 11u/byte.
The transaction fee income per block for Bitcoin miners also exceeded 1$BTC starting from May 1 and has been on a rapid rise. In the past few hours on the morning of the 8th, the transaction fee income for a single block reached an astonishing 6$BTC, with some blocks' transaction fees even exceeding the block reward itself.
Currently, the total transaction fees spent on BRC-20 amount to about 493 BTC, of which 245 BTC were spent in the last 24 hours, accounting for 49.6% of the total expenses since the inception of BRC-20.
1. BRC-20 Explodes, How Much Have Miners Really Earned?
We conducted a rough estimate of Bitcoin miner income over the period from May 1 to May 8 (our cutoff time is: May 8, 11:31:34 AM Beijing Time) and obtained the following data:
During the statistical period, the total revenue for miners (block rewards + transaction fees) was 8100 BTC;
Among them, the number of counted blocks was 1090, with the total block reward for miners being: 1090 X 6.25, totaling 6812.5 $BTC.
During the statistical period, the total transaction fee income for miners was approximately 1288 $BTC, accounting for 15.9% of total income, meaning that Bitcoin miners captured transaction fees worth over 36 million USD in the past week.
Based on the proportion of mining pools, Foundry pool earned the most in transaction fees, approximately 11.736 million USD. The specific amounts and proportions of transaction fees for each pool are as follows:
Foundry 32.6% 420 BTC 11.736 million USD
Antpool 19.88% 256 BTC 7.2 million USD
f2pool 10.49% 135 BTC 3.78 million USD
ViaBTC 8.52% 110 BTC 3.08 million USD
Historical High “GAS” Moments for Bitcoin—Although current Bitcoin transaction fees are high, there have been even higher records in history.
On December 22, 2017, the average transaction fee for Bitcoin exceeded 55u, with high fee conditions lasting for about two weeks, corresponding to the peak of the Bitcoin bull market at 20,000 USD. In 2017, at block height 500521, a block's transaction fee reward reached 13.7 BTC, making it the highest fee block in terms of coin-based calculation.
On April 22, 2021, the average transaction fee for Bitcoin exceeded 62u, with high fee conditions also lasting for about two weeks, corresponding to the peak of the last bull market at 64,000 USD.
From this, it can be seen that the three most profitable methods in the crypto world are often said to be: Bitcoin mining, exchanges, and token factories.
2. The Future of Ordinals and BRC-20
The recent rise in Bitcoin network transaction fees is mainly driven by the hype surrounding ordinals NFTs and BRC-20.
In particular, the BRC-20 token $VMPX has become the main driving force behind this surge in Bitcoin transaction fees.
$VMPX is a BRC-20 token launched by the 21st Google employee and founder of XEN, @mrJackLevin, which was publicly minted early this morning and has now completed minting, causing major trading sites and wallets for BRC-20 to crash.
In addition, due to the current insufficient liquidity of BRC-20, some centralized exchanges (CEX) have begun to release related tokens.
The First BRC-20 Listed on CEX
BRC-20 has emerged with the same kind of controversy and excitement as MEME coins, facing skepticism from Bitcoin OGs, the market's enthusiastic celebration, and the silent yet profit-absorbing Bitcoin miners, all while the congested Bitcoin network has forced exchanges to pause withdrawals. These factors raise more questions about whether BRC-20 can truly develop into an independent narrative and a stable sector.
Currently, the extremely high fee threshold and operational barriers also hinder the development of BRC-20. Whether BRC-20 can integrate with the Lightning Network, move beyond the simple narrative of token issuance, and merge with Bitcoin L2 solutions like RGB that have smart contract capabilities, remains to be seen.
How much change BRC-20 will bring is unknown, but this stone has already been thrown into the lake, and all we can feel are the ripples.
The most unceasing aspect of the crypto industry is the emergence of new stories.
