Bitcoin miners generated $184 million in transaction fees in the second quarter, a significant increase compared to their earnings throughout 2022. This surge in fees, up by over 270% from the first quarter of 2023, marks the first time since Q2 2021 that fees surpassed $100 million in a quarter, as reported by cryptocurrency analytics platform Coin Metrics on July 5.
Miners earn transaction fees for validating new blocks, with the amount dependent on data volume and user demand for block space. The recent increase in fees was attributed to Bitcoin’s price surge boosting revenues and the introduction of BRC-20, a new token standard on Bitcoin that allows minting and transferring fungible tokens on the network using Ordinals inscriptions.
Despite the significant fee increase, fees only accounted for 7.7% of miners’ total $2.4 billion earnings for the quarter; the rest was from Bitcoin block rewards. Miners currently receive 6.25 BTC for each block solved, a reward set to reduce to 3.125 BTC after the network’s upcoming halving cycle in May.
In addition to fee earnings, Bitcoin miners experienced positive developments in Q2. The Bitcoin mining industry successfully opposed the Biden Administration’s proposed Digital Asset Mining Energy (DAME) tax in May. The quarter also saw favorable macroeconomic conditions benefitting United States-based miners with decreased electricity prices due to receding inflation pressures.
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