Bitcoin miners made millions in fees in Q2, thanks to…
- Q2 2023 is the first quarter to exceed the $100 million mark since Q2 2021.
- The figure is more than five times the fees earned during the preceding five quarters combined.
Bitcoin [BTC] miners made $184 million from transaction fees in the second quarter of 2023. The amount is far more than what the miners made throughout 2022.
The finding is based on a report published by the cryptocurrency analytics platform Coin Metrics on 5 July.
Q2 2023 is the first quarter to exceed the $100 million mark since Q2 2021. The payout amount of $184 million reflects a surge of more than 270% from Q1 2023. In fact, the figure is more than five times the fees earned during the preceding five quarters (Q1 2022- Q1 2023) combined.
However, the transaction fees accounted for only 7.7% of the total $2.4 billion that miners earned during the last quarter.
The report attributed this surge in transaction fees to Bitcoin’s recent price rally and the introduction of BRC-20 token standard and Ordinals.
BRC-20 and Ordinals benefit Bitcoin miners
The BRC-20 token was announced in March 2023. It employs Ordinals inscriptions to mint and transfer fungible tokens on the Bitcoin network. This new class of tokens is modelled after Ethereum’s [ETH] ERC-20 token standard. Since their introduction, the market capitalization of BRC-20 tokens has risen to more than $240 million.
Bitcoin Ordinals was launched in January 2023. Ordinals is a Bitcoin protocol allowing people to create NFT-like assets on the network by inscribing data to a single satoshi. Satoshi is the smallest unit of currency that we can divide Bitcoin into, i.e. 1/100,000,000 of one unit of BTC.
Bitcoin miners also benefited from better macro-economic conditions in last quarter, with “receding inflation pressures” leading to lower power rates for U.S.-based miners, the report mentioned.
The report also added that payout amounts related to transaction fees have dwindled as the excitement around BRC-20s tokens ebbs. Nonetheless, the amount of compensation miners receives from transaction fees remained substantial.
However, as Bitcoin’s hashrate has continued to achieve new all-time highs over the last 12 months, competition in the mining fee market has tightened.