Bitcoin’s Ordinals: Runes and Mining Subsidy

According to ViaBTC, a cryptocurrency mining pool, transaction fees from applications like Ordinals, Runes, and BRC-20s will be crucial in ensuring that miners continue to operate as more halving events occur. The evolution of the Bitcoin network has led to various use cases and a growing user base, which has greatly affected miners’ fee income from on-chain transactions. Previously, miners relied on peer-to-peer transaction fees alongside the block subsidy, which halves every 210,000 blocks and has a long-term impact on miners’ revenue. Mining revenue can also increase with an increase in Bitcoin’s price, but further development at the application layer will help broaden its utility and compensate miners.

ViaBTC experienced this firsthand when it mined the halving block on April 20, which came with a record-setting 37.6 BTC transaction fee worth $2.4 million at that time. This reward came from memecoin and nonfungible token enthusiasts competing to use the new Runes token standard. ViaBTC anticipated that transaction fees would eventually surpass 30, 40, and even 50 BTC, but they didn’t expect to receive such a massive reward, especially at the halving block.

Bitcoin miners made an astonishing $78.3 million on halving day, and they have also earned more from fees than Ethereum stakers and Uniswap liquidity providers on nine out of the last 20 days since the halving, according to Crypto Fees. Satoshi Nakamoto, Bitcoin’s creator, predicted that transaction fees would become the main source of compensation for miners as the block subsidy decreases. If applications like Ordinals, Runes, and BRC-20s continue to gain popularity and make significant advancements, they may receive more attention and recognition.

These applications have seen fluctuations in popularity since their launch, leading to some instability in miner revenue. ViaBTC has experienced three halving events since it started operating in 2016, and the 840,000th block was the 37,534th block that it had mined in its existence of 2,900 days. The mining pool’s hash rate comes from miners in 118 countries.

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