ViaBTC, a cryptocurrency mining pool, highlights the importance of Bitcoin transaction fees, particularly from applications like Ordinals, Runes, and BRC-20s, in ensuring miners' sustainability amidst halving events.
The evolution of the Bitcoin network has expanded its use cases and user base, significantly affecting miners' fee income from on-chain transactions. Before the launch of the Ordinals protocol in January 2023, miners relied solely on peer-to-peer transaction fees alongside the block subsidy, which halves every 210,000 blocks.
ViaBTC emphasizes that while mining revenue can increase with Bitcoin's price surge, further development at the application layer, such as Ordinals and Runes, can drive network activity and compensate miners. ViaBTC's firsthand experience includes mining a halving block with a record-setting 37.6 BTC transaction fee, demonstrating the potential of increased network activity.
The significant reward earned by ViaBTC on halving day, totaling $78.3 million, showcases the growing importance of transaction fees. This aligns with Satoshi Nakamoto's prediction that transaction fees would become the main source of miners' compensation as block subsidies decrease.
Fees by blockchains and protocols on April 20. Source: Crypto Fees
Despite the potential of Ordinals, Runes, and BRC-20s, fluctuations in popularity and instability in miner revenue have been observed. ViaBTC has navigated three halving events since its inception in 2016, underscoring the challenges faced by mining pools amidst Bitcoin's evolving landscape.
With a hash rate sourced from miners in 118 countries, ViaBTC continues to play a significant role in the Bitcoin mining ecosystem, adapting to changes and contributing to network sustainability.
While transaction fees offer potential solutions to the mining subsidy problem, challenges such as protocol popularity fluctuations require careful navigation. ViaBTC's insights shed light on the evolving dynamics of Bitcoin mining and the importance of transaction fee-based revenue in ensuring long-term sustainability.
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