Opinion: Bitcoin’s ordinals and runes are the key to solving the mining subsidy problem

Author: Brayden Lindrea Source: cointelegraph Translation: Shan Ouba, Golden Finance

With each Bitcoin halving, the block rewards received by miners will decrease, but ViaBTC is optimistic that innovative Bitcoin applications will be more than enough to make up for these needs, just as Satoshi Nakamoto envisioned.

According to a cryptocurrency mining pool, Bitcoin transaction fees from applications such as Ordinals, Runes and BRC-20 will be key to ensuring that miners can continue to stay even after more halving events.

“The evolution [of the Bitcoin network] with more and more use cases and a growing user base [significantly] impacts miners’ fee income from on-chain transactions,” ViaBTC told Cointelegraph in a recent interview.

Before the launch of the Ordinals protocol in January 2023, miners relied solely on peer-to-peer transaction fees that accompany block rewards — which halve every 210,000 blocks, thus having an “indisputable” impact on miners’ income in the long run.

Mining revenues may also increase with Bitcoin (BTC) prices, but further development of the application layer will increase network activity, broaden its utility, and thus compensate miners handsomely.

ViaBTC experienced this firsthand on April 20, when it mined the much-coveted halving block (block 840,000), which came with a record-breaking 37.6 BTC in transaction fees — worth $2.4 million at the time.

That reward totals 40.7 BTC, including the new 3.125 BTC block subsidy, as emoji and NFT enthusiasts scramble to inscribe “rare satoshis” and fungible tokens via the new Runes token standard introduced on halving blocks.

They “foresaw” transaction fees would eventually break through the 30, 40, 50 BTC barrier, but didn’t expect they’d be the beneficiaries of such a massive reward, let alone on a halving block.

While Bitcoin miners earned a staggering $78.3 million on halving day, they have earned more in fees than Ethereum stakers and Uniswap liquidity providers in nine of the past 20 days, according to Crypto Fees.

ViaBTC notes that Bitcoin’s pseudo-anonymous creator Satoshi Nakamoto predicted that transaction fees would eventually become the primary source of revenue for miners as the block reward is halved.

If these transactions find wider utility and make significant technological advances in the future, they could draw more attention and recognition.

However, the popularity of Ordinals, Runes, and BRC-20 tokens has experienced several ups and downs since the launch of each protocol, which has brought some instability to miner income.

ViaBTC has experienced three halving events since it began operations in 2016, with block 840,000 being the 37,534th block mined on its 2,900th day of existence.

The mining pool's hashrate comes from miners in 118 countries.