As Bitcoin network gets busy, miners reap rewards
- Transaction fees reached 8.05 in BTCs for a particular block.
- Average transaction fees hit the second-highest level of the year on the 16th of December.
Bitcoin [BTC] miners laughed all the way to the bank as the total fees they collected for validating transactions exceeded the fixed block subsidy on multiple occasions in the last 24 hours.
Transaction fees > block rewards
AMCrypto analyzed Mempool data and spotted a particular block 821486 with total transaction fees of 8.05 in BTCs. This was more than the predefined 6.25 units that miners receive upon successful generation of a block.
The block, mined by Foundry USA, a top miner in the industry, generated total revenue of 14.30 BTC, amounting to a whopping $588,695 as per prevailing market prices.
This marked one of the highest fee generations for the network in 2023.
Upon further scrutiny, AMBCrypto discovered at least six more blocks in the same period where miners earned more in fees than fixed rewards.
As is well-known, miners need to be incentivized to safeguard the Bitcoin network’s security and validate tons of transactions that land each day.
The block subsidies are designed to exponentially decrease and reach 0. Thus, the discussion has started to shift towards fee revenue.
Sign of heavy network traffic
The past year has seen appreciable spikes in daily fees. As per Glassnode, miners earned 0.00059 BTC on average on the 16th of December, the second-highest of the year since the peaks scaled in early May.
High median fees indicated transaction urgency and block congestion. AMBCrypto scanned Mempool and found 314,267 transactions waiting in the queue as of this writing.
The memory consumption per block exceeded the 300 MB limit by 1.36 GB, leading the network to discard transactions below 17.6 sats/vB, or Satoshi per byte.
Even fees of 301 sats/vB, or $18.59, were assigned a low priority. On the other hand, users willing to shell out 377 sats/vB, or $22.28, are the highest priority.
Read Bitcoin’s [BTC] Price Prediction 2023-24
Miners in profits
The jump in transaction fees countered the sharp rise in hash rate, in turn, boosting miners’ hash price. As per data fetched from Hashrate Index, the hash price surged to $127 per PetaHashes per day (PH/Day), the highest since May.
An important barometer of miners’ profitability, hash rate is positively correlated with transaction fees.