Bitcoin miners earned $184M in fees in Q2, surpassing the total for all of 2022.
Bitcoin (BTC) miners earned a staggering $184 million in transaction fees during the second quarter of 2023 — a significant increase compared to the entire year of 2022 — thanks to the surge in Bitcoin’s price and the success of BRC-20 tokens.
This $184 million payout represents a growth of over 270% from Q1 2023, and it is the first quarter to exceed the $100 million mark since Q2 2021, according to a report from cryptocurrency analytics platform Coin Metrics on July 5.
Bitcoin miners receive transaction fees whenever a new block is validated, and the amount is determined by the data volume and user demand for block space.
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Coin Metrics attributes the increase in fees to Bitcoin’s recent price surge, which has boosted “top-line revenues,” as well as the introduction of BRC-20, a new token standard on the Bitcoin network that allows for the creation and transfer of fungible tokens like Ordinals inscriptions. Coin Metrics states:
“The token standard unlocks experimental new use cases for Bitcoin’s core transaction types and accelerates the push to scale Bitcoin with the Lightning Network.”
However, it is important to note that transaction fees only accounted for 7.7% of the total $2.4 billion earned by miners during the quarter.
The majority of their earnings came from Bitcoin block rewards, with miners currently receiving 6.25 BTC for solving each block. This reward is set to decrease to 3.125 BTC after the network’s next halving, expected to take place around May 2024.
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The report also highlights other positive developments for Bitcoin miners in Q2. In May, the mining industry celebrated a victory when the proposed Digital Asset Mining Energy tax by the administration of United States President Joe Biden was blocked.
In this special edition of State of the Network, we take a data-driven look at the most important events that impacted the digital assets industry in Q2 2023. Get the insights here: https://t.co/xpcE27j1Fz #FutureofFinance #PutTruthtoWork pic.twitter.com/67RDHKA2bT
— CoinMetrics.io (@coinmetrics) July 5, 2023
Coin Metrics also notes that miners benefited from favorable macroeconomic conditions in the quarter, with lower electricity prices for miners based in the United States due to “receding inflation pressures.”
However, despite these positive developments, Coin Metrics explains that competition in the mining fee market is intensifying, as Bitcoin’s hash rate continues to reach new all-time highs over the past year:
“Competition remains fierce, with Bitcoin’s hash rate breaking new records during the quarter at 375 EH/s […] Overall network efficiency continues to increase with the adoption of modern ASICs such as the S19 XP.”
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